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South Africa keen to harness hydrogen economy opportunities, President Ramaphosa tells Indaba

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South Africa keen to harness hydrogen economy opportunities, President Ramaphosa tells Indaba

Photo by Creamer Media
President Cyril Ramaphosa at the Investing in African Mining Indaba.
President Cyril Ramaphosa at the launch of the hydrogen truck.

10th May 2022

By: Martin Creamer
Creamer Media Editor

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CAPE TOWN (miningweekly.com) ­– It is just amazing to see the innovation that the mining industry is capable of scaling up, President Cyril Ramaphosa told the Investing in African Mining Indaba in his enthusiastic address on Tuesday.

“Last week, I attended the launch by Anglo American of the world’s largest hydrogen-powered mine haul truck.

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“This truck will be powered by an entire ecosystem of hydrogen production around the mine itself, and I got so excited and so taken away that Botswana President Mokgweetsi Masisi remarked on seeing the photograph of me in this massive truck that I looked like a young boy excited over a toy.

“I said to President Masisi, when I get fired from my job, I’m going to apply to go and work on this type of truck,” Ramaphosa quipped as he digressed from his keynote address which drew considerable applause.

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“Yes, President Masisi, I still get excited over things like that,” he reiterated to the Botswana President, who was in the audience with Zambian President Hakainde Hichilema and Democratic Republic of Congo Prime Minister Jean-Michel Sama Lukonde,

“We are keen to harness the opportunities of the hydrogen economy,” said Ramaphosa, who highlighted that the Mining Indaba is taking place at a time when the world is having to adapt to new circumstances, confront new challenges and be prepared to seize new opportunities.

“The mining industry also needs to manage the risks and potential benefits of rapid technological change, shifting market demand, climate change and geopolitical uncertainties that abound.

“After more than 150 years, mining remains a critical pillar of our economy. I often refer to it as a continuous sunrise sector of our economy,” said Ramaphosa, who drew attention to mining being a significant contributor to export earnings, an important source of foreign direct investment, while directly employing nearly half a million people. 

“And we expect mining’s significance and contribution to our economy to continue growing,” he emphasised during his Indaba address covered by Mining Weekly.

Like many other parts of the African continent, South Africa was abundantly blessed with vast mineral deposits that form the basis of the most important applications used in society and economies today.

Mining companies still saw the potential in South Africa and  Southern Africa, President Ramaphosa added.

At the fourth South Africa Investment Conference earlier this year, investments valued at around R46.5-billion were pledged towards mining and mineral beneficiation.

But in addition to the great prospects for South African mining, the industry also faced significant challenges.

“It is a matter of grave concern that South Africa has fallen into the bottom 10 of the Fraser Institute’s Investment Attractiveness Index rankings. 

“We are currently standing at seventy-fifth of 84, which is our worst-ever ranking. 

“This ranking underlines the fundamental reality that South Africa needs to move with greater purpose and urgency to remove the various impediments to the growth and development of the industry.

“We understand very clearly the need to fix the regulatory and administrative problems that have crept into the system.

“We need to clear the backlog of mining and prospecting rights and mineral rights transfer applications, put in place a modern and much more efficient cadastral system, and implement an effective exploration strategy.

“We understand very clearly the need to significantly improve the functioning of our railways, which have fallen into disrepair, and ports, which are not performing at the level that we want them to perform, and the vital importance of ensuring a secure and reliable supply of affordable electricity,” Ramaphosa said.

These tasks were, he added,  at the forefront of South Africa’s economic reconstruction and recovery efforts, which he described as being now firmly underway as part of Operation Vulindlela, an initiative of the Presidency and National Treasury, working in partnership with the Department of Mineral Resources and Energy and other departments. 

“An important area of progress is regulatory reform to facilitate new electricity generation by the mining and other sectors to meet the deficit that we now have with energy generation. 

“Regulations have been amended to allow companies to invest in new generation capacity of up to 100 MW without needing to apply for a licence. 

“We are working to further cut red tape for the registration of projects, to accelerate environmental approvals and to strengthen the capacity of Eskom and municipalities to link such projects to the grid,” the President said.

He noted that, according to the Minerals Council South Africa, around 4 000 MW, or R65-billion, of such electricity generation capacity investment was in the pipeline and government had been told this would be implemented. 

“South Africa’s energy landscape is being fundamentally transformed to introduce greater competition, more diverse energy sources and greater energy security into the future.

“As we go around the world and see how other countries go about their energy generation, we have learnt lessons and it is for this reason that we are moving ahead with this transformation.

“The unbundling of Eskom into separate entities for transmission, distribution and generation is on track, and is set to be completed later this year. 

“Operation Vulindlela is working with the Department of Water and Sanitation to implement a turnaround plan for the issuing of water use licences, that are so needed in the mining industry, something that will enable mining operations to function optimally. 

“We are working towards a target of 80% of all applications being resolved within 90 days, and this will have moved from a process that took three years for a water use licence to be approved,” Ramaphosa said.

On rail operator Transnet, he said that the publication of the White Paper on National Rail Policy outlined plans to revitalise rail infrastructure and enable third party access to the freight rail network. 

“We have heard the calls from the industry for private operators to be allowed to operate the country’s dedicated coal, iron-ore and manganese lines.  

