Riyaz Patel
South Africa’s Mineral Resources and Energy Minister says the mining and energy industries remain the bedrock of the South African economy, and crucial that these sectors are supported to propel the economy forward.
Speaking at the 2019 Joburg Indaba, Gwede Mantashe assured stakeholders in the mining industry that his department remains ready to engage constructively to contribute to “our country’s growth and development aspirations.”
The Indaba is addressing key issues around the current economic and regulatory environment.
South Africa is pushing coal producers to cut prices to help save Eskom, the debt-stricken power utility that threatens to unravel the country’s finances.
“At these prices of electricity, this economy is going to collapse,” warned Mantashe, adding, “You have got to reduce the prices — what we are saying is coal producers must contribute in ensuring that is actually addressed.”
The discussions will further involve what must be done to invigorate the mining industry, encourage growth and employment by clawing back investor trust and boosting foreign direct investment.
“We assure you that as part of our commitment to being a responsive department, our doors are always open for constructive inputs that can take the industry, and indeed the economy, forward.”
Mantashe said despite a negative first quarter growth where the economy contracted by 3.2%, the mining industry became the strongest performer in the second quarter, having grown by 14.4% – driven by iron ore, manganese and coal.
The economy experienced overall growth of 3.1%.
The Energy Minister singled out load shedding, electricity tariffs and a five-month protracted strike in the gold sector as reasons for the first quarter decline.
“It is for this reason that government has started engagements with coal producers and Independent Power Producers to discuss the state of the economy and the role of electricity in contributing to economic growth,” Mantashe said.
He said a reliable and secure supply of energy was crucial for the growth of the mining sector.
Mantashe said he is convinced that mining in South Africa remains an attractive mining investment destination.
“In 2018 alone, South Africa’s mining sector received over US $3.2 billion in investments, which created an estimated 5 000 jobs. We must continue to prospect and explore the world-class mineral deposits we have,” the Minister said.
Anglo American Chief Executive Mark Cutifani said, however, that SA’s economic trajectory remains unsustainable.
“We need to implement reforms urgently to create a better life for all and there’s no better place to start that than with the mining industry by creating a new paradigm that shifts us from merely sharing value to helping create enduring value for all.”
