Mining companies have R20bn worth of projects locked up in red tape and bureaucratic processes that are now the special focus of the department of mineral resources & energy to ensure the projects come into existence.
In a December survey of its members, the Minerals Council SA, a body to promote and protect mining companies’ interests, found that in 100 responses there were a wide range of projects with a value of R20bn that had been prevented from development because of slow government processes, council CEO Roger Baxter said in an interview.
A greater level of collaboration between the council and the department after jointly tackling the consequences of the Covid-19 lockdown in March 2020, and managing the subsequent return to work, had opened the path to clearing the way for many of these projects, he said.
Working closely with the department’s director-general, Thabo Mokoena, the council had brought the list of projects to his attention to see what departmental officials could do to expedite them, Baxter said. These included exploration and mining operations, and some had been delayed for two or three years.
The hold-ups included waiting for permits to be approved by the department, approvals for mining right transfers, or delays in securing water-use licences or environmental permits. “We’ve engaged the [director-general] on this and he’s agreed we must go through each one and look at the blockages,” Baxter said.
Power projects
Not all members in the council had responded to the request for feedback and not all those who had replied gave investment numbers. “This R20bn is projects where companies have made applications and excludes potential projects that companies haven’t pushed the button on yet,” Baxter said.
The figure excluded expenditure on 2GW of power projects that council members, which account for more than 90% of SA’s annual mineral production, wanted to install to reduce their reliance on expensive and unreliable Eskom electricity and reduce their carbon taxes.
Reliable, environmentally friendly and cheap electricity was of critical importance to mining companies, said Neal Froneman, CEO of Sibanye-Stillwater, the world’s largest source of platinum group metals. “Working towards policy certainty is all good and well, but if it’s not good policy it’s not going to help. You can have certainty with bad policies,” he said, pointing to “ideological differences” between the council and the department.
Bad policies
“Speeding up mining rights processing will have a very small difference to growing investment. It won’t create the quantum shift we need to reboot and grow the SA economy to reduce unemployment and poverty. You have to start with the inhibitors to investment. We need a lot more debate and work,” Froneman said.
Mokoena said during the Investing in African Mining Indaba, a virtual event, that minister Gwede Mantashe wanted mining and prospecting right approvals to be speeded up, cutting the time by half. The department was considering ways to clear regulatory blockages.
“The issue of a one-stop shop, this is something we have agreed we must take very seriously. This is where we will sit and look at all the challenges confronting the industry. We are looking at each individual mining company and the challenges they are facing,” Mokoena said.
After three months, the department’s officials would give feedback on what had been achieved in removing the blockages, he said.
The department and the council had set up working teams to identify areas that were impediments to growing the mining industry and how to resolve them.
These included infrastructure like electricity, rail and ports, as well as the regulatory environment to create a certain and investor-friendly set of laws.
seccombea@businesslive.co.za
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