“We hope that such proposals will be discussed at this Indaba, drawing on the experiences of other countries.

“Working together with the industry and other stakeholders, we are strengthening the capacity of our security services and law enforcement agencies to tackle what a number of countries are experiencing right now –  illegal mining, cable theft and general damage to infrastructure. 

“We are setting up focused teams in our security establishment to deal with these challenges and a number of successes are already being recorded.

“We value our ongoing collaboration with Minerals Council South Africa to resolve these and other challenges facing the industry, and this is where the collaboration between the public sector, meaning the State, and the private sector, is showing great benefit and progress,” the President added.

According to companies surveyed by the Minerals Council, if these regulatory hurdles could be resolved, they would be prepared to increase their investments by 84% over the next five years, over and above existing capital investments.

“Now this is sweet music to a government, which we hear from the private sector and we will, in our collaboration, continue to ensure that what they have set out to do is achieved.

“We are committed to mobilising the necessary resources and providing the necessary incentives for a new wave of exploration, particularly of the minerals required for the global energy transition,” he said.

The recently-released Exploration Strategy and Implementation Plan lays out South Africa’s plans to move to future strategic metals such as copper, nickel, cobalt and rare earths. 

As a world leader in platinum group metals, South Africa is perfectly poised to take advantage of the growing demand for such metals.

"At the same time, we must continue to expand the production of some of the minerals that have been the mainstay of our mining industry for years, and for which there is still much demand."

HYDROGEN ACTIVITIES

President Ramaphosa said that South Africa aimed to be not only an important hub for the production and export of green hydrogen, but also of green ammonia, green iron and steel, and sustainable aviation jet fuel.

South Africa’s Hydrogen Strategy, he said, was aimed at stimulating and guiding innovation along the value chain of hydrogen and fuel cell technologies. 

“What I saw at the Mogalakwena mine of Anglo American just gave me a look into what the future looks like.

“This will not only sustain demand for platinum group metals but also position South Africa to derive benefits from supplying high value-added products. 

“As a continent that has such a rich abundance of resources, Africa needs to beneficiate its mineral endowments for the benefit of the current and future generations,” he said, adding that mining had an important role in South Africa’s just energy transition. 

“In our onward march towards a low-carbon future it is critical that our efforts are both realistic and sustainable.

“We have resuscitated the successful Renewable Energy Independent Power Producers Procurement Programme, with plans to substantially upscale investment in wind and solar power, which we also have in great abundance

“We are diversifying our energy mix under the Integrated Resource Plan. We have supporting legislation to mitigate and adapt to climate change. 

“In line with our just transition efforts, we are in the process of mobilising international finance as part of the effort to ensure that affected communities and existing industries are supported during the process of transition,” the President said.

“It is clear that as our reliance on coal is reduced over time, pathways towards new economic activity need to be created for workers in affected industries. 

“As we confront the reality of energy insecurity and the development of new energy sources, it is critical that South Africa, like all developing economies, be given the necessary developmental space, because we are still in development and that space is absolutely necessary for us to be able to transition in an orderly and sustainable manner. 

“It is important that as we undertake a just energy transition, we adhere to the principle contained in the UN Framework Convention on Climate Change of common but differentiated responsibilities and respective capabilities.

“The growth and development of mining in South Africa will not be possible unless the working and living conditions of the people who work in the mining industry and mining communities are improved.

“It is important that mining companies engage with labour in the spirit of partnership and cooperation, completely shorn of hostility that led to future problems. 

“It is vital that mine safety and the health of workers becomes the industry’s foremost concern. On this there can be no compromise.”

Ramaphosa commended the mining sector for the financial and logistical support it gave to the rollout of South Africa’s Covid-19 vaccination programme. 

As of the start of May, more than 75% of mineworkers were fully vaccinated, and 66% were partially vaccinated. 

Drawing on its extensive experience with managing other communicable diseases such as tuberculosis and HIV, the mining sector has been able to manage the pandemic carefully and systematically. 

“I’d like to thank mining companies for the cooperation that they have demonstrated to us as government. We thank you dearly for the way in which you worked with us.

“The partnership between government and Minerals Council South Africa stands as a fine example of how the private sector can support a nation’s development agenda.

“In undertaking its vaccination programme, the mining industry has also demonstrated its responsibility to the communities in which its operations are located.

“It is important that this commitment is sustained in all areas of development, including through the effective implementation of social and labour plans, responsible environmental practices and local procurement. 

“The future of mining on the African continent holds great promise for investment, for industrial development and for growth and for profit for the corporates.

“We have a shared responsibility – as governments, as mining companies, as labour and as communities – to realise that promise and to make it happen.

“As the government of South Africa, we are firmly committed to fulfil our responsibilities and to implement all the processes needed to ensure growth, sustainability and prosperity of the mining industry.

“We are firmly committed to ensuring that mining occupies its rightful place as an industry of the future, an industry that has given birth and strengthened our industrialisation and manufacturing processes – mining having been the very first industry that has propelled South Africa to be the industrial and manufacturing powerhouse that it is.

“It is important for us, as the government of today, to ensure that we do support the mining industry and make sure that it continues to grow for it is not only a great employer of the people of our country, but it is also a contributor to the growth of South Africa.

“Many would say that the economic progress that South Africa has achieved is because of mining and may it continue to be so,” President Ramaphosa concluded.

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