Thanks Rich for the article:Position South African mining as...

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Position South African mining as economic change catalyst – Manuel

CAPE TOWN (miningweekly.com) – Mining needed to be positioned as a catalyst to drive other changes in the South African economy, Planning Minister Trevor Manuel said on Monday.

Manuel told a Mining Indaba panel discussion organised by law firm ENS that South Africa needed to look again to the mining sector to be a major part of building capabilities and delivering for the common good.

He said that the plan that the National Planning Commission expected to finalise in May presented a cogent case to raise mining output, increase value addition and commit the State to providing infrastructure.

“The centrality of mining in South Africa is something that we must recognise very, very strongly,” he said.

The South African mining industry’s contribution to the South African economy had shrunk from R103-billion in 1993 to R93-billion in 2009, despite the global commodity boom and the talk of the so-called super cycle.

The challenge before the country was to reverse that trend by planning to boost investment in mining.

In order to achieve that, the government needed to provide policy and regulatory certainty, extract rents from the sector in taxes, invest in infrastructure to support mining, build linkages to increase value-add jobs and support the mining industry to lower carbon emissions.

He conceded that the South Africa government had failed to put in place the requisite water, rail and electricity infrastructure needed for much higher mining output.

With such infrastructure in place, there was no reason why mining output could not double in the decade to support a 7% annual economic growth rate.

Plans to rectify government failure were now well advanced and in some instances under implementation.

The pricing policies for key infrastructure had been suboptimal and prices had not reflected the cost of maintaining infrastructure and expanding it in time.

The proposed development plan dealt with infrastructure needed for platinum and coal and detailed recommendations for the iron-ore and coal lines, port infrastructure and the energy needs had been made.

“We fervently believe that the country is capable of reaching much higher levels of output in mining and we must see each other as partners as we go forward,” Manuel added.

It was critical that South Africa used the mining industry to develop other industries.

A balanced approach was required in the beneficiation of South Africa’s metals and minerals and the realities on the ground.

The country must reposition itself as a global and continental provider of mining services, input and expertise and greater investment, coordination, easier skills migration and more investments in research and development (R&D) was needed.

“We need to re-establish South Africa as a centre of excellence in mining technology,” he said.

That required a new approach involving a partnership between public institutions including educational institutions and mining companies.

While raising its mining output, South Africa needed to become more energy efficient and the economy had to have a lower carbon content, which would come at a cost.

If the country properly sequenced the transition, invested in the necessary R&D and appropriate use of fiscal measures, it could support the move to a lower carbon future while still raising mining output.

The plan to eliminate poverty drew from countries that achieved an economic growth rate of more than 5% a year continuously for 15 years.

The countries used their comparative advantage to build capabilities that reposition them for a better future by unlocking wealth and investing in skills.

In a similar vein:

IDC report highlights jobs potential of SA mining