Date: 24/11/2005
Source: Ministry of Minerals and Energy
Title: Hendricks: Launch of Who’s Who in Mining supplement of SA Mining magazine
Address by Minister of Minerals and Energy, Mrs Lindiwe Hendricks at the launch of the Who’s Who in Mining supplement of SA Mining magazine
Programme Director
Distinguished guests
Ladies and gentlemen
Our country is well endowed with mineral resources. We have a long history of mining and a strong mining future. According to our records, South Africa holds 80% of the world manganese base reserves, 55% of platinum; 70% of chromium; 45% of gold; 40% of vermiculite; 35% of alumino-silicates; 30% of titanium minerals; 20% of vanadium, etc.
Since taking over the portfolio of Minister of Minerals and Energy a few months ago I have been exposed to the importance mining holds for the future economic growth of our country. The challenge for us is to ensure we do not loose out on the opportunities we have available to us, to fully benefit from the contribution this sector is able to make.
We are all aware how historically South Africa’s minerals and mining industry has contributed to the development of the South African national economy. Even today it contributes between 6% and 7% to Gross Domestic Product (GDP) and employs about 434 000 people but more importantly, we need to recognise the relationship between the mining industry and the rest of the economy, in order to fully capitalise on this sector. In doing so the mining industry should form an integral part of our strategy of moving to the 6% rate of growth to bring about greater equality and bring down high levels of unemployment.
Programme director, I spoke about the dangers of ignoring the relationships and linkages between mining and the rest of the economy, when I addressed Parliament a few weeks ago on the Diamonds Amendment Bill. In that address I said, “The problem of being over-reliant on resource mining is typified by what we see in Kimberley today. Kimberley is internationally recognised for its contribution to diamond production, yet we see how the community suffers when the once lucrative mines are decommissioned because of low quantities of diamonds and inaccessible deposits. No meaningful development took place in Kimberley, when by all accounts it had the potential to become one of the wealthiest cities in the world. “
How then can mining contribute to further develop the economy?
Downstream beneficiation
The first and most important area where we have identified growth opportunities in the mining industry is in beneficiating the minerals we have mined out of the earth. Our recent Diamond and Precious Metals Bills were developed to facilitate and encourage these developments. We also have Mintek which has developed world class technologies for the beneficiation of minerals.
The challenge for us is to ensure that the raw materials we mine and export in an unrefined state or with little value addition, is made available to the domestic downstream industry. The upstream part of the mining industry has a crucial role to play in making these raw materials available. In my recent address at the Kumba black economic empowerment (BEE) announcement, I challenged the restructured Kumba with its focus on iron ore, to contribute to our broader vision of beneficiation of raw materials by making product available so we are able to establish a new steel smelter in South Africa. The same challenge goes out to other industries and in particular we would like to further extend our beneficiation of platinum group metals.
We are aware of a level of scepticism amongst the mining industry who feels government is to force “miners” to beneficiate. Let me assure you this is not the case. Our view is that we have to get greater levels of benefit from our primary resources in order to grow the manufacturing and service industries of our economy and alleviate the problems of unemployment in our country. There is no doubt in my mind that we have the research and development capabilities, the manufacturing know-how, the financial resources and the entrepreneurial ability to effectively beneficiate our minerals.
Growth of mining related industries
The second area where opportunities exist for our mining sector to contribute towards our broader economic growth is through the industries associated with Mining. We have a strong service industry surrounding this sector, even the publication that is being launched today is part of that service industry.
Ladies and gentlemen, all modern economies are increasingly moving towards service industries and knowledge sectors. We must capture the knowledge of over 100 years of mining and support to the mining industry, package these services and knowledge and find ways to sell these products. I believe mining houses have a critical role to play in driving this move to knowledge services, particularly as they invest in other countries.
I was recently informed of a good example of this taking place in Kazakhstan with an operation involving a South African contract miner and a South African investment house. With global and African markets in particular, opening up to us, we cannot afford to be too inwardly focused. Other opportunities for the mining industry to contribute to growing related industries is through procurement, especially by Historically Disadvantaged South African (HDSA) firms. I have previously stated how important procurement is in growing the participation of black people in the value addition activities and service components of the mining industry.
