TORONTO (miningweekly.com) – Despite the commodity price collapse, Africa was ready to participate as a host continent to the global mineral extraction industry, South African Mineral Resources Minister Advocate Ngoako Ramatlhodi told the Canada-Southern Africa Chamber of Business's sixteenth Annual African Mining Breakfast on Tuesday.

“We want to break the paradox that we are the primary location, yet the poorest,” he emphasised.

The African Union (AU) has adopted the African Mining Vision (AMV) in February 2009, the main premise of which was for Africans to increasingly share in the continent’s mineral prosperity.

The Minister said there was an ongoing debate about whether the AMV was an impediment or an enabler of African economic development in the current low commodity price environment, but he noted that it was a good starting point to get the conversation going.

Ramatlhodi explained that in a renewed effort to revive the vision, the signatories to the AMV had last year started to put together plans to implement the vision on a ministerial level, while an office had also been created to implement the vision on a technical level across Africa.

He believed the AMV would progressively motivate and hold governments more accountable to create positive legal frameworks and stable economic climates in their respective countries, while also enabling prospective companies to gain social licence for their projects more easily.

“You can not operate without social licence anywhere in Africa anymore, even if you have the proper permits in place,” Ramatlhodi warned. “Locals should benefit from training and local business procurement.”

He went as far as to say that in certain cases, the locals would even protect mining operations from governments if they had completely bought into the project.

INFRASTRUCTURE INVESTMENT
Ramatlhodi reiterated that the AU had set out to integrate infrastructure across the continent, a cause that South African President Jacob Zuma was personally spearheading.

Indeed, South Africa had the most advanced infrastructure in Africa and was busy implementing a massive R1-trillion (more than C$106-billion) infrastructure investment programme to improve roads, rail, ports and to rebuild parastatal electricity generator Eskom from the top down.

Ramatlhodi announced that, despite being behind schedule, as of Monday at 11:00 Central African Time, the first generator of the new R120-billion Medupi coal-fired power station was synchronised with the national grid, signalling what was hoped to be the end of the country’s electricity woes that had left many heavy industry participants with constrained access to electricity over the past several years.

The new unit would ramp up to its full 794 MW capacity within three months and, later, when all six coal-fired generating units had been synchronised, the power station would add 4 800 MW to the country’s aged power grid by about 2019.

The Minister was optimistic about South Africa’s energy challenges, saying it was exactly in this area in which the country offered good investment opportunities in renewable-energy sources and even privatised coal-fired power stations.

Further, Ramatlhodi reassured investors that, while South Africa was currently revisiting its mineral development strategy, the country aimed to impose a 20% free-carried interest on oil and gas projects, while the current broad-based black economic-empowerment regulations, which required any mining project to have a 26% black empowerment partnership, was not under review and would remain in force as is.

“It is our insurance for sustenance,” he stated, adding that the South African government would assist noncompliant companies to comply, before, as a last-resort, revoking mining permits.