Mining is vital to the South African economy and the opportunities that exist in mining can help guide the country’s path to a more inclusive and equitable economy, President Cyril Ramaphosa stated .
Ramaphosa placed mineral and precious metal exports at the top of the list of exports that had contributed to May’s record trade surplus of R54.6-bilion.
“Rising global metal prices will play a significant role in accelerating our recovery from the pandemic downturn. In addition, they open up a host of new opportunities in the mining value chain, boosting the fortunes of the mines themselves and with them the suppliers of capital goods and the options for beneficiation,” Ramaphosa stated.
On the one hand, mining contributed to more than half of South Africa’s goods exports, representing about 10% of gross domestic product and 5% of employment.
“It’s a pillar of our capital goods industry. It’s not a coincidence that when global metals prices peak, our economy and job creation surge.
“Now is the time to facilitate investment along the mining value chain to promote broader job creation, small business development and growth in dynamic new industries,” the President wrote.
He described investment in infrastructure as being a crucial part of government’s contribution to growth in mining, evidenced by the rapid growth in the platinum belt over the past 20 years and the fact that Kumba Iron Ore would not exist without Transnet’s bulk ore lines from the Karoo to the coast. The new mining developments in the Waterberg in Limpopo, he noted, were also dependent on the State for efficient and low-cost transport and energy.
But government also faced a host of other worthy demands for infrastructure support, ranging from basic services for communities hit by the Covid crisis, to upgrading industrial sites for manufacturing and to fixing the national electricity system.
The challenge in these circumstances was to use investment in infrastructure for the mining value chain to improve conditions for producers and communities.
New investments in mining must mobilise resources from outside of the government and contribute to broader economic development.
“Our recent decision to facilitate private generation of electricity up to 100 MW demonstrates the kind of smart measure that we need,” he stated, adding that this crowded in investment from the mines and refineries for renewable generation, while helping to stabilise electricity supply for producers across the economy and providing Eskom with space to improve maintenance on its own plants.
Similarly, mining projects could help to pay for bulk water developments, which also served communities; cross-border transport corridors and bandwidth access in rural areas.
“We need to design these projects so that they support new economic activities in agriculture, manufacturing and services and empower smaller businesses. In short, these projects must leverage our mineral riches to support broad-based industrialisation.
“Mining is vital to our economy and will continue to be for the foreseeable future. Let us grasp the opportunities that exist in this sector so that mining can help guide our path to a more inclusive and equitable economy,” the President stated.