Entry of new players into the Mining Industry
The third area for the mining industry to contribute towards broader economic growth is through the entry of new players into the mining industry. Through the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter we have started to see greater numbers of black people and women being given access to this sector. The conversions and the BEE deals are starting to bring some normality to the skewed situation we found ourselves in; however, there is a long way to go and a great deal of effort is required in ensuring the deals are more broad-based.
The relationship between the managed broad–based black economic empowerment (BBBEE) we have been promoting in South Africa and sustained economic growth has proven to be very positive. And we look forward to the increasing participation of black people in the economy resulting in even further economic growth.
Programme director, another area where we are facilitating access to new players into the mining industry is through small scale mining. Our goal here is to bring about commercially viable and environmentally sustainable small-scale mining projects, which will also contribute towards rural development. We have recognised the need to support this sector and in this regard we have established the Small-Scale Mining Board, which amongst other things will be looking at alleviating the technical and financial constraints faced by small scale miners, as well as improving skills levels.
To conclude, ladies and gentlemen, I am excited about the possibilities for the mining sector and see a number of different ways for increased integration of this sector with other facets of our economy in order to stimulate and contribute towards economic growth.
Such contributions however require a shift in thinking and a need for existing players to reformulate their approach to and location in South Africa’s increasingly open economy. Traditional ways of doing things need to be re-evaluated for their continued relevance in today’s world.
Finally, let me also take this opportunity to congratulate the editorial team on your magazine and its contribution to educating and informing the international community about the developments in the South African mining industry. This obviously goes a long way in promoting the industry and attracting investors to our soil. Whilst informative and educational the publication should look critically at the role mining can play in assisting government overcome the many challenges it is faced with. I would thus urge you to continue flying the South African flag.
I thank you.
Issued by: Ministry of Minerals and Energy
24 November 2005
Source: Ministry of Minerals and Energy
Title: Hendricks: Launch of Who’s Who in Mining supplement of SA Mining magazine
Address by Minister of Minerals and Energy, Mrs Lindiwe Hendricks at the launch of the Who’s Who in Mining supplement of SA Mining magazine
Programme Director
Distinguished guests
Ladies and gentlemen
Our country is well endowed with mineral resources. We have a long history of mining and a strong mining future. According to our records, South Africa holds 80% of the world manganese base reserves, 55% of platinum; 70% of chromium; 45% of gold; 40% of vermiculite; 35% of alumino-silicates; 30% of titanium minerals; 20% of vanadium, etc.
Since taking over the portfolio of Minister of Minerals and Energy a few months ago I have been exposed to the importance mining holds for the future economic growth of our country. The challenge for us is to ensure we do not loose out on the opportunities we have available to us, to fully benefit from the contribution this sector is able to make.
We are all aware how historically South Africa’s minerals and mining industry has contributed to the development of the South African national economy. Even today it contributes between 6% and 7% to Gross Domestic Product (GDP) and employs about 434 000 people but more importantly, we need to recognise the relationship between the mining industry and the rest of the economy, in order to fully capitalise on this sector. In doing so the mining industry should form an integral part of our strategy of moving to the 6% rate of growth to bring about greater equality and bring down high levels of unemployment.
Programme director, I spoke about the dangers of ignoring the relationships and linkages between mining and the rest of the economy, when I addressed Parliament a few weeks ago on the Diamonds Amendment Bill. In that address I said, “The problem of being over-reliant on resource mining is typified by what we see in Kimberley today. Kimberley is internationally recognised for its contribution to diamond production, yet we see how the community suffers when the once lucrative mines are decommissioned because of low quantities of diamonds and inaccessible deposits. No meaningful development took place in Kimberley, when by all accounts it had the potential to become one of the wealthiest cities in the world. “
How then can mining contribute to further develop the economy?
