If SA’s mining sector were a character in a Jane Austen novel it would be the unloved rector, or the middle sister whose dance card yields only disappointment. Or something like that.
In this conceit, Roger Baxter, CEO of Minerals Council SA, is a struggling suitor. He used the Joburg Indaba conference this month to list the ills the mining sector believed it could resolve, if only its partner-in-waiting could be located. Unfortunately, that partner — the government — wasn’t even in the room.
There are many instances of the mining sector’s ardour being equalled only by the frigidity of the government’s lack of interest.
Take, for instance, the underperformance of the Mpumalanga-to-Richards Bay coal line, operated by Transnet. Faced with a monthly run rate of 600,000t against a 1.2Mt budget, mining firms this year spent R20m on security to stem copper-cable theft — a major source of rail disruption. The investment was a success, roughly halving incidents.
But on the evidence of recent data, coal deliveries are barely on course for 50Mt, well below last year’s disappointing 55Mt. PwC reckons it will cost SA $4.5bn (about R80bn) in lost export revenue. Clearly, the sector can do only so much before questions start to be asked about government competence.
Can we see an off-the-shelf system being procured? That’s something we are really pushing for
— Roger Baxter
For its part, the government says miners must share the blame because they fail to deliver into export allocations. Miners respond by saying they mine below capacity because the trains aren’t available.
“Let’s not have banter,” said Baxter when asked who was to blame. “It’s only through partnerships that we can take this forward.”
This was the tone of the Joburg Indaba and, by extension, the relationship between the mining sector and the state; a precarious balance between criticism and dependence.
Asked for an update on the mineral & energy department’s plans for a new mining licence system, known as a cadastre, Baxter said he had met minister Gwede Mantashe’s special adviser in the past month.
“There was agreement we need to get this thing sorted,” said Baxter. Then comes the punchline, reluctantly delivered: “Can we see an off-the-shelf system being procured? That’s something we are really pushing for.” No mention of whether the government was actively trying to move things along.
It’s hard to overestimate the importance of introducing a new cadastre. Without a transparent, modernised, accurate system to manage mining and prospecting licence applications, there is no way the sector can attract new investment. When mining companies are not renewing resources, the sector is dying.
Mantashe’s department wants a bespoke cadastre, which it promised to unveil two years ago. In response, council members have offered to buy an off-the-shelf system that would take six months to implement.
Time and again, industry leaders took the stage with a “hope over despair” message that was laudable but pointless. “Partnerships between the public and private sectors are essential to unlock our full mineral potential,” said Nolitha Fakude, head of Anglo American SA, in her keynote presentation.
It was a fine speech but turned out to have little PR value — when it came to his turn, on day two of the conference, Mantashe was a no-show. He chose to attend an ANC meeting in the Western Cape instead. “Gwede Mantashe is far too arrogantly busy with other stuff to be with the industry he leads,” said conference convener Bernard Swanepoel. It’s fair to say that the ANC’s elective conference in December will continue to trump industry concerns for the rest of the year.
And when the government did show up, the outcome was frustratingly off-beam. In the teeth of the worst coal railing performance in more than a decade — coinciding with record highs in the coal price — Transnet CEO Portia Derby hit the most discordant note of all. Instead of responding to Minerals Council criticism directly, Derby told conference attendees her company would prioritise black-controlled coal producers in the event new capacity was created.
It was astonishing in its tone-deaf approach to a clear national crisis. “Portia Derby was out of order,” said a conference attendee who asked not to be named. “Making policy announcements, threatening her clients and playing RET factional politics, with a dose of blaming the previous regime and ignoring corruption.”
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