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 ...