Modern Mining March 2023

of disaster a day after the Mining Indaba had ended, during his state of the nation address. During the Indaba, he had told the private sector to stop moaning and get on board with helping to address the country’s problems. That is a cheap shot. Any government’s basic respon sibilities are to provide infrastructure, security and justice so the economy can thrive. Asking mining companies to fulfil these functions is an admission of failure cloaked in subtle victimhood. Even more ironic was Minerals and Energy Minister Gwede Mantashe telling mining compa

A ‘green transition’ depends on minerals and metals required for solar panel production.

nies at the Indaba that value must be added to the raw materials before leaving the country. There is no power with which to do so. We can barely keep the smelters on and, even if we could, the freight rail and ports services are so dysfunctional that min ing companies can barely get their goods to market. The combined effect of this government failure is a 9% year-on-year contraction in mining production to November 2022. Declaring a state of disaster is disastrous, as it simply removes obstacles to corruption. While its ostensible purpose is to reduce regulatory red tape associated with independent power procurement, the truth is that this red tape could be removed in an instant if government departments simply worked properly together. Now we have a state of disas ter presided over by the minister of Cooperative Governance and Traditional Affairs; a new Minister of Electricity in the Presidency – a glorified project manager apparently; the ministry of public enter prises; and mineral resources and energy. The minister of the latter is decidedly out to lunch. At the Mining Indaba, he sang the praises of Goldfields for having self-generated its own power to electrify its South Deep expansion. He did not mention that the licensing arrangements took nearly three years to complete. More recently, he blundered to Business Day – in response to his department rejecting a significant mining right appli cation from Sibanye Stillwater to mine a concession they have had prospecting rights to – that “the law is clear if an exploration right expires, the process gets opened up for other companies who wish to mine that particular area to come forward and apply”. Sibanye holds that its prospecting right has not yet expired and intends to appeal the decision. Major problem: going to court costs money and no timing requirements for the appeal process are written into the country’s minerals law. This kind of misguided stubbornness from the minerals minister would be hard to understand except that we’ve seen this movie before. In 2010, Imperial Crown Trading (ICT) applied for a lapsed right on the very same day that Anglo-American applied for it. ICT, part-owned by Khulubuse Zuma

(yes, the nephew of the former thief-in-chief of the country), had submitted a fraudulent application but the Department of Mineral Resources took the case all the way to the Constitutional Court in defence of its decision to grant the right to ICT. The truth is that this kind of situation could be entirely avoided if proper, basic governance structures were in place. A simple online, publicly available cadastre, with all licences properly mapped out, would solve the problem. The dates – from grant to expiry – would be clear for all to see and there fore not subject to dispute. What will likely transpire now, unless the courts intervene as they did in the ICT case, is that some politically connected frauds will gain a right to mine the area that Sibanye has successfully prospected. Mining the resource as soon as possible would bring wealth to the area, including employment prospects for desperate local communities. Declaring a state of disaster only deepens the governance disasters that led to the lights going out, mining rights applications not being properly processed, and ports and rails becoming dysfunc tional. South Africa’s mineral potential, the primary channel through which economic growth could be kickstarted, is being throttled by a government that has shown itself unable to govern in the best inter ests of the citizen. 

The government has declared a state of disaster in relation to electricity supply.

African countries need to gear up to attract responsible investment into extracting minerals and metals.

March 2023  MODERN MINING  37

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