Date: 01/03/2007
Source: The Presidency
Title: Mlambo-Ngcuka: Opening of Lion Ferrochrome Smelter
Address delivered by the Deputy President, Ms Phumzile Mlambo-Ngcuka, at the opening of Lion Ferrochrome Smelter, Steelpoort, Limpopo
Premiers Moloto, Makwetla,
Kgosi Sekhukhune,
Queen Mother Molotlegi
Director-Generals,
Executive Mayors,
Councillors,
Business Leaders,
Traditional Leaders,
Ladies and Gentlemen,
It is a pleasure for me to be here on this significant day. It is great a moment when we can gather for a memorable occasion for South Africa and for Limpopo, one of our neediest province when we officially open the Lion Ferrochrome Smelter project. We pay special recognition to Xstrata Alloys and Merafe Resources for putting together such an essential development project. We are glad that a significant industrial project also responds to our legislation, the Mineral and Petroleum Resources Development Act (MPRDA), which called for such partnerships as far back as 2002.
Where we called for black participation not only in ownership, but also in management control of the joint operations in all aspects of the mining business. We further introduce the social and labour plan for the benefit of the workers and communities, which is a significant contribution towards a shared bright future and for practising good corporate governance. All these objectives are meant to enhance the relationship between the mining industry and the mining communities and for the benefit of South Africa, also shareholders all of whom benefit when their company has positive relationships in its location.
The Lion Ferrochrome comes at a time when we have declining investments in the mining sector of South Africa against the backdrop of a commodity price boom. This project adds to manufacturing jobs and diversification from mining to beneficiation, which is indeed a highlight for us and what we have been advocating for. It is a contribution to both mining and manufacturing. We have also seen a marked growth in mining in the last quarter of 2006 of 4,6%. We note with interest the increase in the level of processed minerals year on year which this operation will add on and this is in line with our industrial strategy and the Accelerated and Shared Growth Initiative for South Africa (AsgiSA); this we welcome. Mineral processing is an area of high priority for the Department of Minerals and Energy (DME) and governments.
Our key objectives as government is to further stimulate economic growth, alleviate poverty and enhance job creation avenues. We seek programmes that are geared towards reducing poverty and halving poverty and unemployment by 2014. That is indeed attainable if there are more practical economic initiatives like those of Xstrata Alloys and Merafe Resources. The two came together in 2004 as pooling and sharing venture (PSV). Both companies came together with significant operating assets and with a growth potential that is boundless. We praise your joint vision that has also provided significant building blocks for increasing our human resources and skills development spheres. Xstrata and Merafe are young companies possibly with one of the very impressive growth history. It feels like yesterday when Mr Davies came to brief us about the birth of Xstrata.
The Lion Ferrochrome project is opportune for several reasons. From a purely business point of view, it is set to enhance overall cost competitiveness of the chrome produced in South Africa for the local and international markets. It will and must yield benefits not only for the province of Limpopo, South Africa and the Southern African Development Community (SADC) region.
This Lion Ferrochrome enterprise will go a long distance in providing a major injection into the first and second economy. For proof, one has only to look at the background that went into making Xstrata Merafe joint venture efforts were to make it a win-win venture. It is true that success of our first economy also has to be measured through changes in the new Black Economic Empowerment (BEE) campaign as the persisting second economy is in part a consequence of an un-transforming first economy.
We also see a relationship between such key projects and the success of our industrial strategy, especially in minerals such as chrome, where South Africa is so dominant and is endowed with large reserves for the future. In such cases we have a chance to make long-term projections for growth and a growth-path that responds to broad economic objectives, unlike in cases where we are running out of reserves or we are a small player.
South Africa has the largest known reserve base of chrome ore at 72,4%. And we are also number one producer of the world's ferroalloy at 40,5% of the world's production. This means as a world leader in this commodity we can also lead the world in diversifying our benefits. In the new policy context the future of mining in South Africa is measured also by its long-term impact in the quality of life of affected communities in the same way as value to shareholders. In countries like Canada and Australia it has been shown that whole communities can benefit from vertical and horizontal economic activity induced by mining only if government and private sector work together. We in South Africa are also determined that mining in South Africa does not leave us with the same legacy left by mining in Welkom, Newcastle and in the dense-labour-sending-areas such as the old Transkei, where thousands of ex-mineworkers who were migrant labourers are trapped in grinding poverty. After almost a century of supplying mines with highly exploited labour and sweat. In the new dispensation we want to build a predictable better life for all affected and to change the destiny of affected communities and workers who must not exit the industry as sick, old, poor and broken souls.
