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.]