South Africa’s mining problem has been the failure of regulation to be accountable and transparent, with the desire to achieve race transformation leading to secrecy.

If mineral licensing had to be applied for publicly on the Internet and the Department of Mineral Resources had to, in turn, respond publicly, much of the problem would be solved.

But from both sides, South Africans have abused race to create phoney partnerships and phoney transactions, often in darkness.

“That’s what we now need to fix in South Africa,” Business Leadership South Africa outgoing chairperson Bobby Godsell said to applause in response to a question from the floor at last week’s African Mining Network dinner, attended by Creamer Media’s Mining Weekly.

The former AngloGold Ashanti CEO saw no reason why the State could not regulate minerals in an open, accountable and honest way and said, in respondse to a question on how much-needed mineral exploration could be stimulated, that a major public-sector contribution was needed to start exploration off by providing information on where different minerals are or may be located, which could then be followed by the private sector concentrating on the realisation of commercial value.

Exploration Partnerships
He believes it possible to establish public–private exploration partnerships in which every private-sector mining activity enhances the basic public knowledge of South Africa’s and Africa’s mineral resources while still allowing companies to preserve their own commercial interests.

As nonexecutive chairperson of London-listed Russian gold and silver mining company Polymetal, Godsell drew from his five years of involvement in the Russian Federation, where he found major former Soviet Union investment in geological surveys to have resulted in a far better sense of mineralisation, but, in the absence of a market economy, a very poor sense of commercial value, which the federation has remedied by making mineralisation data publicly available and having commercial application done through openly contested auctions.

As the African Mining Network’s guest speaker, Godsell identified these five steps as being necessary to ensure that mining is positive for host countries:

• sharing risk and reward with stakeholders;
• being prepared to sow before expecting to reap;
• developing skills and engaging in team building;
• fully embracing the digital revolution; and
• putting innovation at the heart of the business when it comes to methods of mining, metallurgy, mineral economics and activity budgeting.

He contended that the sharing of risk and reward needed to cover the uncertainties of exploration, the volatility of commodity prices and the threats to health and safety, while rewards should come into effect for operational outperformance, good commodity prices and geological windfalls.

He described health and safety as a risk that has to be managed and shared, with the law entitling any workers to exit unsafe areas.

Even though South Africans killed about 25 000 people on the country’s roads every year, they had not stopped driving. To promote safety in mining, a conscious discussion about risk sharing is needed.

Mineral Resources
He criticised those who refer to developing-country mining as a curse, but who never denigrate resources in the same  way when referring to Britain’s Industrial Revolution or the era of America’s discovery of oil.

He described the use of mineral resources as being central to the industrialisation and urbanisation of every country. While conceding that resources could also be used “badly”, he urged that Africa avoid such use of resources at all costs, as its billion-plus people were crying out for cities with electricity, water, rail and roads, which would require widespread positive use of the continent’s many minerals.