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Approving outstanding permits could shift economy in 12-18 months, says Mzila Mthenjane

Joburg Indaba mining revival panel discussion covered by Mining Weekly’s Martin Creamer. Video: Darlene Creamer.

6th October 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – If the 5 066 outstanding mining and exploration permits were approved, South Africa could begin to see a shift in the economy within 12 to 18 months, new Minerals Council South Africa CEO Mzila Mthenjane told this week’s Joburg Indaba.

In response to questions put to him by ENSafrica COO Otsile Matlou during a panel discussion on reviving South Africa’s shrinking mining industry, Mthenjane highlighted the importance of the implementation of a solid economic plan for the overall benefit of South Africa and its people. (Also watch attached Creamer Media video.)

Expressing both the unhappiness of the South African mining sector as well as its hope, Mthenjane said: “We are unhappy about the state of the nation. We are unhappy about the conditions under which we operate, and, as an industry, we receive a lot of demands from various directions.

“But that unhappiness is coupled with hope because if you look at the suggestions coming through and the actions that are being taken to rectify the situation, it’s not just whinging and sitting back, but it’s actually doing something about it,” Mthenjane said, citing participation in the National Electricity Crisis Committee and the National Logistics Crisis Committee initiatives as indications that the mining industry has not given up, despite the challenges.

“But I think it is important that we express ourselves in really normal terms about unhappiness, in terms of the state of the economy. That’s our agenda as an industry in so far as engaging with society is concerned,” he explained.

Regarding the need for well-functioning infrastructure, he recounted South Africa’s witnessing of high demand for its mined materials during demand upcycles.

“We’ve seen how the mining industry goes into a boom when China is hungry for materials. Well, infrastructure provision is something we’ve got to do for ourselves, as an Africa continent and as South Africa, in terms of our economic plan.

“It’s not infrastructure for its own sake, it’s infrastructure because we need it. We need the roads and railways, and we need to encourage more in terms of the green transition such as fuel cell electric vehicles that are going to have an impact on platinum group metals demand.

“The whole green transition is going to have a huge drive for our own mining but also for the rest of the African continent."

BUSINESS, GOVERNMENT ALIGNMENT

Mthenjane emphasised the importance of initial overall economic alignment between business and government, and then, within that, the provision of “a very special and specific location for mining”, to facilitate South Africa’s short-term economic advancement.

“I’d like to call it a low-hanging fruit and easy pickings, because within 12 to 18 months, you could begin to see the shift in the economy if we had an approval of the outstanding 5 066 mining and exploration permits,” he stated during the panel discussion covered by Mining Weekly.

A summary of Fraser Institute issues was also provided. “We did quite an in-depth assessment of the most recent report of the Fraser Institute for our members and key takeaways for me are that the 15 elements of the Fraser Institute cut across environment, social and governance, as well as economic issues.

“The 15 elements are rated in such a way that participants will rate an issue as either encouraging investment or deterring investment. What’s interesting is that of the 15 elements, the top nine are the most critical that we must solve – security and infrastructure, amongst others.

“Interestingly, the issue of a geological database and the cadastral system comes in the bottom half, so it’s not a major issue and solving that is not going to solve all the problems in terms of what we need to do to encourage mining.

“But the most important ones are administration, interpretation and enforcement to remove uncertainty. An exploration company has a budget that has to take care of administration, which is applying for mining rights, paying people, but the bulk of the budget is around actually drilling holes in the ground to try and find the orebody.

“To the extent that there is an extended period of administration costs that an exploration company then exhausts, it then has to start digging into the exploration budget and that’s when the exploration company packs up and goes, because the exploration is no longer viable.

“The certainty of the application process is absolutely critical, so there are a number of other factors that need to be solved … to have that positive sentiment and possibly begin to attract exploration investment,” Mthenjane said during the panel discussion.

Edited by Creamer Media Reporter

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