Date: 08/07/2004
Source: Northern Cape Provincial Government
Title: P Dikgetsi: Mining Expo & Seminar Gala Dinner
KEYNOTE ADDRESS BY MEC FOR FINANCE AND ECONOMIC AFFAIRS, PAKES DIKGETSI, AT A GALA DINNER FUNCTION HELD AT THE NORTHERN CAPE PROVINCIAL LEGISLATURE, 8 July 2004
Minister of Minerals and Energy Phumzile Mlambo-Ngcuka
Mayors of District Municipalities
Chairperson of the South African Mining
Procurement and the Northern Cape Mine Managers Association
Directors-General
Heads of Departments
Members of the Business Community
Ladies and Gentlemen,
I would like to begin by congratulating the organisers of today's Mining Expo and Seminar on Opportunities and challenges in the mining industry. The event has allowed business players; especially those who were previously not afforded the opportunity, to realign and position themselves within the mining sector.
I would also like to thank the Minister and the Department of Minerals and Energy for pioneering an initiative aimed at enhancing economic growth and development, poverty alleviation and broad-based beneficiation by accelerating the implementation of the Mining Charter and Procurement.
Of course, the Mineral and Petroleum Resources Development Act and the associated Minerals Charter spell out objectives and even targets for black ownership in procurement. The Mining Royalties Bill also gives consideration to the fiscal regime that will apply to the industry in the future.
However, for me, it is critically important that Black Economic Empowerment in the Northern Cape minerals industry is not just about a group of Black South Africans securing portfolio investments in existing mining companies in the province and then sitting back waiting for dividends!
If there were to be one valid criticism of BEE in the mining industry to date, it is the extent to which a number of BEE groups have done just that. We have to be realistic and say that mistakes have been made and that to some extent, enrichment has sometimes been mistaken for empowerment. Expedient? Perhaps. But also bear in mind that some of our early post-1994 BEE deals in the mining sector were not guided by clear policy and that such mistakes were perhaps somewhat inevitable.
Nevertheless, with the benefit of policy debates that have raged South Africa, I have to believe that there is a qualitatively better way to go about BEE in the minerals industry and that there is a considerable scope to be innovative about the way which young black South African mining companies, particularly those based in this province can add significant value to BEE transactions.
Furthermore, we as government have for some time been acutely concerned with the vexed question of how to widen access to the mineral wealth of our province while at the same time encouraging ongoing investment in the development of the industry.
Since the ANC-led government was installed in 1994, we have been particularly keen to find a way in which to mainstream the previously disadvantages part of our population - while at the same maintaining the viability of the industry and its contribution to our national economy.
The provincial economy of the Northern Cape is still dominated by the mining industry. World-class deposits of various minerals provide the basis for a large and growing industry. The iron-ore, manganese and the diamond sub-sectors of the local mining industry dominate and producers operating in the province are world players in their own right.
Not only does De Beers remain headquartered in the Northern Cape, but also Kumba Resources, SAMANCOR, AVMIN and other mining houses are partners in the exploitation of the mineral wealth and development in the province. As a result, at a local level in many localities across our province, a significant number of people in the Northern Cape depend for their employment and livelihood on the continuation of mining activities in the province.
Over the period between 1996 and 2002, the province has had the sharpest decline of all the provinces in the country and this is a reflection of the fact that its main export, diamonds, is very dependent on the international business cycle.
The region is even after this sharp decline in the dollar value of exports still the most dependent on exports, which now represents 51 percent of gross value added.
Unlike Mpumalanga that sells a large part of its mining production inside the country, the Northern Cape sells almost all of its mining output on international markets. The largest part of the export sales is in the form of diamonds, between 90 and 95 percent, with the remainder mostly agricultural products.
At the moment, the mining sector accounts for roughly 17 percent of the provincial economy. Also, in the last ten years, mining procurement has grown so tremendously that the cost of services provided by black people to mines has grown to R400-million. Compared to 10 years ago, the mining industry's procurement is today worth about R3-billion whereas in 1994 was ZERO. It is R3-billion industry with enormous potential for the stimulation of empowerment.
