The mining and metals and engineering sectors have mostly welcomed President Cyril Ramaphosa’s plans around energy and infrastructure, following his State of the Nation Address (SoNA) on Thursday night.
The Minerals Council South Africa said in a statement that it was encouraged by the President’s commitment to rapidly and significantly increasing electricity generation capacity outside of State-owned power utility Eskom.
Ramaphosa said a Section 34 Ministerial Determination would be issued soon to give effect to the Integrated Resource Plan 2019. This section of the Electricity Regulation Act would allow municipalities to buy power outside of the national grid.
Such a determination would enable the development of additional grid capacity from other sources and reduce the municipal reliance on Eskom for power.
As announced last week, mining companies will soon be able to generate their own power.
The mining industry had a pipeline of energy projects totalling about 1.5 GW that could be brought on stream within the coming months and years.
Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Kaizer Nyatsumba, meanwhile, welcomed Ramaphosa’s undertakings to crack down on the criminal syndicate that had been confronting the construction industry, as well as his undertaking to stimulate economic growth through infrastructure investment.
Seifsa said it was pleased with the President’s declaration that a task team had been set up to target the “construction mafia” and all those who engaged in various forms of economic disruption over the last few years.
Further, Nyatsumba said the R700-billion infrastructure investment fund and the construction of the Umzimvubu dam would likely breathe life into the near-moribund construction subsector, which formed an important part of the broader metals and engineering sector.
Seifsa also noted it was positive to hear that a university of science and technology would be built in Ekurhuleni, Gauteng, as well as that the Durban port would be overhauled.
Meanwhile, the Minerals Council said it appreciated the encouragement that Ramaphosa gave on the implementation of the National Treasury’s “Economic Transformation, Inclusive Growth and Competitiveness” paper, which was an important set of policy options.
However, it was unclear whether a State bank would have a helpful role to play, and whether there was scope for a sovereign wealth fund, particularly in an era when it could be a debt trap.
The Minerals Council believed the President took the correct approach to State-owned airline South African Airways, recognising the need to establish a commercially and operationally sustainable airline no longer dependent on government funding.
“We hoped that, acknowledging the work of the business rescue practitioners, it was Ramaphosa’s intention to allow them to carry out their work effectively to achieve these goals.”
For the mining industry, specifically, the Minerals Council said it would be a great relief to see water-use licences being issued within 90 days of application and, secondly, the council welcomed the undertaking to establish specialised policing units to address the growing criminal groups that extort money from construction and other businesses.
“We trust that among the businesses Ramaphosa referred to were mining operations, which have been among the prime targets of these groups.”