Hon Chairperson, Deputy Minister Oliphant, hon Fred Gona, chairperson of the portfolio committee, hon members, may I begin by acknowledging the presence in the public gallery of 21 young learners from disadvantaged communities?
Chairperson, with your permission, I would like to request them to stand, so that hon members can see the young girls who are going to be the chief executive officers, CEOs, of the mining industry. I do not know where they put my kids. [Laughter.] Where are my children? [Applause.] Thank you very much. These are the future CEOs of the mining industry, the miners, and owners of the mining industry. When we talk about transformation in this industry, we are not talking about fronting; we are talking about building a sector which will reflect the future, where all of us will be treated equally. Hon members, beneficiaries of the ministerial programme, these are my children.
We stand at the cusp of a new era in South Africa, one which sees so clearly now the resurgence of mining as a central force. I am, therefore, honoured to present the budget of the department that is responsible for a sector so critical to our country's future.
The fact is that the ANC has placed the mineral and energy complex right at the centre of its socioeconomic and political agenda. This is an appropriately far-sighted step as the organisation and movement I represent marks its centenary, committed as it is with even more vigour to changing the lives of our people for the better.
Over the decades the nation has inexorably grown economically, despite the ravages of apartheid. We have now thrown off injustice and strengthened our economy, and in doing these things we have shown our true greatness as a nation, for the all the world to see. The resulting unity of spirit, rooted in our diversity, is what gives us real strength and drives us today in an advanced economy characterised by features of both the developed and underdeveloped worlds.
Today we are tabling a budget of R1,169 billion for the 2012-13 financial year, which represents an increase of R130 million from the previous budget of R1,039 billion. This increase is largely earmarked for research and development in the minerals and mining industry, through Mintek and the Council for Geoscience. My department will continue to manage this allocation in line with good financial management principles, as prescribed by the Public Finance Management Act, PFMA.
In the same spirit, I am pleased to report that my department utilised 99,1% of its allocated budget for the 2011-12 financial year. We have developed clear targets and action plans to address matters which arose out of the audit of the previous financial year.
In response to the call by the President with regard to tightening supply chain management practices, the department has begun reviewing its procurement policies and procedures to ensure that the acquisition of goods and services continues to be done in a manner that is fair, equitable, transparent, competitive, and cost-effective. Furthermore, the department has a process in place where, annually, all supply chain management practitioners sign a code of conduct. All bid committees have been appointed and are functioning effectively. The department has already begun the practice of vetting all supply chain management practitioners.
Underpinning it all is the fact that in 2011 the mining industry contributed 9,6% to our country's gross domestic product, GDP, more than 12% to total fixed capital formation, and more than 35% to our total export revenue, and employed 2,9% of the country's economically active population, which currently stands at more than half a million that are directly employed. Furthermore, the sector contributes significantly to the country's corporate tax. It is important to note that more than 60% of the country's energy and more than 90% of electricity generation are derived from activities associated with mining.
We are tabling this budget at a time when, influenced by our mining sector strategy, which is a product of the tripartism of the Mining Industry Growth Development and Employment Task Team, Migdett, we have an historic opportunity to rekindle the role of the mining and energy complex in our economy in a quest to eliminate the evil triplets of poverty, unemployment and inequality, which are stubbornly refusing to disappear from our landscape almost two decades after 1994.
The urgency of ensuring that we take advantage of the next wave of the commodity boom, which will surely come, was underscored when President Jacob Zuma announced massive infrastructure plans in his state of the nation address. The projects promise solid progress ahead for our nation.
We are committed to working together with our state institutions on action plans to optimise the sector's extractive capacity and to attract investment, as well as to maximise mining's job creation potential. The availability of more rail, port and water infrastructure necessary for mining will raise the level of mining, resulting in job creation and economic development in various commodities, including iron ore and manganese ore in the Northern Cape, and coal from the Witbank and Waterberg coalfields in Mpumalanga and Limpopo.
At the end of July my department will release the coal resources and reserves study, which has been led by the Council for Geoscience and which reveals that the Waterberg region hosts a significant share of our country's remaining coal reserves. This is the first comprehensive assessment of South Africa's coal resources and reserves since 1987.
The promulgation of the Mineral and Petroleum Resources Development Act, MPRDA, in 2004 introduced a policy of equal access to South Africa's mineral resources, which had previously been the exclusive preserve of one racial group. The democratic mineral dispensation introduced the policy of socioeconomic responsibility, which was to be achieved through the application of the black economic empowerment policy, ensuring that historically disadvantaged South Africans were brought into line and into the mainstream of mining.
However, challenges experienced in the implementation of these policies resulted in the need to review both the MPRDA and the Mine Health and Safety Act, the MHSA. The objectives of the review are as follows: to provide a detailed consultation process; to support the beneficiation strategy; to streamline the licensing processes to avoid delays and inefficiencies; to provide for enhanced punitive measures; to improve the current construct of the Act and remove ambiguities; and to provide clarity on the mining of associated minerals.
The review of the Act, however, does not seek to introduce any major policy shifts in respect of the exploration and exploitation of South Africa's mineral resources. Accordingly, in our efforts to harmonise our legislation, the creation of a synergy between the MPRDA and the MHSA is pivotal in ensuring that we create regulatory alignment.
Last year we launched our flagship on-line mining licence application system, which we referred to as Samrad, that is, the South African mineral resources administration system. I am pleased to report that after initial teething problems associated with implementing a ground-breaking system, we have now entered a stage where the system is rapidly gaining ground. To date, we have had over 3 500 applications that have been successfully lodged remotely through the department's website into a system designed to ensure that we achieve transparency, reduce the margin of error and ensure a consistent systematic approach to the evaluation and the eventual decisions regarding the awarding of rights.
Hon members will recall that on this occasion last year we reported on a process of cleaning up our data with the intention of ensuring that we migrated it into the new system. This has now been done. Working together with the mining industry, we are now giving priority to processing legitimate old-order rights applications that are in our system. We are committed to ensuring that these conversions yield positive results.
The department will continue to search for ways to upgrade the system to ensure that we remain a relevant, attractive and competitive mining jurisdiction. These improvements will include, amongst other things, the ability of the system to allow users ultimately to lodge various categories of reports online.
A fragmented regulatory and mining licensing system has long been identified as one of the impediments to investment and therefore the competitiveness of the South African mining industry. The current timeframes for obtaining a mining right, a water-use licence and environmental authorisation are not aligned, which results in prolonged processes and unnecessary delays. As a result, the Department of Mineral Resources and the Department of Water and Environmental Affairs are currently reviewing the regulatory framework in an effort to put in place an integrated and streamlined licensing system, which will not have a negative impact on the timeframes. It is envisaged that the streamlined licensing process will ensure compliance by right holders with the various pieces of legislation, create certainty in the regulatory framework, expedite the licensing process, and ultimately strengthen the constitutional imperative of security of tenure. This is in keeping with a principle of co-operative governance which dictates that government departments streamline their processes to promote seamless compliance with all relevant and applicable legislation.
