South African mining projects worth R20bn ensnared by red-tape, says Minerals Council
MORE than R20bn of potential investments in South African mining projects by members of the Minerals Council was tied up because of regulatory hurdles, said the council’s CEO, Roger Baxter, on Wednesday.
He was speaking at the annual Investing in African Mining Indaba on a panel discussion on government and private sector collaboration.
Other panelists from the mining industry welcomed the intention of South Africa’s department of mineral resources and energy (DMRE) to put a ‘One Stop Shop’ in place to halve the time to process mining licences, but they said a great deal more had to be done to unlock investment.
DMRE director-general Advocate, Thabo Mokoena, said the department was eager to build on the positive collaboration with the industry and other stakeholders that had resulted in the mining industry’s rapid recovery from the April Level 5 Covid-19 lockdown in the second and third quarters of the year.
Government’s goal was to lift mining’s contribution to the country’s GDP to 10%, from 8% at present.
The DMRE would be collaborating with mining companies to address exploration spending, infrastructure backlogs, regulatory and policy uncertainty, localisation, and beneficiation.
“We have also agreed to look seriously at a One-Stop-Shop,” he said. “We are looking at the challenges that each mining company is facing. We will appoint a team from DMRE to address them and after three months we will give mining companies feedback on what has been done.”
Werner Duvenhage, MD of Richards Bay Minerals, said huge challenges still stood in the way of the group’s Zulti South project, which would extend the mine’s life by 25 years and generate about R100bn in capital spending over that period with a range of downstream businesses. Although the project had advanced considerably, it was not yet in development.
Having a One-Stop-Shop to address these blockages would help, he said. But collaboration was needed all the way through to the point where such a project was delivered. It should not stop when the mining licence was issued.
Neal Froneman, CEO of Sibanye-Stillwater, said there were many examples of areas of improved collaboration between government and the industry. But there were still sticking points.
Speeding up mining right applications was a good start, but to make a quantum leap to reboot the local mining industry, there had to be a balance between the rights of investors, communities, labour and government, Froneman said.
The industry needed reliable, environmentally-friendly and cost-effective power as a matter of urgency. It was also important to create trust between all different stakeholders since there was still no common vision.
Baxter said unlocking exploration spending was critically important to ensuring South Africa has a new project pipeline, but this was only one area that had stalled.
Minerals Council members were eager to develop more than two gigawatts of mostly renewables energy projects, but they said it took seven months to get a grid connection from Eskom and four months to get a licence from the National Electricity Regulator of South Africa (Nersa). Some of these energy projects could make a difference to South Africa’s power shortages in the short term.
Baxter said the focus was not just on discussion, but also on implementation. He expected there would be some exciting developments in the next two weeks that would help to unblock some big projects.