How did the pandemic impact the South African mining industry?

We developed a risk-based approach in dealing with Covid, and our Standard Operating Procedures formed the basis of the guidance that was subsequently regulated by the DMRE. Having already put in substantial non-medical interventions – social distancing, wearing of masks, sanitising, as well as education - even before the first lockdown took place, gave the industry a significant head start on how to operate and reopen following the lock-down. As a result, we were able to work closely with the Minister of Mineral Resources and Energy and labour unions in ensuring that the industry could ramp up operations even while many other sectors could not.

The pandemic undoubtedly impacted the mining industry as it did many other sectors of the South African economy, but the impact was mitigated to some degree by our ability to restart and quickly ramp up operations. This in turn meant that the mining industry was able to make a substantial and better-than-expected contribution to the national fiscus in 2020. This was, of course, supported by strong commodity prices.

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

There is a clear and overriding need to grow the industry and, to do that, we need to improve its global competitiveness. Creating regulatory certainty is critical for investors.

Covid has catalysed unprecedented levels of engagement, especially between the DMRE and the industry. Six task teams were established between the DMRE and Minerals Council to focus on exploration, the policy and regulatory framework, infrastructure constraints, local procurement and beneficiation, improving the operational environment including dealing with crime, a one-stop-shop to unblock outstanding mining licenses, and rights and a communications task team.

A survey of Minerals Council member companies conducted in December 2020 indicated that they have about 170 outstanding mining rights, prospecting rights, Section11 change of ownerships, renewals and environmental authorisations that are holding back projects worth about R30 billion. We are engaged with the DMRE Minister and his Director General on ways to resolve these challenges and to re-energise and revive the industry.

There is a lot of effort to boost exploration. The DMRE has indicated that it will be implementing a new and transparent exploration cadastre system, and that permitting process times can be reduced. In 2019, SA accounted for only 1% of global exploration expenditure and only 0.1% of greenfields exploration, despite having an estimated resource of more than US$2.5 trillion of non-energy minerals. This is a massive missed opportunity.

Another crucial area where progress has been made is energy. South Africa still has an ongoing crisis with its energy utility, Eskom. The announcement made by President Ramaphosa in June 2021 to allow private companies to fund and construct embedded generation projects up to 100 MW is a major step in the right direction. We know of at least 1.6 GW of embedded generation projects that are being considered by mining companies, many of them centred on renewables.

Another area of focus is unblocking infrastructural constraints such as port capacity and rail capacity, where an enormous amount of work has already been done.

What are the main concerns with the current Mining Charter?

The 2018 charter was a massive improvement on the charter proposed by the then Minister Zwane.

The two main areas of concern are firstly the recognition of continuing consequences – when a black economic empowerment transaction was done historically and where the 2018 charter has indicated that when there is a sale or change of ownership, the transaction has to be redone. Our concern is that there needs to be solid certainty based on good legislation for investors, and good legislation is stable.

The second area is regarding local content on some of the equipment that is used in mining. For example, some of our mining operations use large scale trucks and there are limits to which local content can be implemented. Our contention is that the fundamental basis for implementing a local content policy was not entirely sound.