Over and above this, I am pleased to announce that a task team reporting directly to the Minister of Water and Environmental Affairs and me will deal with the issues that we have just outlined.
Hon members will recall that we extended the moratorium in Mpumalanga owing to the complex nature of environmental challenges in that province. This culminated in over 41 rights that are located in Wakkerstroom and Chrissiesmeer being identified as those belonging to the category of environmentally sensitive areas. Consequently, we have taken action to prohibit mining in these areas, and those rights have been withdrawn.
At the Mining Indaba I announced measures we intend taking to address the issue of the rights that are either being revoked or lapsing. In February this year I published a notice in the Government Gazette inviting submissions with regard to our intention to introduce a new system in regard to the auctioning of rights. I would like to thank all those who made representations which, I must add, were not opposed to the system, but instead offered suggestions on how best we can address the technical aspects of the process itself. After due consideration, I have decided to issue a proclamation in the Government Gazette which will invite applications on revoked or lapsed rights. In this regard, rules that are aligned with the MPRDA will be clearly spelt out in the Gazette. I must indicate that the first round of bidding will take place before the end of June.
While reaping the fruits of transformation brought about by the MPRDA, we as a department are concerned about the current litigation which intends to reverse the gains of transformation in the mining industry. Therefore, we are watching this space closely, as we have to make sure that whatever happens in this country never ever takes us back in the transformation of our whole economy. [Applause.]
We call on the mining industry to implement fully all the provisions contained in the Scorecard of the Mining Charter. Audits that were conducted by my department have revealed that the level of compliance is not what it should be. There are, amongst other things, low levels of implementation of employment equity by some mining companies; low levels of women's representation at senior management level, especially in decision- making structures; fronting, especially by women, who do it on behalf of men; companies that change approved social labour plans without appropriate consent from the department and without consulting communities; suppliers of capital goods to the mining industry that are mostly reluctant to transfer skills to black economic empowerment, BEE, entities; and rampant use of expired BEE verification certificates, which forms part of fronting.
Procurement is one of the critical pillars of the Mining Charter. In this regard, I am concerned about the manner in which the entire procurement value chain is being handled in the mining industry. It is disturbing that procurement benefits are being reduced for BEE entities and are limited to mundane and peripheral issues, such as catering, cleaning and gardening services.
The social labour plans are an essential instrument in the hands of the democratic state to ensure that communities benefit from mining. It is in this area that we have identified gaps in the proper alignment of identified projects with integrated development plans, IDPs, and consultation with communities and municipalities. Sadly, this is one of the areas that constitute conflict between communities and mining companies. I therefore call on the mining industry to embrace and implement these imperatives without equivocation, as they will create harmony between the mining industry and communities.
We are keen to work with the mining industry in circumstances in which voluntary compliance is both a moral and an ethical issue. My department is continuing with the project of rehabilitating derelict and ownerless mines. Working together with Mintek, we have reached agreements with communities on the implementation of the Heuningvlei project whose scope has been finalised. In the year 2011-12, a total of 115 temporary jobs were created in the Northern Cape.
I must also indicate that we have reflected on the issue of ownerless and derelict mines, and we have employed the services of an actuary to help us quantify the total cost, and also how best we can ensure that we are able to implement a process of changing the land and ensuring user-friendly land. We are expecting the report at the end of this month.
In July last year Cabinet adopted the beneficiation strategy, which is central to our bid to ensure that the mining and energy complex yields concrete benefits. This will take the form of an implementation plan with clear actions for the identified commodity groups. It will, however, align the Act with the recently approved beneficiation policy to ensure that the mining industry contributes to local value addition by making available the requisite mineral inputs to the local benefactors. We as a country are also endowed with semi-precious stones, which we need to use to reconfigure the racial patterns of our jewellery industry. This, amongst other things, includes jewellery fabrication which seeks to increase beneficiation, thus leveraging maximum value from our mineral resources. At the end of this year we intend to host a jewellery summit, which is aimed at making sure we create opportunities for previously disadvantaged communities in South Africa.
My department will work with the State Diamond Trader to ensure that historically disadvantaged communities become part of the mainstream and contribute to economic growth and job creation. We want to revisit the State Diamond Trader. We are currently looking at the SA Diamond and Precious Metals Regulator, SADPMR, and the State Diamond Trader to make sure that we align them in a way that will ensure that we are able to deliver on this mandate.
In the same vein, the Kimberley Process elected South Africa as the deputy chairperson 2012, and we will assume the chair in 2013. As founding members we accept this honour, as it coincides with the 10th anniversary of this initiative, founded in the modest Tabernacle Church in Kimberley.
Subsequent to the Cabinet's decision to establish a state-owned mining company and the endorsement of the African Exploration Mining and Finance Corporations operating as a nucleus for this entity, Cabinet approved the model and the hiving off of the African Exploration Mining and Finance Corporation from the Central Energy Fund group of companies. We as a department have to ensure ...
Hon Minister, you have two minutes left.
I have seven minutes, Chair - five minutes from the end.
My department is working with the Department of Energy, the Central Energy Fund, and the Treasury in making sure that we create a standalone mining company which can compete with the rest of the industry. This crucial entity of the democratic state is about to undertake a second project which is now in the postfeasibility phase and will, upon operation, produce 4,6 million tonnes of coal per annum over 33 years, creating, currently, about 1 000 jobs.
I must bring to this House one of the most well-known current issues, which is that of shale gas. We are going to the Cabinet with a report with the intention of getting a final decision in order for us to be able to finalise this and give direction to the country.
The health and safety of mineworkers in the mining industry remain of the utmost importance to the Department of Mineral Resources. Workers in this industry have endured harsh working conditions ever since the birth of mining in South Africa, including living in overcrowded single-sex hostels. Even to this day, 18 years after 1994, this sector's commitment to the health and safety of both the workers and the communities resembles a curate's egg - good in parts, which means it is lacking overall. This must change. The inevitability of death, injury and disease must be rooted out.
In addressing poor health and safety issues at mines, we have identified the need to review the Mine Health and Safety Act. This review will strengthen enforcement provisions, reinforce penalties and ensure alignment and harmonisation with the MPRDA.
While we remain seized with these challenges, we, however, recognise some improvements in the health and safety of the environment.
We have indicated, in various debates and on public platforms, the extent to which these mining companies have performed when it comes to fatalities. While we are mindful that there is progress and a reduction in this area, it is a matter of concern to us when we still see some workers dying. I call upon the mining industry to once more commit to and internalise the value system of zero harm.
I am concerned about the safety of women in the mining industry. I am urging mining companies to implement measures aimed at protecting women miners. In this regard, I want to commend the National Union of Mineworkers for championing the just cause of safety for women miners.
