SA state mine firm to secure energy minerals

Brendan Ryan | Thu, 03 Sep 2009 10:19
[miningmx.com] -- THE underlying motivation driving the proposed state-owned mining company was security of supply of coal and uranium, said South African minister of mineral resources Susan Shabangu.

Interviewed at the Africa Down Under conference being held in Perth, Western Australia, Shabangu said the South African government’s intention was that the state would operate its own mines producing coal and uranium.

This would follow an initial audit of the government’s various interests in the South African mining industry held either directly, as in diamond producer Alexkor or through equity stakes in private sector companies.

“It is very important that the state has a strategic involvement in coal and uranium mining. This has long been part of our strategy and does not result from last year’s power supply problems," Shabangu said.

“Obviously, these mining operations must be done competitively and efficiently. We must have the right skills and the right management. The proposed state mines cannot be run on the basis of a lack of competition.”

Asked whether the state should be involved in mining at all - given its poor track record with State-owned diamond miner Alexkor - Shabangu blamed previous private sector operators for the problems.

She alleged that Alexkor had been “deliberately run down by private operators trying to make it a cheaper asset” and said Alexkor had now been returned to profitability.

Shabangu said her department should be able to present its plans for the state mining company to the South African cabinet in the first quarter of 2010.

Regarding the proposed “codes of good practice for the South African minerals industry” (the Codes) Shabangu repeated comments made previously that there had been a “misunderstanding” between government and the mining industry over the introduction of these codes.

“I am confident that we will have settled all the issues with the Chamber of Mines by the time we make an announcement (on the outcome),” she said.

She said there was “nothing new” in the Codes which merely elaborated on issues that had always been contained in the Mining Charter.

“We are talking about social plans and issues such as provision of housing and infrastructure, skills development and sustainability of local communities," Shabangu said.

“Stakeholders have to take responsibility for these issues at the right time which is right from the beginning and not at the end.

“Implementation of the mining charter five years ago did not collapse the South African mining industry as many feared and implementation of the Codes will not do that now.”

Shabangu said the outcome of discussions with the mining industry over the Codes was likely to be made public in October this year along with the government’s findings from the review that was currently underway into the Mining Charter.

She told delegates to the conference in her presentation that her department was at “an advanced stage” of finalising the progress to date in terms of the Mining Charter.

Shabangu added, “our observation in terms of transformation since the promulgation of the Minerals and Petroleum Resources Development Act and the Charter is that there has been limited progress.

“The Mining Charter intent must be understood within the context of dynamic transformation and that this transformation does not have a shelf life ending in 2014 – it is not an event but rather a process.

“The role of communities in mining has been less that adequate, with only a few pockets of excellence which we anticipated would demonstrate the value of community participation and would be widely adopted as a model for effective community participation.”