Upbeat Shabangu surprises

SOUTH African Minister of Mineral Resources Susan Shabangu delivered a positive opening address to Investing in African Mining Indaba, despite the strike action that is costing platinum producers millions in lost production.
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Kristie Batten

The 20th instalment of the event coincides with the 20th anniversary of the end of apartheid in South Africa.

In her opening keynote, Shabangu played down the latest round of industrial action affecting the platinum industry and threatening gold miners.

“When we look at the current headlines, they tend to focus exclusively on such issues as labour instability,” Shabangu said.

“Government has intervened boldly and decisively to provide leadership and restore stability in the sector.”

Shabangu encouraged stakeholders to continue to work together to ensure that peace and stability prevailed.

“I can confidently declare that we have restored the rule of law, peace and stability in this industry,” she said.

“These developments debunk the myth that labour laws in South Africa lack flexibility and are only created to protect workers.

“Conversely, our constitution provides the right of workers to strike, within the prescripts of the law, while simultaneously providing employers with the legal recourse to balance either extreme.

“We must commend our stakeholders, especially organised labour, for heeding the call to operate within parameters of the law.”

But Grant Thornton Asia Business Services managing director Lauren Patlansky was surprised by the opening address after warning that the unionisation of South Africa’s mining industry, coal infrastructure constraints and government regulation were threats to the country’s mining industry.

“Minister Susan Shabangu’s address this morning at the Mining Indaba 2014 in Cape Town was overly positive, which surprised me a little, particularly if one considers the dramatic losses that the platinum and gold industries have experienced in the recent past. They are losing billions due to strike action specifically,” she said.

“In addition, the minister’s positive address failed to mention how labour costs continue to rise while commodity prices are simultaneously declining – this paints a clear picture that mines in South Africa are not even breaking even.”

“I’m concerned that the minister failed to mention anything about the issue of power and energy challenges currently being experienced in South Africa, especially when other countries on the African continent – like Nigeria – are privatising their power industries, which could potentially give Nigeria double-digit growth rates in the months and years to come.”

The Mineral and Petroleum Resources Development Act (MPRDA) bill is currently being finalised in the South African Parliament and one of its aims is to promote the “mineral value addition” of the country’s minerals.

“With regard to mineral value addition – the provision enables the game-changing, win-win value proposition for local processing of minerals,” Shabangu said.

“Continued exportation of unprocessed minerals denies South Africa the possibility for skilled employment, skills development and contribution to the fiscus needed to address our developmental imperatives.

“Let me reiterate my previous messages on our intentions – no mining company is either required to beneficiate or is forced to subsidise the manufacturing industry.”

Patlansky warned that the regulation would do nothing to promote foreign investment.

“There is no doubt in my mind that beneficiation of our resources is important – but at what costs to the economy?”

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