As the Department of Mineral Resources, we remain determined to apply section 54 to ensure compliance. I want to state categorically that it is mischievous to regard section 54 as the only contributor to the loss of production. This flies in the face of the reality that mine operational challenges can contribute significantly to low production.
We have agreed with stakeholders to set up a task team comprising all relevant stakeholders to investigate the concerns raised in respect of the application of section 54. The task team has finalised its investigation and has made recommendations for consideration by other Migdett principals and me.
As I promised last year, we have split the North West regional office into two offices to ensure that it becomes efficient, especially in regard to the platinum in the Rustenburg area.
In November 2011 the Mine Health and Safety Council hosted a summit on the attainment of occupational health and safety milestones as set out in 2003. This includes all the occupational health and safety matters, that is, silicosis, noise-induced hearing loss, TB and HIV. The intention is to make sure that matters of health are prioritised in the mining industry. Also, during the 2011 summit a commitment was made to implement the Culture Transformation Framework. The stakeholders are also committed to establishing a centre of excellence to do research and capacity-building, and to facilitate research implementation. Stakeholders committed themselves to the aforementioned in order to improve the industry's health and safety record.
The department recently participated in South Africa's 2012 World TB Day commemoration in Carletonville, which was also addressed by Deputy President Motlanthe. I would like to commend Gold Fields for supporting this programme, and call on other mining companies to do likewise.
There is a great need to improve on the current skills capacity in the mining sector. To this end, the department is collaborating with the Department of Higher Education and Training in making sure that the Mining Qualifications Authority becomes relevant and also improves skills development.
In presenting this budget, I would like to stress that we are working round the clock to build the capacity that is necessary in this department in all areas, including in the vital legal section which is involved so regularly and exhaustively in litigation. We are building up our IT systems to improve efficiency and effectiveness. We are working on developing partnerships between government and the private sector. Finally, I want to thank the staff of the Department of Mineral Resources, led by the able and new - straight out of the box - Director-General Dr Ramontja, who has taken the proverbial bull by the horns and acquitted himself very well in his new role. [Applause.]
The same goes for the Deputy Minister, for his leadership and contribution to the second Budget Vote today, and for making sure that as we shape our administration, he makes it better. Thank you, Deputy Minister. [Applause.]
It is this same commendable spirit that must characterise the work of the department as we proceed to build a mining dispensation that is in harmony with the environment, and with the communities with whom we constantly seek to engage in consultation. Thank you, hon Chairperson, for your kindness. [Applause.]
Order! Thank you, hon Minister. That was a wise decision - you needed those seven minutes. [Laughter.]
Hon Chairperson, hon Minister of Mineral Resources Comrade Shabangu, hon Deputy Minister of Mineral Resources Comrade Oliphant, Ministers and Deputy Ministers here present, the leadership of organised labour, the leadership of organised business, officials of the Department of Mineral Resources led, as the Minister indicated, by the new, straight- out-of-the-box Director-General Dr Ramontja - a special welcome to you, sir - comrades and fellow South Africans, let me at the outset state that the ANC supports this Budget Vote. [Applause.]
We are basing our support of this budget on the theme, "Let there be change for the better in the mining industry." This theme is based on the fact that, since the discovery of minerals in the eighteenth century, citizens of this country who were classified as nonwhites, including black women, were prohibited by law from ownership and/or occupation of positions of power in the mining industry. Currently - 18 years into our democracy - not enough progress has been made to change this situation. This is a theme which is even more relevant to all stakeholders in the mining industry, particularly in our present-day circumstances.
Once more, I would like to dedicate this speech to the thousands of mineworkers who have perished over the many years of mining in this country, and continue to die in this industry. We are particularly concerned about the 123 fatalities reported last year, although we must also acknowledge that we have recorded an improvement, in that there were four fewer fatalities than in 2010. These figures, however, remain high. This Parliament extends its heartfelt and sincere condolences to the families of those in the mining industry that have departed and their loved ones.
Historically, South Africa's mineral industry, supported largely by gold, diamonds, coal and the platinum-group metals production, has made an important contribution to our economy. It has provided the impetus for the development of an extensive and efficient physical infrastructure, and has contributed greatly to the establishment of the country's secondary industries. Mining remains South Africa's largest industry in the primary economic sector, followed by agriculture.
Mining continues to be South Africa's principal earner of sought-after foreign exchange, although levels of earning continually decline. If we go back to the 1900s, we will find that mining directly generated about 41% of total exports, approximately the same as the fast growing manufactured goods export sector.
From the year 2007, real fixed investment in the mining sector improved by 14,8%. Unfortunately, this improvement was insufficient to compensate for the declines that had taken place in 2004 and 2005, with the result that production fell at that time by 1,5%, particularly in 2006.
We further recognise the fact that, notwithstanding the sometimes jittery mood of the investor community owing to some perceptions of uncertainty in our mining policy, that is far from the reality. This is because, when you analyse our minerals strategy, which we are continuing to refine, and when you reflect on our sustainable mining declaration, as agreed to through the Mining Industry Growth Development and Employment Task Team, Migdett, government's commitment to both attracting and retaining domestic and foreign direct investment in the mining industry is clear.
The portfolio committee will continue playing its expected role of addressing both the genuine concerns and these perceptions of the investor community. In this regard, the ruling party has opened the debate on the nature of state intervention in the mining industry, and these discussions will be taken further in the policy conference of the ruling party in June this year. We call upon all South Africans to participate. Listen, hon Papi! We call upon all South Africans to participate in this public discourse.
The mining industry continues to make a tangible contribution to the GDP, and the industry remains among the leading sectors when it comes to job creation. We are of the firm view that this industry, through its leadership in the Migdett and with guidance from the Ministry, will respond positively to the clarion call made by His Excellency the hon President, Jacob Zuma, in his state of the nation address early this year for the country to confront directly the triple challenges of unemployment, poverty and inequality - inequality, DA - in this country.
The New Growth Path gives clear direction as to how and where the mining industry should play its pivotal role in addressing the national objective of job creation. This is more urgent now than ever before, given the fact that the country is faced with a high level of unemployment, which is said to be currently at 25,2%.
It is important for us to remind this august House that the representatives of the people of this country, from all walks of life, converged on Kliptown in 1955, not for political grandstanding, not to pretend to identify with the poorest of the poor in this country, but to resolve national challenges that faced the country then, and some of those challenges still face the country now. At that real Congress of the People, hon Kganare, we the people of this country declared that, "The people shall share in the country's wealth." [Applause.]
The historical and current factors discussed above were made possible by the fact that South Africa is endowed with rich mineral resources. It has been confirmed by the internationally renowned financial institution known as Citigroup that this country is the world's richest in terms of mineral wealth. We are home to the most vital, most diverse mineral reserves in the world, which include the platinum group of metals, which also include gold, manganese, chromium, and many other mineral commodities, and which also include diamonds, titanium and bituminous coal.
