How did the pandemic impact the South African mining industry?

The impact of the pandemic on the South African mining industry was significant. In April 2020, the country entered a challenging lockdown period, during which most mines were shut down for five weeks. Only essential industries, including coal operations supplying Eskom and synfuel producers, were allowed to continue operating. The mining industry adapted by implementing precautionary measures even before the official lockdown. The industry developed a risk-based approach and established Standard Operating Procedures to ensure the safety of workers. This proactive approach enabled the industry to work closely with government and labor unions, allowing for the gradual ramp-up of operations while adhering to health and safety guidelines. Despite the challenges, the mining industry made a substantial contribution to the national fiscus in 2020, supported by strong commodity prices.

What are some of the most significant mining projects to look out for in South Africa?

The mining industry in South Africa is focusing on several significant projects. The COVID-19 pandemic has stimulated unprecedented levels of engagement between the Department of Mineral Resources and Energy (DMRE) and the industry. Six task teams have been established to address various aspects, including exploration, policy and regulatory frameworks, infrastructure constraints, local procurement and beneficiation, improving the operational environment, and resolving outstanding mining licenses and rights.

Addressing the backlog of outstanding mining rights and authorizations is a priority. A survey conducted among Minerals Council member companies revealed that approximately 170 mining rights and authorizations worth about R30 billion are pending. The Minerals Council is working with the DMRE Minister and the Director General to find solutions and revive the mining industry. Progress is being made through the establishment of a one-stop shop team to address these issues.

The DMRE is also implementing a new and transparent exploration cadastre system to enhance access to exploration information and streamline the permitting process. This is crucial to unlock the vast mineral resource potential in South Africa, as the country currently accounts for only a small percentage of global exploration expenditure.

Energy is another area of focus. South Africa faces challenges with its energy utility, Eskom. However, President Ramaphosa’s announcement in June 2021 allowing private companies to fund and construct embedded generation projects up to 100 MW is a positive step towards addressing the energy crisis.

Efforts are also being made to address infrastructural constraints, such as port and rail capacity, to improve transportation efficiency.

Furthermore, the Minerals Council is actively collaborating with local and international experts to drive innovation, modernization, and the humanization of the industry.

What are the main concerns with the current Mining Charter?

The 2018 Mining Charter represents a significant improvement compared to the previous proposal. However, there are still some concerns regarding certain aspects.

One concern is related to the recognition of continuing consequences. According to the 2018 charter, when there is a sale or change of ownership, the black economic empowerment transaction needs to be redone. The industry advocates for solid certainty and stability in legislation to provide investors with confidence and encourage investment.

The second area of concern revolves around the implementation of local content requirements for mining equipment. Large-scale trucks used in mining operations, for example, have limitations in terms of local content. The industry believes that the basis for implementing local content policies needs further examination to ensure it is sound and practical.

Overall, achieving a balance between transformation goals and maintaining a conducive investment environment is crucial for the sustainable growth of the mining industry.