It is however critical that in moving towards the objectives and targets of the Mining Charter, we do not loose an opportunity to ensure the empowerment of the inhabitants of the Northern Cape. It is they that have partnered capital, through the contribution of their (cheap) labour to develop our mining industry.
While I would concede that the physical and economic conditions of mineworkers have improved over the recent years, we have only just begun to scratch the surface when it comes to the participation of PDIs in the business of the industry. Not only must we move faster in this area - assisted by the supporting provisions of the Mining Charter and the will of the captains of the mining industry - but we must make sure that we empower the sons and daughters of the Northern Cape whose families have contributed so much to the development of this key industry.
The Ministry and Department of Finance and Economic Affairs, will continue to work closely with industry role-players to enhance the attractiveness of the province as a place where investors can determine the prospects for new investment in mineral exploration, mining and minerals processing. But, equally, if not more importantly we are working with them to see that the provisions of the Charter related to black economic empowerment are implemented expeditiously.
I would therefore like to recognise and thank the Mine Managers of province's mining houses and their Procurement Managers who told the bold step in endorsing the mining charter and developing programmes to broad-based beneficiation for wealth, job creation and poverty alleviation - in addition to their social responsibility investment prospects such as education, HIV/AIDS, learnerships, public and private partnerships.
Programme Director, I would like to thank the exhibitors and service providers who took the bold step to transform as true Africans and not because there is a policy regulation in the mining industry.
Our sincere thanks to the Department of Minerals and Energy and all the Northern Cape Provincial Government Departments who have facilitated the implementation, knowledge sharing and enabling people to become economically emancipated.
Our thanks also go to the South African Mining Preferential Procurement Forum for engaging national mining companies to empower people at local level.
I would also like to thank and congratulate provincial prize-winners for their dedication and passion to enhance the transformation process within the mining industry in this province.
Honourable guests, since April last year, we have had several consultation sessions that encouraged black people to enter the mining sector in all facets and as a result:
* Seven women groups have been established - at the moment, one exports precious gem stones to the East while is one recycling diamond tailing heaps with profitable prospects and others are in the procurement of various goods and services
* Several black economic empowerment companies have received mineral right permits whilst others are engaging in the value adding chain.
Our biggest obstacle is access to finance and therefore my call to all financial institutions and developing agencies that are (present here tonight) to do their utmost to strengthen the capacity and resource base.
My biggest fear is that whilst we endeavour to reduce poverty and increase employment, the real opportunities will pass our people who stand to benefit from the aims and objectives of the BEE legislation.
Existing businesses that have long standing contracts and relationships with the mines must be continuously encouraged to develop credible and sustainable opportunities for emerging SMMEs.
Government has put aside an Innovation Fund amounting close to R25-million over 3 years to assist potential successful businesses. Our criteria is however not as stringent as those of banks, but we need business acumen to ensure success.
Mines have in the past shared their project management skills and I hope they will continue to do so.
If we successfully sign-off, with corporate and merchant banks, our envisaged Memorandums of Understanding to make money readily available for procurement initiatives, then a better support structure will emerge.
The outcome of the seminar this afternoon has been noted and the minister has responded very clearly.
The Northern Cape government is however proud that it was a founding member of these initiatives and has also started to develop its own system, internally, which we hope to roll out to municipalities.
The waste management initiative is a second major project and I am looking forward to our municipalities to seriously engage in it.
Once more to the prize-winners, I wish to say, continue to champion in these fields and develop more successes for our province.
We must increase local spending especially among black entrepreneurs with most benefits to the communities where mines are located.
I commit on behalf of the Premier of this province, our government and municipalities to successfully enhance the Northern Cape Mining Procurement Initiative as a public partner to the well being of our people.
In conclusion, a special thank you all who were driving these initiatives and those who attended the sessions and dinner as our special guests.
I am looking forward to a lasting relationship with all of you.
Enjoy the evening and our province.
I thank you.
Ke a leboga.
Ndi ya bulela.