This extensive mineral wealth is a common heritage of all South Africans. I repeat, it is a common heritage of all South Africans. Section 24(b)(iii) of the Constitution of this country guarantees everyone a right to:
... secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.
Through this section and other provisions in our Constitution we, as public representatives, are enjoined to ensure that benefits that accrue from the development of our minerals are enjoyed by all South Africans. Therefore, the question that we must pose in this august House is whether we all benefit equitably from this mineral wealth. That is a question that we must answer. [Interjections.]
To answer this question in a frank and objective manner, we need to examine a few socioeconomic developments that have a direct bearing on the current political conjuncture in our country. Eighteen years into our democracy South Africa continues to be faced with the serious challenge of rising levels of poverty. Political and economic analysts estimate that approximately 40% of South Africans are living in poverty, with approximately 15% of our population living in abject - abject! - poverty. [Interjections.]
As if this burden on our shoulders were not enough, South Africa has recently been declared in terms of the Gini coefficient to be the world leader in the arena of the most unequal societies, and that gap of inequality continues to increase. I bet you that if you test this theory in the Western Cape, you will find that the gap of inequality is huge - more than in any other place in the country. [Interjections.] This is despite our recognisable mineral wealth!
The huge backlogs in the delivery of housing, water and sanitation infrastructure, schools and other institutions of learning, health care facilities, etc, are a stark reminder of our immediate past. Given this picture, anybody in this august House who could give an affirmative answer to the question posed, of whether we all benefit equitably from our mineral wealth, would be pretending to be living in another country, or worse, would not be living on Planet Earth.
Therefore our patriotism, our love for and our commitment to our beloved country and the future of generations to come are being invoked at this juncture.
As a caring organisation, the ANC at its 2007 national Policy Conference and at the 2010 National General Council meeting responded to these challenges by resolving that the state must intervene in the mining industry through the establishment of a state-owned mining company, which the Minister has alluded to. In this regard, we want to applaud your swift actions, hon Minister, in that this mining company is already in operation, runs a coal mine and is poised to open other new mines - a clear indication that both domestic and foreign investment can play a welcome role in the mining industry.
The primary task of this state-owned mining company is to amass the necessary resources to enable this developmental state to address the huge socioeconomic backlogs. These actions and the promulgation of the Mineral and Petroleum Resources Development Act, the MPRDA, are in line with clause 3 of the Freedom Charter that discusses the sharing of the country's wealth:
The mineral wealth beneath the soil, the banks and the monopoly industry shall be transferred to the ownership of the people as a whole.
We will work closely with the department in further refining the end-state model, as the Minister indicated, of the state-owned mining company.
We are seriously concerned about the apparent slow progress in the transformation of the mining industry. Transformation in the mining industry is a legal imperative, as provided for in section 100 and other relevant sections of the MPRDA. Patterns of ownership are reportedly remaining skewed in favour of previously advantaged South Africans and both natural and juristic persons of foreign origin. The implementation of employment equity requirements is selectively undertaken, with reported disproportionate bias towards white women. Mining communities and new entrants into the mining industry remain excluded and marginalised.
Last year the portfolio committee conducted extensive oversight visits to various provinces and invited almost all stakeholders to public hearings in Parliament to check the compliance with mining legislation, the Mining Charter, mine health and safety laws and social and labour plans. We will invite these stakeholders back to Parliament in June this year for detailed feedback on our findings.
However, for now let me express our concern that during these oversight visits we stumbled on abject poverty, lack of compliance by a big number of mining companies, an unimpressive record of ownership patterns in the mining industry, and mining communities that do not derive benefits from the mining operations taking place in their areas. This situation is completely unsustainable and results in increased uprisings by the mining communities, a phenomenon that surely concerns the portfolio committee.
The portfolio committee discussed and unanimously adopted the Department of Mineral Resources' Strategic Plan and this Budget Vote. We are satisfied with the distribution of the available funds to the four programmes. We are particularly pleased by the attempts to build capacity within the department, especially with the establishment of the Compliance Inspectorate Unit which will, among other things, ensure compliance by companies which mining laws and ensure that social and labour plans are implemented. However, both the department and the National Treasury need to pay more attention to capacitating our research and development institutions, such as Mintek and the Council for Geoscience.
In conclusion, we would also like to add to what the Minister has raised in regard to the legal challenges that ...
Hon member, I'm sorry, but your time has expired.
Oh, thank you very much. [Applause.]
Madam Chair, to look at South Africa's mineral resources is to see one fact of overwhelming significance to which the hon Gona has already drawn our attention. We have more value beneath our soil in this country than any other country in the world. It is valued at $2,5 trillion. That is one competitive advantage that South Africa has. That is one advantage that should allow us to create hundreds of thousands of jobs and boost economic growth.
The mining equation is quite simple: to get wealth out of the ground in such a way as to create the greatest number of jobs and provide the greatest benefit to the fiscus in such a way that it has the greatest number of economic spin-offs for the greatest number of people. And all this must be done in such a way that our resources of water and land are not destroyed.
So, this fact of our mineral wealth must be followed by one big question: Why is our mining industry shrinking? Why is the South African mining industry smaller today than it was in 1994?
If the decline is measured in how much mining adds to the GDP, our industry went down by one percentage point between 2001 and 2008. [Interjections.] In the rest of the world's mining industries over the same period, mining grew by 5% a year. [Interjections.] The news gets worse. In three of the four quarters last year production fell. In January, mining production was down 4,9% year on year. In February, it was down by 14,5%. In the month of February we had our lowest mining output in 50 years. Harmony announced yesterday that for the nine months ending at the end of March its production was down by 18%, and so it goes on. Senior people in major companies agree that mining is in a shambles.
According to Canada's Fraser Institute, which issues an annual report card on government mining policies, South Africa this year is the 54th most attractive destination for mining investment out of 93 countries measured. So, 53 other countries are seen as better places to put your money if you want to invest in mining. [Interjections.] Burkina Faso, Mali and Zambia are all seen as more attractive than we are. Are we surprised that South Africa's rate of growth in new mining investment is the lowest of any significant mining country?
We have heard that government is committed to attracting investment. Well, that may be clear to government, but it does not seem to be clear to anybody else.
Now, all this isn't some academic exercise. A decline in the mining industry means that people lose their jobs. Statistics SA says that 179 000 people lost jobs in South African mining between 2001 and 2011. That is a 36% drop. Every decline in production means there will be job losses sooner or later. According to yesterday's Adcorp figures, employment fell sharply in mining, down 11,8% year on year 11,8%!
It is incumbent on this government - urgently - to review this situation, find out what is causing the declines in the industry and address them. Now, if that 5% growth, which was the world average, applied to us, more than 300 000 jobs would have been created. That is what mismanagement of this industry has cost us.