Our country with all its robust growth now at 5,5% of the Gross Domestic Product (GDP), has 12 million people who live on government grants. In addition we have 7 million young people between ages of 20 to 35 who have never had a job and have no likelihood of ever getting formal employment; they mostly have less than 12 years of schooling, are destined to poverty. However, they are trainable able-bodied and they hold a key to the future of this country, its stability and productivity. It is to them that our shared growth path depends because it is them we must share growth with. It is in these second economy citizens that need to benefit from our industrial strategy soonest while we also invest in absorbing the skilled minority and increase the number of skills and expertise. The lower than desirable volumes of manufactured and exportable goods has also been identified as a setback for faster and shared growth with job creation.
I am aware that some of your competitors here in South Africa are exporting ore and not beneficiating in the country. This is a matter on which we have asked DME to act on in accordance with our policy without delay. In this regard the Minister of Minerals and Energy will, sometime this year, gazette the beneficiation base levels which everybody will have to comply with and as we all know for chrome it is ferrochrome. Those who are not complying I would urge them to work with us to prepare themselves to comply. Moreover, doing so will augur well for our well-earned status as a world-class mining country.
It is encouraging to learn that this endeavour of Lion Ferrochrome has resulted in employment of 2 700 people during the construction phase while securing 'employment opportunities' for well over 450 people. As Xstrata Merafe brief confirms: "This and other benefits confirms the value of beneficiation to the economic growth of South Africa, as well as the sustainability of communities in which mining takes place." I am also told that the Lion Ferrochrome projects stands to boost skill expertise through its state-of-the-art centre that offers various skills and qualifications in line with the National Qualifications Framework. This is also significant as skills are a binding constraint for growth in South Africa; hence we have the Joint Initiative for Priority Skills Acquisition (JIPSA) and thanks to Xstrata also for supporting JIPSA initiative by investing in our students and trainees.
In the development of human capital we can ensure our resources, human and material, are used for sustainable economic and social development. We need all of you to help to look at how we can create exit paths; long and short staircases to move people out of the second economy. The proposed employment subsidy for first entrants into the labour market as announced by the State President in his State of the Nation Address provides one such facilitated entry into the world of work hopefully for millions who at 35+ have never had a job. We need the private sector in this regard to work with us in this ambitious plan.
Together we must end dualism in the economy. The key features of second economy include low skills, inability to contribute to GDP, burden of diseases, unaffected by the prosperous growing economy, no possibility to escape, plus the possibility that poverty will be passed on to the next generation. This is the reality we have to change. One of the main aims of AsgiSA is to stop intergenerational poverty and to do it predictably. This is something government and the private sector cannot leave to chance. Our choices of interventions in that regard include:
* provision of quality public education
* opportunities for employment creation with employment subsidy to push large numbers into labour markets soonest
* provision of comprehensive support of Small, Medium and Micro Enterprises (SMME) including micro-credit venture capital and institutions with appropriate capacity and contribution of private sector
* provision of basic services, schools, clinics, roads, Information and Communications Technology (ICT), energy, water and public transport
* acquisition of skills
* efficiency and capacity of the state
* spatial planning and location of human settlements of poor people in relation to economic activity
* partnership between community, government and being able to dealing conclusively with all these challenges must remain work in progress for the whole nation.
These are some of the vexing issues of our national interest. We are however in a positive growth path, our infrastructure and construction sector are booming although we have challenges of cost capital goods, and tourism is booming; our ICT industry is highly performing and has very good prospects; our agriculture can do much better, and there is significant growth opportunities in forestry. Our Business Process Outsourcing (BPO) industry also has good prospects.
All of these need skill. Our energy challenges will be overcome but we need you in the interim to be pro-active and save energy and make your own back-up plans.
Our public transport has a very ambitious plan that will change the lives of many communities. By 2010 we will be in a different place and it is not only the Gautrain but a countrywide plan. Our Expanded Public Works is also set to escalate and expand beyond infrastructure to include home-based care, early learning and health.
In conclusion, I would like as well to commend the venture of Xstrata Merafe for the role it will play in skills acquisition again. I do not need to tell you if this country is to grow and reach its maximum potential, our efforts together must yield results and together we must define this future which must speak to communities.
We also have to increase tradable manufactured goods. We also do our best to encourage a competitive currency and exchange rate and lower volume of imported capital goods and cost of doing business in South Africa are all under consideration. All of these we hope support your growth and sustainability.
Thank you for your hard work.
Good luck to you and to the community.
I thank you.