Dankie
Issued by: Department of Finance & Economic Affairs, Northern Cape Provincial Government
8 July 2004
Source: Northern Cape Provincial Government (http://www.northern-cape.gov.za)
Source: Northern Cape Provincial Government
Title: P Dikgetsi: Mining Expo & Seminar Gala Dinner
KEYNOTE ADDRESS BY MEC FOR FINANCE AND ECONOMIC AFFAIRS, PAKES DIKGETSI, AT A GALA DINNER FUNCTION HELD AT THE NORTHERN CAPE PROVINCIAL LEGISLATURE, 8 July 2004
Minister of Minerals and Energy Phumzile Mlambo-Ngcuka
Mayors of District Municipalities
Chairperson of the South African Mining
Procurement and the Northern Cape Mine Managers Association
Directors-General
Heads of Departments
Members of the Business Community
Ladies and Gentlemen,
I would like to begin by congratulating the organisers of today's Mining Expo and Seminar on Opportunities and challenges in the mining industry. The event has allowed business players; especially those who were previously not afforded the opportunity, to realign and position themselves within the mining sector.
I would also like to thank the Minister and the Department of Minerals and Energy for pioneering an initiative aimed at enhancing economic growth and development, poverty alleviation and broad-based beneficiation by accelerating the implementation of the Mining Charter and Procurement.
Of course, the Mineral and Petroleum Resources Development Act and the associated Minerals Charter spell out objectives and even targets for black ownership in procurement. The Mining Royalties Bill also gives consideration to the fiscal regime that will apply to the industry in the future.
However, for me, it is critically important that Black Economic Empowerment in the Northern Cape minerals industry is not just about a group of Black South Africans securing portfolio investments in existing mining companies in the province and then sitting back waiting for dividends!
If there were to be one valid criticism of BEE in the mining industry to date, it is the extent to which a number of BEE groups have done just that. We have to be realistic and say that mistakes have been made and that to some extent, enrichment has sometimes been mistaken for empowerment. Expedient? Perhaps. But also bear in mind that some of our early post-1994 BEE deals in the mining sector were not guided by clear policy and that such mistakes were perhaps somewhat inevitable.
Nevertheless, with the benefit of policy debates that have raged South Africa, I have to believe that there is a qualitatively better way to go about BEE in the minerals industry and that there is a considerable scope to be innovative about the way which young black South African mining companies, particularly those based in this province can add significant value to BEE transactions.
Furthermore, we as government have for some time been acutely concerned with the vexed question of how to widen access to the mineral wealth of our province while at the same time encouraging ongoing investment in the development of the industry.
Since the ANC-led government was installed in 1994, we have been particularly keen to find a way in which to mainstream the previously disadvantages part of our population - while at the same maintaining the viability of the industry and its contribution to our national economy.
The provincial economy of the Northern Cape is still dominated by the mining industry. World-class deposits of various minerals provide the basis for a large and growing industry. The iron-ore, manganese and the diamond sub-sectors of the local mining industry dominate and producers operating in the province are world players in their own right.
Not only does De Beers remain headquartered in the Northern Cape, but also Kumba Resources, SAMANCOR, AVMIN and other mining houses are partners in the exploitation of the mineral wealth and development in the province. As a result, at a local level in many localities across our province, a significant number of people in the Northern Cape depend for their employment and livelihood on the continuation of mining activities in the province.
Over the period between 1996 and 2002, the province has had the sharpest decline of all the provinces in the country and this is a reflection of the fact that its main export, diamonds, is very dependent on the international business cycle.
The region is even after this sharp decline in the dollar value of exports still the most dependent on exports, which now represents 51 percent of gross value added.
Unlike Mpumalanga that sells a large part of its mining production inside the country, the Northern Cape sells almost all of its mining output on international markets. The largest part of the export sales is in the form of diamonds, between 90 and 95 percent, with the remainder mostly agricultural products.
At the moment, the mining sector accounts for roughly 17 percent of the provincial economy. Also, in the last ten years, mining procurement has grown so tremendously that the cost of services provided by black people to mines has grown to R400-million. Compared to 10 years ago, the mining industry's procurement is today worth about R3-billion whereas in 1994 was ZERO. It is R3-billion industry with enormous potential for the stimulation of empowerment.