So, what is the problem? [Interjections.] Industry specialists broadly agree that the legislation has not been a success. Regulation is unclear and badly implemented. The Minister has vast discretion, which leads to a lack of certainty. Uncertainty means risk and investors hate risks. That is made worse by abuses of licensing, like the ICT Kumba debacle, which clearly involved complicity by at least some officials of the Department of Mineral Resources. Our old enemy cronyism reared its head there, and if you want to see how badly cronyism affects workers, then take a look at Aurora. [Interjections.] There, there was protection for cronies, and workers lost their jobs and starved. [Interjections.] You are denying it happened?
Then there has been talk of nationalisation which, incidentally, the Congress of SA Trade Unions, Cosatu, supported and, as far as I am aware, still supports, and thus prospective investors are almost guaranteed to go elsewhere.
Then there are mining and prospecting licence applications which are governed by what can only be described as administrative paralysis. There are inadequate legal resources deployed here and the result is a long process. Investors need a quick decision, either "Yes" or "No".
There is also the Mining Charter, which is so unclear that the industry and the government cannot even agree on the extent to which it is being implemented. This is something that has to be got right. We can't have a situation in which everybody has a different idea of the meaning. Instead of a new charter and rumoured stiffer targets, which would be another disincentive to investment, wouldn't it be wiser to put out proper guidelines on how the charter should be interpreted and then agree with the industry on a common reporting protocol? It's not hard.
The difference between certainty and uncertainty is the difference between investment and no investment; and the difference between unemployment and unemployment is the difference, in the end, between poverty and wealth.
The National Planning Commission says that constraints to growth in mining must be addressed by ensuring certainty in respect of property rights and a predictable, competitive and stable regulatory framework. I fully agree. The Minister has indicated that the framework will be improved, but it is taking too long. We suspect that the government is waiting for direction from ANC conferences happening this year and, while we wait for those to happen, the industry is on hold, production is plunging and jobs are under threat. Once again, party has been put before country.
Mining is a giant in our economy. In South Africa's past it was a giant monster. It embodied some of the worst aspects of apartheid: migrant labour, repression and unsafe working conditions. It was an industry where workers did not count.
Things have changed. Things have changed. [Interjections.]
... [Inaudible.] ... for the white man.
That's a very interesting comment. If I have time, I will take it up later. Most mining companies have had a paradigm shift in their attitudes, and are advised by our new democracy and pressured by establishment ranging from government to their own shareholders. [Interjections.]
I have a point of order, Madam Chair.
Hon member, take your seat.
Madam, I submit that the comment made by the hon member about the white man is racist and unparliamentary. Would you please ask her to withdraw it? [Interjections.]
Could you point out the hon member?
[Inaudible.] ... was the hon Minister.
Yes, it is the member with the yellow blouse that made the comment ... [Interjections.] ... and the Minister. I saw them. [Interjections.]
Hon members, order, please! [Interjections.] Order, please, hon members!
I stand corrected. It's the Minister. [Interjections.]
Could you please allow me to consider this, and I'll come back to the House? Thank you. Continue, hon Lorimer.
Thank you, Madam Chair. Government needs to acknowledge that there has been a paradigm shift in the attitudes of mining companies. It's no longer helpful to see mining as a monster; rather, it should be seen as a giant that can work for us all ... [Interjections.]
Hon members, you are drowning out the speaker. Can we give him a hearing? Continue.
It would be seen as a giant that can work for us all and produce the employment and growth that we seek.
The legislation and the Mining Charter have caught mining companies in a web of rules that continue to raise the costs of and the difficulties in mining successfully. One major mining company tells me that it has had to employ 20 more people at head office simply to deal with compliance. That is a high-level issue. Twenty highly skilled people do not come cheaply. All of that adds to the cost of mining in this country. All of it is a disincentive.
There's an argument that one hears in government circles. That argument is that we have so many minerals that mining investors will have to come to us and mine on our terms, so we don't need to worry about attracting them. The poverty of that argument is made clear by the unemployment statistics that I have already mentioned. People's jobs are at risk. We are missing opportunities for poverty relief, which will not wait. We need to act now.
Let's look at some specifics, starting with one of the major reasons cited by mining companies for the current fall in production. To begin with, there are safety stoppages in terms of section 54 of the Mine Health and Safety Act. The Chair of AngloGold Ashanti, Tito Mboweni, has described these stoppages as a sledgehammer. Miners everywhere complain that whole mines are closed for relatively small infractions. For example, if the tail- light of a vehicle operating on the surface is broken, the whole mine is shut down for 48 hours. [Interjections.] I assure you it is. Another example is if the fire extinguishers are past their expiry date. Now, rather than issue a section 53 instruction, which would give the mine some hours to comply, the whole mine is closed down and two days of production are lost. These are factual cases. I repeat, these are factual cases.
The problem is not section 54 in itself, but the way it is applied through the guideline that strips inspectors of discretion. That's what is meant by a sledgehammer.
Now I can predict a response, or one of them. One of them is to use this as a political football and say, "What about the workers?" Well, what about the workers indeed? Let's regulate efficiently rather than indiscriminately, because those who allow indiscriminate regulation will cost workers jobs and their livelihoods, as has already happened to so many. We can't continue to use this issue as a political football.
Our department is responding. We have heard some of that today. It says it is working more closely and constructively with mine management, but is this happening fast enough, Minister?
As this so directly affects production, we'd like to see a lot more money from this budget put into the retention and hiring of inspectors. Early and frequent inspections, where the inspectors can use reasonable discretion, would mean fewer closures and less lost production. We are aware of the difficulties in this area, but we think this is such a key thing that it merits more vigorous intervention.
There's much talk of beneficiation as the new way in which we will extract more money from the mining industry. As good as it sounds, this is unfortunately unlikely to be the easy solution it is portrayed to be.
For one, beneficiation operations generally demand a lot of electricity. That's one thing we don't have. One company wanted to build a chrome smelter near Rustenburg. They went to Eskom and asked if there would be power available. Eskom said yes, from 2017. That company is building the smelter, but it is building it in China. [Interjections.]
Efforts to beneficiate through the gold and diamond jewellery industry have been an utter failure. Our cutting and polishing industry is a shadow of what it used to be. In the late 1990s there were 4 500 people in this industry, but today there are fewer than 700. [Interjections.]
The State Diamond Trader is supposed to promote local beneficiation. That aim is clearly not being attained. Rumour in the industry is that the State Diamond Trader is supplying only three clients with the majority of its sales. A few people are benefiting and the industry is failing. Government should not be involved in this business. We think the State Diamond Trader has failed manifestly and it should be closed. [Interjections.]
