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Shabangu talks up a cohesive approach to African mining

Mineral Resources Minister Susan Shabangu

Mineral Resources Minister Susan Shabangu

Photo by Duane Daws

5th March 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – South Africa is the richest country in the world when it comes to its minerals endowment. However, much of the continent had historically been – and is still being – exploited for overseas gain, with little value trickling down to local residents, South African Mineral Resources Minister Susan Shabangu said during the Prospectors and Developers Association of Canada’s (PDAC’s) annual convention, in Toronto.

Even after South Africa had gained its freedom from apartheid in 1994, the legacy irregularities persisted in the country’s high levels of unemployment and poverty; aptly illustrated by a current month-long wage strike at platinum mines in Rustenburg, in the North West province.

But, the story was much the same for the rest of the African continent.

“There’s a mind-shift needed in the industry, to secure more benefits from Africa’s great mineral wealth for the people,” she said during a seminar hosted by Webber Wentzel and MineAfrica on Sunday.

The Minister pointed out, for example, that Africa yearly received about $400-billion in revenues from oil and gas exports; however, its consumption of those resources was roughly equal to that of New York state, which only had about 17-million residents, compared with Africa’s 1.03-billion residents in 2011.

Shabangu became Minerals Minister in 2009, following an illustrious career as a freedom fighter under the African National Congress.

She lambasted mining commentators, analysts and the media for mostly only portraying a negative image of South Africa, and Africa in particular, saying the opportunities and positive developments were often overlooked.

She suggested a collaborative approach be developed to demonstrate the positive long-term development in a way that created value for all.

VALUE FOR AFRICA

Investor interest in Canada is growing. Canada was among the three biggest sources of acquisition deals in the African mining sector last year, according to a recent report by EY.

The Minister referenced the African Union’s (AU’s) ‘African Mining Vision’ as being a blueprint for creating what had been billed by some analysts and political leaders as “The African Century”.

Heads of State had adopted the Africa Mining Vision at the February 2009 AU summit, following the October 2008 meeting of African Ministers responsible for mineral resources development. This was Africa’s own response to tackling the paradox of great mineral wealth existing side by side with pervasive poverty.

Shabangu said that Africa was ready for a “game change”. To this end the AU’s Trade Commission had identified the need to establish a coordination centre to take resources forward.

Coordinated infrastructure development also formed part of the AU’s ‘Agenda 2063’, an approach to how the continent could effectively learn from the lessons of the past, build on the progress now under way and strategically exploit all possible opportunities available in the immediate and medium term, to ensure positive socioeconomic transformation within the next 50 years.

Shabangu said that the AU was mulling the creation of several sub regions on the continent to streamline beneficiation. For example, diamonds had been divided into four sub regions with industry clusters for value addition. Also, Africa’s ports would eventually be strategically focused and specialised for certain commodities, depending on the regions.

This objective was underpinned by the need to create interconnected transport infrastructure to serve the greater regions.

Shabangu noted that South Africa, for instance, was engaging Botswana and Mozambique about creating joint infrastructure to move raw materials from remote regions to either ports or industrial sub regions.

Further, realising the dream of creating value-adding local businesses would also create room for research and development initiatives at a local level. She said that value addition was critical to move away from the persistent extractive nature of African mining.

“The AU is playing a critical role in achieving this,” she said.

CHANGING LANDSCAPE

The Minister pointed out that South Africa’s mining landscape was changing. New mining companies were emerging using modern technology at Limpopo province’s platinum mines, and mechanised coal mining in Mpumalanga.

Shabangu noted that the South African mining industry was still stuck in 1960s when it came to skills development, especially among black people who were disadvantaged late entrants to the job market. Capacity building was now taking place, which she underlined was in itself a critical path to achieving poverty reduction.

The year 2014 also marked ten years of implementation of the country’s Mining Charter, which is the subject of a performance review. Speaking at a seminar hosted by Fasken Martineau, in parallel with the PDAC convention, Shabangu on Tuesday said that the results from the ongoing review would be revealed by the end of November.

She also stressed that South African mining licences were secure once granted and could not be waived by the whimsical stroke of a pen. “We have implemented processes for everything, and the outcomes of these processes cannot be pre-empted by anybody,” she said in an effort to appease recurring investor concerns on the security of tenure in the country.

 

Edited by Creamer Media Reporter

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