Minerals Council executive says South Africa could create 50,000 more mining jobs

Johannesburg, South Africa (PANA) - A South Africa moderately more attractive to investors would catalyse the creation of 50,000 more mining jobs and an additional 200, 000 jobs overall, Minerals Council South Africa CEO Roger Baxter told the Africa Down Under conference in Perth, Australia, on Thursday.

Speaking a day after Mineral Resources Minister Gwede Mantashe announced a R20-billion, ten-year plan to boost exploration spend in South Africa, Baxter noted that, even in the absence of exploration, South Africa’s mining business had massive latent promise.

“South Africa’s mining potential is huge. Even in the absence of a greenfields exploration boom in South Africa, mining investment could almost double in the next four years if the country was to return to the top 25% of the most attractive mining investment destinations worldwide,” Baxter told the conference, Mining Weekly Online reported here on Friday.

Output, exports and procurement would increase substantially, as would direct and indirect taxes, and royalties paid to the fiscus; and the mining industry would be in a better position to increase its contribution towards infrastructure development and social projects in mining-affected communities.

“Given the industry’s commitment to real transformation, this would also materially advance the entire country’s transformation agenda,” said Baxter, who pointed out that in recent years South Africa had not realised its significant mining potential.

In 2017, South Africa was rated 48th out of 91 mining jurisdictions in the Fraser Institute’s mining investment attractiveness rankings, despite being ranked 20th out of 91 for the country’s mineral potential assuming best policy and regulatory practice.

According to the report, South Africa’s mineral policies were ranked 81 out of 91 jurisdictions, and clearly there is a mismatch between the mineral potential and the policy scorecard. The consequences were evident with real net capital formation in mining declining by over 50% between 2013 and 2017.

South Africa accounted for a poor 1% of total global exploration expenditure in 2017, compared with 14% for Canada and Australia and 13% for the rest of Africa.

Issues undermining the competitiveness of South Africa’s mining and exploration sectors are mainly policy and regulatory uncertainty, costs rising at rates well above inflation, infrastructural constraints, restraints on exploration, a lack of trust between stakeholders and corruption.

Baxter called for a shared future mining vision, ethical leadership and good governance, policy and regulatory certainty and competitiveness, available, efficient, cost competitive and reliable infrastructure, improved productivity and competitiveness, and a greenfields exploration boom.

“Encouragingly we have seen a number of positive developments in the right direction. Since February, the administration under President Cyril Ramaphosa had implemented measures to tackle corruption and promote investment,” he said, describing as positive the appointment of Mantashe and new measures to stabilise State-owned enterprises.

Since his appointment, he said Mantashe had worked hard to overcome the trust deficit between stakeholders by engaging all parties in a frank and open manner.

He praised the minister for withdrawing the problematic Minerals and Petroleum Resources Development Act Amendment Bill and for proposing talks on individual commodities to address their specific challenges.

Positive outcomes of the detailed discussions on the new Mining Charter included recognition of previous empowerment transactions.

“While some issues remain in respect of the new charter, we are hopeful of an outcome that promotes both transformation and investor confidence, which will ultimately ensure the growth and viability of our sector,” said Baxter.

However, he cautioned that there was still much more work to be done to develop a competitive growth strategy for the mining sector and to assist some commodities through the specific economic challenges.

“What is important is that stakeholders are working together and the processes are certainly pointing in the right direction,” he concluded.

With government also considering specific tax incentives on exploration projects, Mantashe has told the conference of his government’s planned dedicated focus on assisting junior exploration and mining companies to gain access to finance.
-0- PANA AR 31Aug2018

31 august 2018 08:42:57

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