Now, we have heard that this government's slogan is, "Let there be change" - I couldn't agree more. But make them the right changes, so that you not only save jobs, but create new ones. The most important thing the state needs to change is its attitude towards mining. The Minister usually says the right thing, with a very notable exception today, but investors are not the only ones to be unconvinced. [Laughter.]
When the legislation and regulations are reviewed, and that should happen soon, it should be with an eye to removing the shackles that bind the industry, to set it free to do what it does best, that is, to mine, and not to apply social policy or beneficiate. Government must move away from trying to make mining companies do what they are not good at. It must listen to them. If the mining industry is treated sensibly and as a partner, and not as an adversary, it could turn into the engine that drives employment and economic growth; it could turn from a monster into our economic saviour. [Applause.]
Chairperson, Minister, Deputy Minister, officials and guests, this is my maiden speech on this department. I would like to state upfront that Cope fully supports the aim of the department to promote and regulate the mining sector for transformation, growth and development. It is right and proper that all South Africans derive sustainable benefits from the country's wealth.
However, Imperial Crown Trading, ICT, used falsified copies of title deeds of farms on which mineral rights had been awarded and got the then deputy director-general for the regulation of mineral resources to make the award to ICT, despite senior officials' specifically asking him to reject it. More importantly, the prescribed application form was not even included at the time of the lodgment of the papers. This scandalous behaviour highlights a serious problem that is costing the country billions of rands in investments. Cope would really like to know if there are any consequences for those, like the then deputy director-general for the regulation of mineral resources, who blatantly subvert ... [Interjections.]
Hon members! Hon member, take your seat. Hon member, you cannot sit beside or behind a speaker and start making a noise as he is delivering his maiden speech. Could you welcome him in this House? [Interjections.] Over to you, hon member.
Including you, hon members, as well. [Interjections.]
Cope would really like to know if there are any consequences for those, like the then deputy director-general for the regulation of mineral resources, who blatantly subvert the legal order and bring the state into such disrepute. Is the department still determined to appoint cadres to top positions who seek to enrich themselves and their political allies, leaving chaos in their wake? [Interjections.] Minister ... [Interjections.] You wish! Minister, substantial improvements in the quality and integrity of mining licence applications are a positive start. Stringent monitoring must be a two-way process. It must put the spotlight on mining companies and on government officials. If corruption is internalised, the whole process of monitoring is corrupted.
The Broad-Based Socioeconomic Empowerment charter for the South African mining industry must work in the direct interest of communities and must be aimed at skills development and entrepreneurship promotion.
The rehabilitation of the mine should be an ongoing process during the entire life of a mine, and not something that is contemplated near its end.
Export parity pricing is another matter of the utmost importance. The communities around our mines should be able to set up businesses to beneficiate the minerals and ore in close proximity to the mines. Prices for such enterprises would have to be cheaper than for importers elsewhere, considering that transport, storage, insurance and other costs were not incurred.
The pricing of minerals and ore to communities nearer mines should receive the highest priority so that people can have a real stake in the mining that is taking place in their midst. A gold mining area without a thriving jewellery manufacturing satellite is like a vineyard without wine cellars, or a cane field without a sugar mill. It is the same for iron mining and all other forms of mining. The product of an area, whether it is on or under the ground, should define the nature of its economy. After all, the beneficiation strategy for minerals adopted by Cabinet in 2011 seeks to add value to minerals to facilitate economic diversification and boost local value addition.
We agree that there is a plan, but on occasions such as this the Minister needs to commit to the implementation of the plans. After all, Parliament is making resources available, not for endless planning superimposed on more planning, but rather for fast and furious execution. That is what we want to see and, indeed, we in Cope would like to see that happening now.
I also wish to ascertain from the Minister whether the social and labour plans, as well as the programme for communities to access resource information, have been implemented and whether they have actively involved communities around the mines. If so, what can the hon Minister tell Parliament regarding this programme of the department?
The department has been running five pilot value chain projects. We in Cope believe that South Africans should be invited to create public companies to establish sizeable plants with adequate capital to make the pilot projects feasible enterprises capable of large-scale labour absorption.
The time has come for government to broaden its vision and include all South Africans, regardless of party affiliation, in becoming involved in such projects. The government must stop operating as a closed shop and stop seeking a slice of every national development for itself. Self- gratification must give way to national prerogatives for the common good. With 75 000 jobs lost in the first quarter of this year and nearly 4 million people, at least, without work, the situation is bleak. Therefore government's approach to growth and development must cease being self- centred and self-promoting. Opportunities must be thrown open.
In conclusion, on the question of nationalisation: Yes! Yes! [Laughter.] It is important that the Tripartite Alliance come to a common understanding so that clarity is obtained in the long term. Countries such as Cuba, Venezuela, Ecuador, Bolivia, Guatemala and Argentina did not help their economies with nationalisation, in case you don't know that. On the other hand, Brazil, Chile, Mexico and Peru have grown their respective economies by taking a different tack. Ambivalence on the question will deter investment in mining and it needs to be understood that our ageing mines need vast amounts of capital to mine deeper and deeper.
While we wish to support this budget, we would really like the Minister to do what the Minister of Public Works did in Parliament: lay bare the problems, warts and all, so that collectively we can progress and do what we have solemnly sworn to do, create economic growth and stimulate job creation. In nine elections in Europe recently changes have occurred. They have occurred in government because the people were no longer willing to live on promises. They wanted action, and so do the people of South Africa. I thank you. [Applause.]
Hon Chairperson, South Africa's vast wealth of minerals and diamonds is a boon too often repeated amongst other countries of the world. As a result thereof our economy is greatly bolstered by a highly developed mining industry with all the concomitant socioeconomic spin-offs.
We must, therefore, do everything within our power to explore this advantage and maximise its potential benefits. We have considerable experience of mining at great depth, and let us not forget that we played a significant role in the rescue of the 700 miners trapped underground in Chile.
The department has handled its budget conscientiously, acknowledging that there has been a rollover of R9,5 million. This amount is within the 5% limit allowed. We must accept that the department has planned well. The IFP feels that there are, however, areas at which we must take a closer look in order to derive the full benefit from our natural resources.
With regard to beneficiation, we have been discussing this subject for a while and I believe that we have not come to a common understanding thereof. Yes, the mining houses have beneficiated in the initial stages. We are, however, also calling for more attention to be paid to beneficiation for finished products, as this will make a way to gain the full benefits of the raw materials. I recognise that this constitutes a major step forward. However, it is a step which must be taken. So, why not take it sooner rather than later?
When it comes to mine health and safety, the workers' safety remains a paramount concern in this industry, as there are still far too many accidents and fatalities that occur, which could have been avoided if the necessary safety equipment and procedures had been in place. Mining inspectors are very necessary and have been doing a great job thus far, but they are becoming an endangered species, as they are continually being lured into the private sector by higher salary offers. This is a challenge that requires urgently to be addressed, as the work done by the inspectors contributes greatly to overall safety and to a reduction in the deaths, ill health and serious injuries that currently plague the industry.