It is however critical that in moving towards the objectives and targets of the Mining Charter, we do not loose an opportunity to ensure the empowerment of the inhabitants of the Northern Cape. It is they that have partnered capital, through the contribution of their (cheap) labour to develop our mining industry.
While I would concede that the physical and economic conditions of mineworkers have improved over the recent years, we have only just begun to scratch the surface when it comes to the participation of PDIs in the business of the industry. Not only must we move faster in this area - assisted by the supporting provisions of the Mining Charter and the will of the captains of the mining industry - but we must make sure that we empower the sons and daughters of the Northern Cape whose families have contributed so much to the development of this key industry.
The Ministry and Department of Finance and Economic Affairs, will continue to work closely with industry role-players to enhance the attractiveness of the province as a place where investors can determine the prospects for new investment in mineral exploration, mining and minerals processing. But, equally, if not more importantly we are working with them to see that the provisions of the Charter related to black economic empowerment are implemented expeditiously.
I would therefore like to recognise and thank the Mine Managers of province's mining houses and their Procurement Managers who told the bold step in endorsing the mining charter and developing programmes to broad-based beneficiation for wealth, job creation and poverty alleviation - in addition to their social responsibility investment prospects such as education, HIV/AIDS, learnerships, public and private partnerships.
Programme Director, I would like to thank the exhibitors and service providers who took the bold step to transform as true Africans and not because there is a policy regulation in the mining industry.
Our sincere thanks to the Department of Minerals and Energy and all the Northern Cape Provincial Government Departments who have facilitated the implementation, knowledge sharing and enabling people to become economically emancipated.
Our thanks also go to the South African Mining Preferential Procurement Forum for engaging national mining companies to empower people at local level.
I would also like to thank and congratulate provincial prize-winners for their dedication and passion to enhance the transformation process within the mining industry in this province.
Honourable guests, since April last year, we have had several consultation sessions that encouraged black people to enter the mining sector in all facets and as a result:
* Seven women groups have been established - at the moment, one exports precious gem stones to the East while is one recycling diamond tailing heaps with profitable prospects and others are in the procurement of various goods and services
* Several black economic empowerment companies have received mineral right permits whilst others are engaging in the value adding chain.
Our biggest obstacle is access to finance and therefore my call to all financial institutions and developing agencies that are (present here tonight) to do their utmost to strengthen the capacity and resource base.
My biggest fear is that whilst we endeavour to reduce poverty and increase employment, the real opportunities will pass our people who stand to benefit from the aims and objectives of the BEE legislation.
Existing businesses that have long standing contracts and relationships with the mines must be continuously encouraged to develop credible and sustainable opportunities for emerging SMMEs.
Government has put aside an Innovation Fund amounting close to R25-million over 3 years to assist potential successful businesses. Our criteria is however not as stringent as those of banks, but we need business acumen to ensure success.
Mines have in the past shared their project management skills and I hope they will continue to do so.
If we successfully sign-off, with corporate and merchant banks, our envisaged Memorandums of Understanding to make money readily available for procurement initiatives, then a better support structure will emerge.
The outcome of the seminar this afternoon has been noted and the minister has responded very clearly.
The Northern Cape government is however proud that it was a founding member of these initiatives and has also started to develop its own system, internally, which we hope to roll out to municipalities.
The waste management initiative is a second major project and I am looking forward to our municipalities to seriously engage in it.
Once more to the prize-winners, I wish to say, continue to champion in these fields and develop more successes for our province.
We must increase local spending especially among black entrepreneurs with most benefits to the communities where mines are located.
I commit on behalf of the Premier of this province, our government and municipalities to successfully enhance the Northern Cape Mining Procurement Initiative as a public partner to the well being of our people.
In conclusion, a special thank you all who were driving these initiatives and those who attended the sessions and dinner as our special guests.
I am looking forward to a lasting relationship with all of you.
Enjoy the evening and our province.
I thank you.
Ke a leboga.
Ndi ya bulela.
Dankie
Issued by: Department of Finance & Economic Affairs, Northern Cape Provincial Government
8 July 2004
Source: Northern Cape Provincial Government (http://www.northern-cape.gov.za)
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