Department of Mineral Resources: Implement change for the people

By the end of March 2015, the nation should have a much clearer idea of the progress made on the objectives set out in the Mining Charter. The responsibility of reviewing progress falls to the Department of Mineral Resources, the Government Department tasked with the hugely important role in securing a sustainable future for the country’s natural resources.

mining-facilities“A tripartite team has adopted the template which should enable us to release the results of the review by the end of March 2015,” Mineral Resources Minister Adv. Ngoako Ramatlhodi said in February.

Speaking at the Annual Investing in African Mining Indaba in Cape Town, the Minister said the department has set up a special processing team dedicated to process data, which is populating the template.

The Mining Charter is a legal instrument that enables transformation in the mining industry. It is aligned to other legislation that seeks to foster transformation in mining.

Minister Ramatlhodi said as per the objectives of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, they will promote equitable access to the nation’s minerals to all the people of South Africa.

They will also substantially and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the mineral and petroleum resources.

Other objectives are the promotion of economic growth and mineral and petroleum resources development, which will lead to the promotion of employment and advancement of the social and economic welfare for all South Africans.

“These are the principles that continue to guide us to meaningfully transform the industry and indeed the face of the South African economy,” Minister Ramatlhodi said.

“Given the centrality of mining to the economy of the country, we are leaving no stone unturned in providing a stable environment for the industry to grow,” Minister Ramatlhodi added.

To help facilitate this work, the Mining, Growth, Development and Employment Task Team (MIGDETT) was established as a platform for the ministry, industry and labour to engage in ongoing conversations to resolve challenges that arise.

“Amongst others, the forum discusses meaningful economic participation for employees and communities, Human Resource development, Health and safety,” Minister Ramatlhodi stated.

Ahead of the Indaba, Rob Davies, the South African Trade and Industries Minister wrote an article for Southafrica.info in which he underlined the enduring importance of the mining industry for the nation’s economy:

“Despite a declining contribution to GDP and employment, the minerals value chain remains a key pillar of South Africa’s economy and a major global player, accounting for a significant proportion of world production and reserves.

“The sector contributes 8.6 per cent (R263 billion) to the GDP, creating more than 500 000 direct jobs, 50 per cent of forex, accounts for 12 per cent of investment and accounts for 13.2 per cent of corporate tax receipts. South Africa is a major supplier of coal, PGMs, gold, diamonds, chrome, iron ore, vanadium and manganese.

“Although South Africa is endowed with exceptional mineral resources, further downstream and upstream beneficiation has not fully reached its full economic potential, mainly due to structural conditions within key value-chains. The DTI is at the forefront of driving the country’s industrialisation agenda wherein mineral beneficiation is a key focus area as a major stimulant,” he explained.

“Key on this agenda is promoting investment in the sector using policy levers and incentives, encouraging local content throughout the minerals value chain, availing industrial financing, reducing export cargo dues on beneficiated cargo, export credit insurance and stimulating market opportunities especially exports into the rest of the continent and South America. South Africa will also explore support measures to increase the local value add of inputs into the minerals value chain.

“In 2015 economic forecast reveals that the global economy is likely to continue expanding at a moderate pace, pushing demand for minerals slightly higher. Despite the fact that China and some part of Europe are still on a slow the economic growth, the United States is on a rebound and Japan’s economic recovery is still on track,” Davies continued.

The Department’s website illustrates how Davies’ words fit well into its vision: “The vision of the Department of Mineral Resources is to enable a globally competitive, sustainable and meaningfully transformed minerals and mining sector to ensure that all South Africans derive sustainable benefit from the country’s mineral wealth. This is achieved within our legislative framework and as the legitimate custodian of the country’s mineral wealth.

“Our mission is to promote and regulate the minerals and mining for transformation, growth, development and ensure that all South Africans derive sustainable benefit from the country’s mineral wealth.”

Of course the industry faces many challenges with land rights and labour disputes hitting the headlines in recent years.

copperThe history of mining in South Africa is a long one and has been fraught with such bumps in the road – and the need for regulation was realised at an early stage. The DMR is consequently, in all likelihood, one of the oldest Government departments in the country, with a number of Acts passed in 1897 and 1898, pertaining to the former Registrar of Mining Rights.

In 1980 the Government portfolio containing mining was changed from Mining, Environmental Planning and Energy, to Mineral and Energy Affairs. This subsequently changed to the Department of Minerals and Energy in 1997.

An important aspect of mining and minerals policy in South Africa is that it is based on the principles of the Freedom Charter, meaning that mineral wealth beneath the soil will be transferred to the ownership of the people.

The Mineral and Petroleum Resources Development Act is a key piece of legislation, as the Department’s website explains: “This has opened doors for the substantial and meaningful participation of historically disadvantaged South Africans in the exploration and exploitation of mineral resources. The Act enshrines equal access to mineral resources, irrespective of race, gender or creed. It also provides for the development of the Broad Based Socio-Economic Empowerment Charter, which is popularly known as the Mining Charter. The Mining Charter, as promulgated in 2004 made provision to review the progress against agreed targets after five years of its implementation.

“The introduction of the Mining Charter in South Africa was aimed at transforming the mining industry to redress historical imbalances engendered by apartheid so that the industry is consistent with the changes in South Africa’s overall transformation of its social, political and economic landscape.”

With news imminent on the progress that has been made, it will be fascinating to see how successful the Department of Mineral Resources has been in effecting transformation.