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Mining Phakisa can help unlock mining, exploration investment – Chamber

President Jacob Zuma on the upcoming Mining Phakisa Laboratory. Camera Work & Editing: Nicholas Boyd. Recorded: 13.8.2015.

13th August 2015

By: Terence Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – The Chamber of Mines (CoM) has expressed optimism that the upcoming Mining Phakisa Laboratory, scheduled for October, will enable South African mining stakeholders to begin tackling prevailing impediments to mining and exploration investment and address issues undermining the competitiveness of the sector.

President Jacob Zuma announced on Thursday that the Mining Phakisa, which would employ a methodology pioneered by Malaysia under its ‘Big Fast Results’ initiative, would deal with six themes, including:

• Improving upstream linkages between mines and the domestic capital-equipment sector.
• Exploring “win-win resolution” to the beneficiation of both bulk resources and precious metals.
• Pursuing social and community development, with a particular emphasis on housing.
• Supporting increased exploration activities, including by providing more detailed geo-scientific information to explorers.
• Enhancing research, development and innovation within the cluster, and
• Planning and implementing holistic mine modernisation.

Speaking at the Sefako Makgatho Presidential Guest House, in Pretoria, Zuma said other crosscutting areas could also be integrated into the discussions, including the development of emerging miners, enhancing investment and infrastructure as well as mine rehabilitation interventions.

No specific mention was made, however, of a proposal to address the ‘once-empowered, always-empowered’ dispute between the industry and government through the Mining Phakisa. It is understood that a parallel negotiation is likely to be pursued in a bid to seek a settlement on how the empowerment clause in the Mining Charter should be interpreted. But the legal option had not been abandoned.

CoM CEO Roger Baxter told Mining Weekly Online that the chamber was “fully behind” the Mining Phakisa process, which recognized the strategic importance of the sector to the South African economy, as well as the fact that it was facing “headwinds”.

Zuma said “an alarming number of companies” were currently lossmaking, and lamented the drop off in investment in exploration and extraction. “At current prices more than 40% of the country's platinum mining industry and 31% of the gold mining industry is lossmaking. We need to work together to turn this around.”

Baxter said the methodology would create a platform for the stakeholders to work together on “three-foot plans” to deal with the challenges being faced by the mining sector and to improve prospects for realising the potential of the sector in the longer run.

“Ultimately, it will revolve around investment promotion – growing the investment profile of the country and encouraging greater greenfield exploration.”

The chamber was keen to use the process to outline its vision for a “viable, sustainable and profitable mining sector”. “Some people might say, ‘don’t talk about profitability’ – profitability is almost like a swearword. But the reality is investment will follow the money and for us to encourage investment in the sector we have to make it viable and attractive to domestic and international investors.”

Baxter was particularly optimistic about the prospect of improving the environment for greenfield exploration, which was the “ultimate lifeblood” for the industry. “At the moment most of our exploration is brownfield around existing deposits, but that has its limits.”

Steps could be taken, for instance, the re-map South Africa’s high-level geophysical data, make it more accessible and offer incentives to explorers. “A lot of people say South Africa is well explored. Well is South Africa’s high-level geophysical data readily available on the Internet for any exploration company globally to take a look at? The answer is no.”

Edited by Creamer Media Reporter

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