Issued by: The Presidency
1 March 2007
Source: The Presidency
Title: Mlambo-Ngcuka: Opening of Lion Ferrochrome Smelter
Address delivered by the Deputy President, Ms Phumzile Mlambo-Ngcuka, at the opening of Lion Ferrochrome Smelter, Steelpoort, Limpopo
Premiers Moloto, Makwetla,
Kgosi Sekhukhune,
Queen Mother Molotlegi
Director-Generals,
Executive Mayors,
Councillors,
Business Leaders,
Traditional Leaders,
Ladies and Gentlemen,
It is a pleasure for me to be here on this significant day. It is great a moment when we can gather for a memorable occasion for South Africa and for Limpopo, one of our neediest province when we officially open the Lion Ferrochrome Smelter project. We pay special recognition to Xstrata Alloys and Merafe Resources for putting together such an essential development project. We are glad that a significant industrial project also responds to our legislation, the Mineral and Petroleum Resources Development Act (MPRDA), which called for such partnerships as far back as 2002.
Where we called for black participation not only in ownership, but also in management control of the joint operations in all aspects of the mining business. We further introduce the social and labour plan for the benefit of the workers and communities, which is a significant contribution towards a shared bright future and for practising good corporate governance. All these objectives are meant to enhance the relationship between the mining industry and the mining communities and for the benefit of South Africa, also shareholders all of whom benefit when their company has positive relationships in its location.
The Lion Ferrochrome comes at a time when we have declining investments in the mining sector of South Africa against the backdrop of a commodity price boom. This project adds to manufacturing jobs and diversification from mining to beneficiation, which is indeed a highlight for us and what we have been advocating for. It is a contribution to both mining and manufacturing. We have also seen a marked growth in mining in the last quarter of 2006 of 4,6%. We note with interest the increase in the level of processed minerals year on year which this operation will add on and this is in line with our industrial strategy and the Accelerated and Shared Growth Initiative for South Africa (AsgiSA); this we welcome. Mineral processing is an area of high priority for the Department of Minerals and Energy (DME) and governments.
Our key objectives as government is to further stimulate economic growth, alleviate poverty and enhance job creation avenues. We seek programmes that are geared towards reducing poverty and halving poverty and unemployment by 2014. That is indeed attainable if there are more practical economic initiatives like those of Xstrata Alloys and Merafe Resources. The two came together in 2004 as pooling and sharing venture (PSV). Both companies came together with significant operating assets and with a growth potential that is boundless. We praise your joint vision that has also provided significant building blocks for increasing our human resources and skills development spheres. Xstrata and Merafe are young companies possibly with one of the very impressive growth history. It feels like yesterday when Mr Davies came to brief us about the birth of Xstrata.
The Lion Ferrochrome project is opportune for several reasons. From a purely business point of view, it is set to enhance overall cost competitiveness of the chrome produced in South Africa for the local and international markets. It will and must yield benefits not only for the province of Limpopo, South Africa and the Southern African Development Community (SADC) region.
This Lion Ferrochrome enterprise will go a long distance in providing a major injection into the first and second economy. For proof, one has only to look at the background that went into making Xstrata Merafe joint venture efforts were to make it a win-win venture. It is true that success of our first economy also has to be measured through changes in the new Black Economic Empowerment (BEE) campaign as the persisting second economy is in part a consequence of an un-transforming first economy.
We also see a relationship between such key projects and the success of our industrial strategy, especially in minerals such as chrome, where South Africa is so dominant and is endowed with large reserves for the future. In such cases we have a chance to make long-term projections for growth and a growth-path that responds to broad economic objectives, unlike in cases where we are running out of reserves or we are a small player.
South Africa has the largest known reserve base of chrome ore at 72,4%. And we are also number one producer of the world's ferroalloy at 40,5% of the world's production. This means as a world leader in this commodity we can also lead the world in diversifying our benefits. In the new policy context the future of mining in South Africa is measured also by its long-term impact in the quality of life of affected communities in the same way as value to shareholders. In countries like Canada and Australia it has been shown that whole communities can benefit from vertical and horizontal economic activity induced by mining only if government and private sector work together. We in South Africa are also determined that mining in South Africa does not leave us with the same legacy left by mining in Welkom, Newcastle and in the dense-labour-sending-areas such as the old Transkei, where thousands of ex-mineworkers who were migrant labourers are trapped in grinding poverty. After almost a century of supplying mines with highly exploited labour and sweat. In the new dispensation we want to build a predictable better life for all affected and to change the destiny of affected communities and workers who must not exit the industry as sick, old, poor and broken souls.