Illegal mining is proving to be most difficult to contain. It is not only illegal, but also extremely dangerous for those involved in such practices. The market for those illegal products must be thoroughly investigated by the SA Police Service, and the buyers thereof exposed and prosecuted to the fullest extent of our law.
On the Mining Qualifications Authority, the IFP believes that this is a good programme and therefore supports its promotion, as it plays an important role in the development and promotion of much needed skills.
I have raised the subject of small-scale mining on many occasions. Small- scale mining can and does play an important role in uplifting communities and job creation. The small-scale mining sector is faced with many challenges, such as finance and skills. It is common knowledge that without a bankable document the finance houses will never entertain any request for financial assistance. Therefore, we are faced with the challenge of looking at changing the way in which finance is granted and risk assessed - that is if we are serious about development of this sector.
It is encouraging, Minister, to have, as you say, your children here. That is promising.
Fronting is a serious issue, especially when it comes to historically disadvantaged South Africans. This is the only way in which they can be involved in the industry. It is, indeed, very sad. In most cases the person who is fronting ends up deprived of his or her only assets and becomes, if very lucky, a minority shareholder.
Regarding the Karoo gas project, I am hoping that the department is in a position to share some additional information about this project. All I know about it is what is available in the newspapers. The portfolio committee must be better informed.
In conclusion, the IFP believes that everything in our power must be done to rehabilitate ownerless and derelict mines, as these can be of great socioeconomic benefit to our country and people. The acid mine drainage problem must also be prioritised and dealt with as a matter of the utmost urgency, before it causes irreparable harm to the environment.
The IFP hopes that we can all work towards a South Africa in which reduced carbon emissions and sustainable, green environmental policy are the order of the day. Our future generations deserve nothing less.
The IFP supports the Budget Vote. I thank you. [Applause.]
Chair, hon Minister and Deputy Minister, the chairperson of the portfolio committee, Members of Parliament, officials of the Department of Mineral Resources, and all guests ... ndiyanibulisa. [... I greet you.]
Mine health and safety matters are the most important issues which should be looked into in the mining industry in order to stress the need for improved health, which will result in a healthy mining society and industry. The high statistics are now gradually coming down and improving, which clearly shows that the measures of the Mine Health and Safety Inspectorate have been implemented.
The natural shaking or vibrating of the earth results in rock falls or collapses, and these continue to result in fatalities, although through the establishment of the Mine Health and Safety Inspectorate, there is a clear indication of a drop in injuries amongst miners. Similarly, it has been found that there has been a 26% improvement in falls of ground fatalities associated with seismic activity. In fact, over the past two years, fewer miners have died as a result of seismicity. In 2010, 48 miners died, compared to 65 in 2009. However, overall safety milestones set in 2003 indicate that there is still a lot of work to do. As we can see, the mining industry zero-rate target of fatalities by 2013 in the platinum and gold sectors is yet to be achieved.
The informal settlements surrounding mines, and the environment, are being affected by acid mine drainage from mine residue and waste dumps. The study by the Bench Marks Foundation for Southern Africa found that nothing is said by the mines in any of their reports on the proximity of villages and informal settlements to major waste facilities, such as slimes dams and tailings dams. The mines are silent on this and on the loss of productive land to waste facilities.
The report also notes that owing to the increasing number of platinum smelters in the area, carbon dioxide and sulphur dioxide emissions have increased, resulting in a dramatic increase in respiratory infections. Apart from the immediate harmful impact on the community, this increase in emissions will eventually give rise to acid rain. Some farmers in the area are already complaining that the dust and emissions from the mines and smelters are having an impact on their citrus crops.
This next issue remains my biggest area of concern. Since the days when my own father was a mine worker ... kwakusoloko kuthethwa ngetafile ewileyo. [... there has always been the excuse of falling rocks.]
Allow me to repeat what I always say when I meet with the department.
Ngexesha leli litye letafile liwayo elibizwa ngokuba yi-fall of rock ngesiNgesi, awayesixelela ngalo utata, ndandiseyintombazana. Namhlanje ndingumakhulu, sisathetha ngale tafile iwayo. [Kwaqhwatywa.]
Ibuhlungu nyhani le nto kum kwaye yenza ukuba ndivakalelwe. Ngokuqinisekileyo ootata bayathandaza xa bevuka besiya kusebenza emigodini kuba abazi ukuba ngubani oza kubuya ingubani ongazukubuya. Isebe liyasebenza kodwa lithabatha ixesha elide kuba xa kungoku bekumele ukuba kuyaziwa ukuba kwenziwa ntoni.
Noxa kunjalo mandilincome isebe kuba ... (Translation of isiXhosa paragraphs follows.)
[When my father used to tell us about the falling rocks, I was still a young girl. Today I am a grandmother, but we are still talking about the falling rocks. [Applause.]
This is very painful and disturbing to me. These men must certainly pray when they get up to go to the mines, because they do not know who will and who will not return. The department is working on it, but it is taking too long, because by now we are supposed to know what is being done.
Be that as it may, let me commend the department: ...]
... at least they are doing something. There is a safety net ... ekucaca ukuba ikhona kwaye nixakeke yiyo. Enye ke andiyazi nokuba niyibiza ngokuba yi-approximity device okanye yi-proximity device, kodwa ... [... that they are busy with. There is also another measure which they call the approximity or proximity device, but ...]
... there is a detector. This makes me happy. At least ...
... iza kufana nezi moto sezinesixhobo esithi xa zibuya umva senze isikhalo esithetha ukuba uza kutshayisa. Esi sixhobo ke siza kuba njalo. [... this detector is going to work like a sensor which is fitted in cars to warn the driver. That is how this detector is going to work.] [Applause.]
This, then, is a concern. Senditshilo [I have already said so] The family of a miner would be worried about their father's not coming home because he could be killed by a rock fall. Really, this is a concern.
We continue to talk thus, even in this modern, technologically advanced mining industry. With the billions of rands that the mining industry generates, surely the best practice from other countries can be gained and researched in our own country in order to move towards a zero tolerance of fatalities?
Ningandithumela nam kumanye amazwe ndiye kukhangela le nto! [You can send me to other countries to do research on it!]
The latest reports indicate that mining fatalities declined from 168 in 2010, to 127 in 2011, which is still not good enough. There should not be a single miner who dies due to a mine accident; hence the appreciation of the Mine Health and Safety Council initiative on their road to a zero harm journey in terms of which a holistic involvement is assisting in the speedy achievement of a tripartite approach.
My biggest compliment is for the establishment of the mining industry's HIV/Aids and TB Council, which is now able to give specific attention to the concerns around these diseases in the Department of Mineral Resources and the Mine Health and Safety Directorate. Thank you. [Time expired.] [Applause.]