Downstream beneficiation
The first and most important area where we have identified growth opportunities in the mining industry is in beneficiating the minerals we have mined out of the earth. Our recent Diamond and Precious Metals Bills were developed to facilitate and encourage these developments. We also have Mintek which has developed world class technologies for the beneficiation of minerals.
The challenge for us is to ensure that the raw materials we mine and export in an unrefined state or with little value addition, is made available to the domestic downstream industry. The upstream part of the mining industry has a crucial role to play in making these raw materials available. In my recent address at the Kumba black economic empowerment (BEE) announcement, I challenged the restructured Kumba with its focus on iron ore, to contribute to our broader vision of beneficiation of raw materials by making product available so we are able to establish a new steel smelter in South Africa. The same challenge goes out to other industries and in particular we would like to further extend our beneficiation of platinum group metals.
We are aware of a level of scepticism amongst the mining industry who feels government is to force “miners” to beneficiate. Let me assure you this is not the case. Our view is that we have to get greater levels of benefit from our primary resources in order to grow the manufacturing and service industries of our economy and alleviate the problems of unemployment in our country. There is no doubt in my mind that we have the research and development capabilities, the manufacturing know-how, the financial resources and the entrepreneurial ability to effectively beneficiate our minerals.
Growth of mining related industries
The second area where opportunities exist for our mining sector to contribute towards our broader economic growth is through the industries associated with Mining. We have a strong service industry surrounding this sector, even the publication that is being launched today is part of that service industry.
Ladies and gentlemen, all modern economies are increasingly moving towards service industries and knowledge sectors. We must capture the knowledge of over 100 years of mining and support to the mining industry, package these services and knowledge and find ways to sell these products. I believe mining houses have a critical role to play in driving this move to knowledge services, particularly as they invest in other countries.
I was recently informed of a good example of this taking place in Kazakhstan with an operation involving a South African contract miner and a South African investment house. With global and African markets in particular, opening up to us, we cannot afford to be too inwardly focused. Other opportunities for the mining industry to contribute to growing related industries is through procurement, especially by Historically Disadvantaged South African (HDSA) firms. I have previously stated how important procurement is in growing the participation of black people in the value addition activities and service components of the mining industry.
Entry of new players into the Mining Industry
The third area for the mining industry to contribute towards broader economic growth is through the entry of new players into the mining industry. Through the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter we have started to see greater numbers of black people and women being given access to this sector. The conversions and the BEE deals are starting to bring some normality to the skewed situation we found ourselves in; however, there is a long way to go and a great deal of effort is required in ensuring the deals are more broad-based.
The relationship between the managed broad–based black economic empowerment (BBBEE) we have been promoting in South Africa and sustained economic growth has proven to be very positive. And we look forward to the increasing participation of black people in the economy resulting in even further economic growth.
Programme director, another area where we are facilitating access to new players into the mining industry is through small scale mining. Our goal here is to bring about commercially viable and environmentally sustainable small-scale mining projects, which will also contribute towards rural development. We have recognised the need to support this sector and in this regard we have established the Small-Scale Mining Board, which amongst other things will be looking at alleviating the technical and financial constraints faced by small scale miners, as well as improving skills levels.
To conclude, ladies and gentlemen, I am excited about the possibilities for the mining sector and see a number of different ways for increased integration of this sector with other facets of our economy in order to stimulate and contribute towards economic growth.
Such contributions however require a shift in thinking and a need for existing players to reformulate their approach to and location in South Africa’s increasingly open economy. Traditional ways of doing things need to be re-evaluated for their continued relevance in today’s world.
Finally, let me also take this opportunity to congratulate the editorial team on your magazine and its contribution to educating and informing the international community about the developments in the South African mining industry. This obviously goes a long way in promoting the industry and attracting investors to our soil. Whilst informative and educational the publication should look critically at the role mining can play in assisting government overcome the many challenges it is faced with. I would thus urge you to continue flying the South African flag.
I thank you.
Issued by: Ministry of Minerals and Energy
24 November 2005
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