The Minerals Council South Africa has urgently called for comprehensive structural reforms in the energy and logistics sectors, following President Cyril Ramaphosa’s State of the Nation Address (SoNA) on February 8, 2024. This call to action underscores the critical need for a stable, efficient, and consistent regulatory framework to ensure the South African mining industry’s sustainability and its significant contribution to the economy and society.
Mzila Mthenjane, CEO of the Minerals Council, highlighted the necessity of reforms to facilitate private sector involvement in energy generation, transmission, as well as rail and port operations. These reforms are deemed essential to overcoming the operational challenges that have severely limited the mining sector’s growth, aiming for an economic growth target exceeding 5%. The Council’s stance reflects a broader industry perspective that the mining sector’s potential can only be fully realized through a conducive and enabling operating environment marked by regulatory certainty and infrastructural efficiency.
In addition to advocating for structural reforms, the Minerals Council has also expressed support for the government’s commitment to establishing a green hydrogen economy. This initiative is particularly relevant for South Africa, given its abundant platinum group metals (PGMs), which are crucial for hydrogen production and fuel cells. The move towards green hydrogen not only promises to create a new source of demand for these metals but also aligns with global efforts to reduce carbon emissions and transition to renewable energy sources.
The mining industry has shown resilience and adaptability in the face of fluctuating commodity prices and operational challenges, with the sector managing to create jobs and contribute significantly to the national fiscus in 2023. Mthenjane pointed out the industry’s role in supporting families and communities through wage increases and its substantial fiscal contributions, emphasizing the importance of a more supportive operational and regulatory environment to enhance the sector’s impact.
In the face of these challenges, the government’s launch of a R400-million fund for exploration is a welcome development to address the underinvestment in mineral prospecting. The Minerals Council stresses the importance of implementing an efficient, transparent, and modern cadastral system for managing prospecting and mineral rights applications, marking a critical step towards revitalizing South Africa’s exploration sector.
Water scarcity and reticulation issues, particularly in Limpopo, Mpumalanga, and the Northern Cape, pose additional challenges for the mining industry and the wider community. The council calls for a clear government roadmap and a pragmatic strategy to involve the private sector in addressing these water crises urgently.
Furthermore, the Minerals Council appreciates the progress in logistics, energy, and efforts to combat crime and corruption, as highlighted by President Ramaphosa. The collaboration between business and government, particularly through the National Energy Crisis Committee (Necom), the National Logistics Crisis Committee, and the Joint Initiative on Crime and Corruption, is showing promising signs. These initiatives, including the significant reduction in infrastructure security incidents and the involvement of private sector companies in the energy sector, are critical steps towards stabilizing and improving the operational landscape for the mining industry.
As South Africa gears up for an election year, the Minerals Council’s call for critical reforms underscores the urgency of addressing the structural challenges facing the economy. The mining sector’s readiness to collaborate with the government and other stakeholders reflects a shared commitment to securing a more prosperous and sustainable future for South Africa. The council’s advocacy for regulatory certainty, infrastructural improvements, and a greener economy highlights the sector’s pivotal role in driving economic growth, job creation, and environmental stewardship.