Chairperson, hon Minister Shabangu, former Minister Buyelwa Sonjica, who is seated in the gallery, Deputy Minister Thabethe, chairperson Gona and members of the portfolio committee, hon members, Kgosi Pilane wa Bakgatla in the gallery - we recognise you, sir, and all the royalty that I might not have seen - director-general and senior officials of the department, senior executives of the state-owned enterprises and the private sector leadership that are here, distinguished guests, and ladies and gentlemen, I do indeed feel honoured to have the opportunity to address this Chamber on the occasion of our Budget Vote debate today. Let me also pay tribute to the three departed comrades and members of the National Assembly: Comrades Roy Padayachie, Sicelo Shiceka and Florence Nyanda.
I am particularly mindful of the significance of this day, 10 May, a day that symbolises the tipping point of our sociopolitical and economic history. On this day in 1994 Tata Madiba was inaugurated as the first President of the country's new democratic dispensation.
At once President Mandela became a beacon of hope for hundreds of millions of people the world over. Quite deservedly, the inauguration of the Presidency of this long-time freedom fighter marked a new beginning in so many spheres of life on this planet. For sociopolitical scientists and activists he became the embodiment of a fundamental yet peaceful revolution, demonstrating a practical alternative to confrontation, war and destruction. This was not only important for our people in South Africa, but also relevant for our continent with its many civil wars raging at the time. Beyond the continent of Africa, President Mandela and his achievements ushered in new options for the masses in Europe, the Middle East and the Americas.
His personal philosophy, enhanced by the ANC leadership in general, has already made its mark on the history of our nation. All of us in South Africa live with it every day. Even when we are too busy to acknowledge it or are oblivious of it, we still live with it every day. For generations to come, Tata Madiba and his legacy will live with us, pulsating like the lifeblood of our nation, propelling our constitutional democracy.
We salute you, President, and all the other outstanding 12 presidents and leaders of the ANC, from president Dube to president Zuma. Once more, happy centenary to our glorious movement, the ANC. [Applause.]
Closer to the subject of our discussion today, Tata Madiba was also a mineworker once upon a time. So, for us in the mining sector he has assumed a special place in our hearts, and his association with our sector evokes unique and proud feelings. We cherish his close and personal affiliation. Lest we forget, Madiba still remains the life president of the National Union of Mineworkers, NUM.
Apart from the significance of this day, this year also marks the 30th anniversary of the establishment of the NUM. We can congratulate the past and the present leadership of the NUM on their achievements.
As we celebrate this anniversary, let me, as an ex-mineworker and an activist, mark yet another critical process of our modern history. The formation of the NUM and its history have become synonymous with South Africa's struggle to reverse the injustices of the past and to correct systemic inequalities for the determined, but systematic, normalisation of our socioeconomic and political landscape. For many decades, the plight of South Africa's mineworkers was an embodiment of the tyranny of colonialism, apartheid and crass capitalism. The birth of the NUM, therefore, was the start of the journey towards the transformation of this iniquitous labour- capital dispensation in the mining sector.
We in this country have yet to properly recognise the significant role played by mineworkers in the development of our country and its economy, and in the struggle towards the democracy that we enjoy today.
This year also marks another anniversary, namely the 10th year of the Mineral and Petroleum Resources Development Act, the MPRDA. This was a landmark piece of legislation. With the stroke of a pen, the MPRDA transferred the trusteeship of our natural endowment of all mineral and petroleum resources to the state. This nationalisation of the trusteeship of a major public interest was a critical step towards the normalisation of our political economic landscape.
The amendments to the MPRDA are vital as we anticipate the next century of mining activities in our country. It is by now common knowledge that South Africa's estimated in situ value of mineral endowment exceeds US$3,5 trillion. These resources can be economically mined for the next 100 years. As such, we need to optimise the management of mineral resource exploitation to benefit all South Africans and to contribute meaningfully towards addressing the development challenges of our country. It is therefore our collective obligation to ensure that this considerable wealth is utilised to generate socioeconomic benefits and integrated development for our nation. To do this, we need to draw lessons from our past century of mining, to avoid the undesirable consequences, and to ensure a mining industry that is socially progressive, environmentally sustainable and economically competitive.
To assist the industry to move towards the new paradigm and to ensure that our mining activities do not compromise the ability of future generations to meet their needs, we have recognised the imperative of a collaborative and consultative platform for moving the industry forward. We have established the Mining Industry Growth and Development Task Team, Migdett, which provides a framework for the exchange of views, creating convergence of action plans. This has proved useful and constructive in avoiding job losses in the recent past, and will be critical in transforming our mining industry systematically and continually.
If South Africa is to succeed in extracting maximum benefit from its mineral endowment, it must do things differently. The operative word is "differently". In this regard, the key behavioural change that needs to be prioritised is with regard to the health and safety of the workers. South Africa's mining in many commodities is going deeper and deeper underground every year. The trade-off between safety and short-term productivity and profitability is becoming more and more pressing. Conventionally, the safety of the workforce has received secondary attention - short-term profit has been put first. This paradigm needs urgent and ongoing attention.
At the same time, we cannot continue to mine and export ore and other raw materials for processing elsewhere, as this severely limits the benefits we can derive from the exploitation of our resources. There is therefore a need to increase value addition in our minerals before they are exported, in line with the government's new mineral beneficiation and industrialisation priorities.
The value addition or local beneficiation proposition is a natural progression from a resource-based economy to a secondary and tertiary economy, which is consistent with the path of development followed by the other developed economies in the world. Moreover, this will present enormous investment opportunities in the country for both South African and foreign investors.
In the recent past there has been a great deal of debate and controversy about mineral beneficiation. In the process, much emphasis has been placed on narrow down-stream opportunities for mineral beneficiation. As part of our mind-set change, we need to re-examine notions of beneficiation, and broaden our definition in line with the realities of socioeconomic and financial benefits that both upstream and downstream opportunities offer in each and every commodity. The history of socioeconomic development in resource-rich countries, such as the USA, Brazil, Australia, China and Russia, and including South Africa itself, demonstrates clearly that industrialisation and mineral beneficiation are inseparable. The emergence of national utilities, such as Eskom, water boards, Transnet with its railways and harbour logistics, and the petrochemical and explosives industries, was in a large part due to the mining industry. In effect, then, these were the clear opportunities for industrialisation, and hence socioeconomic benefits arising from the development and expansion of the mining sector.
In much the same way today, South Africa enjoys a considerable range of opportunities for integrating our mineral beneficiation and industrialisation programme in order to enhance the pace of social development and economic growth. Such an approach to mineral beneficiation and industrialisation calls for a much higher ...
Hon Deputy Minister, I'm sorry, but your time has expired.
Oh, I'm sorry. Thank you, Minister, for your leadership. [Applause.]