Our country with all its robust growth now at 5,5% of the Gross Domestic Product (GDP), has 12 million people who live on government grants. In addition we have 7 million young people between ages of 20 to 35 who have never had a job and have no likelihood of ever getting formal employment; they mostly have less than 12 years of schooling, are destined to poverty. However, they are trainable able-bodied and they hold a key to the future of this country, its stability and productivity. It is to them that our shared growth path depends because it is them we must share growth with. It is in these second economy citizens that need to benefit from our industrial strategy soonest while we also invest in absorbing the skilled minority and increase the number of skills and expertise. The lower than desirable volumes of manufactured and exportable goods has also been identified as a setback for faster and shared growth with job creation.
I am aware that some of your competitors here in South Africa are exporting ore and not beneficiating in the country. This is a matter on which we have asked DME to act on in accordance with our policy without delay. In this regard the Minister of Minerals and Energy will, sometime this year, gazette the beneficiation base levels which everybody will have to comply with and as we all know for chrome it is ferrochrome. Those who are not complying I would urge them to work with us to prepare themselves to comply. Moreover, doing so will augur well for our well-earned status as a world-class mining country.
It is encouraging to learn that this endeavour of Lion Ferrochrome has resulted in employment of 2 700 people during the construction phase while securing 'employment opportunities' for well over 450 people. As Xstrata Merafe brief confirms: "This and other benefits confirms the value of beneficiation to the economic growth of South Africa, as well as the sustainability of communities in which mining takes place." I am also told that the Lion Ferrochrome projects stands to boost skill expertise through its state-of-the-art centre that offers various skills and qualifications in line with the National Qualifications Framework. This is also significant as skills are a binding constraint for growth in South Africa; hence we have the Joint Initiative for Priority Skills Acquisition (JIPSA) and thanks to Xstrata also for supporting JIPSA initiative by investing in our students and trainees.
In the development of human capital we can ensure our resources, human and material, are used for sustainable economic and social development. We need all of you to help to look at how we can create exit paths; long and short staircases to move people out of the second economy. The proposed employment subsidy for first entrants into the labour market as announced by the State President in his State of the Nation Address provides one such facilitated entry into the world of work hopefully for millions who at 35+ have never had a job. We need the private sector in this regard to work with us in this ambitious plan.
Together we must end dualism in the economy. The key features of second economy include low skills, inability to contribute to GDP, burden of diseases, unaffected by the prosperous growing economy, no possibility to escape, plus the possibility that poverty will be passed on to the next generation. This is the reality we have to change. One of the main aims of AsgiSA is to stop intergenerational poverty and to do it predictably. This is something government and the private sector cannot leave to chance. Our choices of interventions in that regard include:
* provision of quality public education
* opportunities for employment creation with employment subsidy to push large numbers into labour markets soonest
* provision of comprehensive support of Small, Medium and Micro Enterprises (SMME) including micro-credit venture capital and institutions with appropriate capacity and contribution of private sector
* provision of basic services, schools, clinics, roads, Information and Communications Technology (ICT), energy, water and public transport
* acquisition of skills
* efficiency and capacity of the state
* spatial planning and location of human settlements of poor people in relation to economic activity
* partnership between community, government and being able to dealing conclusively with all these challenges must remain work in progress for the whole nation.
These are some of the vexing issues of our national interest. We are however in a positive growth path, our infrastructure and construction sector are booming although we have challenges of cost capital goods, and tourism is booming; our ICT industry is highly performing and has very good prospects; our agriculture can do much better, and there is significant growth opportunities in forestry. Our Business Process Outsourcing (BPO) industry also has good prospects.
All of these need skill. Our energy challenges will be overcome but we need you in the interim to be pro-active and save energy and make your own back-up plans.
Our public transport has a very ambitious plan that will change the lives of many communities. By 2010 we will be in a different place and it is not only the Gautrain but a countrywide plan. Our Expanded Public Works is also set to escalate and expand beyond infrastructure to include home-based care, early learning and health.
In conclusion, I would like as well to commend the venture of Xstrata Merafe for the role it will play in skills acquisition again. I do not need to tell you if this country is to grow and reach its maximum potential, our efforts together must yield results and together we must define this future which must speak to communities.
We also have to increase tradable manufactured goods. We also do our best to encourage a competitive currency and exchange rate and lower volume of imported capital goods and cost of doing business in South Africa are all under consideration. All of these we hope support your growth and sustainability.
Thank you for your hard work.
Good luck to you and to the community.
I thank you.
Issued by: The Presidency
1 March 2007
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