Investors in mining exploration should be incentivised
Mining News Pro - South African retail investors willing to invest in mining exploration should be incentivised as is the case in other mining jurisdictions, the economic transformation committee (ETC) of the African National Congress (ANC) states in a 30-page discussion document just released.
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At a time when the Covid-19 pandemic is continuing to impact negatively on economic activity in South Africa, the ANC’s ETC has developed an economic framework for reconstruction, growth and transformation, with the objective of building a new, inclusive economy.

Broadly, the paper seeks to answer the question: what needs to be done to build a fast-growing, more resilient, and more inclusive economy, arguing that in response to the current crisis, the ANC should strive to unite society around a series of bold and decisive actions in order to set the economy on a path of high growth combined with social inclusivity.

In the section on mining, it states that although the South African mining industry has in recent years experienced falling levels of investment and exploration, amid job losses and increased cost pressures, South Africa remains a global mining powerhouse, with the country’s geological endowment and reputation the envy of the world.

It points out that South African leadership and expertise can be found at virtually every link along the mining value chain, with other countries looking to South Africa and South African companies for the way it builds mines, builds relationships with local communities, and protects the environment.

South Africa, it notes, is also a top destination for mineral endowment and offers unparalleled access to technical skills.

In order to translate the comparative advantage South Africa has into a competitive advantage, it states that there is a need to:

-strengthen innovation;
-introduce robust junior mineral exploration and clean technology;
-ensure mineral processing; and
-build strong supportive mining supply and services sectors.
-It acknowledges the South African Minerals Energy Complex Interventions Plan as outlining a vision for government, industry and stakeholders to place the mining industry on a path of competitiveness and long-term success.

The mining sector, it says, can help South Africa to drive a localisation agenda. In this regard, there is a need to more aggressively re-orient the mining sector inwardly, in order to support the local beneficiation of minerals, build the minerals value chains and strengthen broad-based industrialisation. Linked to this is the identification of strategic minerals that will be designated for local beneficiation.

It says that regulatory disputes and uncertainties should be resolved with immediate effect to facilitate expanded investment in the sector, increase mining research and development (R&D), led by Mintek and the Mandela Mining Precinct, as well as increase mining exploration, with the Council for Geoscience playing a leading role, to ensure long-term expansion of the sector.

Listings of mining companies on the Johannesburg Stock Exchange should be encouraged and South African retail investors willing to invest in mining exploration should be incentivised, as is the case in other mining jurisdictions.

MINING SECTOR LINKAGES

It lists manufacturing activities that are linked to mineral beneficiation chains as including coal beneficiation; platinum group metals beneficiation, such as, fuel-cells and other industrial products; steel value-chains, which include iron-ore, manganese and chromium; and vanadium, for production of battery-linked technologies, among others.

Historically, it states that South Africa has also had a well-developed sub-sector in upstream supplies to the mining sector and highlights the Mandela Mining Precinct as a R&D organisation that should receive maximum support from the State and mining companies. This should include targeted initiatives in linkages such as green hydrogen in combination with platinum fuel cells and battery storage technology and the document highlights South Africa as the world’s largest platinum producer.

“In line with our country’s long-term commitment to mineral beneficiation, there is a need to scale up existing research and development, and production initiatives, in this area.

“Stationary fuel cell applications in off-grid electricity generation (in which Eskom can play an important role) as well as mobile applications in fleet renewal and expansion for both municipal and bus rapid transport systems can provide a market for this proudly South African product and dramatically reduce carbon gases from our public transport system,” states the reconstruction, growth and transformation discussion document, which is targeting the building of a new, inclusive economy.

GREEN ECONOMY AND GREEN INDUSTRIALISATION
The ANC document states that the green economy can be seen as part of innovative solutions to address the persistent challenges of inequality, poverty and unemployment as well as climate vulnerability. It is also a significant instrument in closing gaps in the security of energy, food, water and electricity supply.

It stipulates that the Covid-19 economic recovery must include a green component as this will bring these strategic advantages:

firstly, it will have a positive impact on job creation in new green industries and enterprises that use new technologies;

secondly, dedicated international ‘green funds’ could be accessed to fund these new industries;

thirdly, green bonds have been shown to be cheaper than traditional bonds; and

finally, investment in green and sustainable solutions offer opportunities to promote long-term economic competitiveness and climate resilience.

The focus of South Africa’s green economy interventions should be on expanding the programme to retrofit public and private buildings with measures to improve energy and water efficiency. The extension of this programme to schools, clinics and other public buildings has the potential, it says, to build a local industry that is labour intensive and anchored in a sustainable value chain that supports the participation of small, medium-sized and microenterprises (SMMEs) and skills development for unemployed youth.

It notes that many of the coal-fired power stations in Mpumalanga that are due to be retired as they reach the end of their useful lives are the only source of livelihoods for local communities, and that retrofitting these power stations with renewable energy generation alternatives could save jobs, support livelihoods and ensure that important grid infrastructure is revitalised.

Research on the appropriateness of these geographical sites for solar energy generation has already been concluded and the feasibility studies are positive.

Accordingly, it is proposed