Q&A: Minerals Council South Africa

Q&A: Minerals Council South Africa

Roger Baxter, CEO of the Minerals Council South Africa, on the organisation’s mandate and how it is driving transformation

Q&A: Minerals Council South Africa

Q: What role does the Minerals Council South Africa play in the mining industry?
A: We are the mining industry’s premier representative organisation. We support and promote the growth and transformation of the SA mining industry. The organisation is led by its members and serves them in a number of ways. The 77 mining companies of the Minerals Council are large and small companies producing more than 50 different minerals, collectively producing 90% of SA’s minerals by value. The Minerals Council provides strategic support and advisory input to members through facilitating interaction among mining employers to examine policy issues and other matters of mutual concern to crystallise and define desirable industry standpoints. This is enabled by its board and through a range of standing and ad hoc committees that draw on member companies’ experts and through its own internal specialists.

The Minerals Council acts as the industry’s principal representative and advocate in interactions with government and other stakeholders on these major policy issues. A further vital function of the organisation is to represent some sectors in collective bargaining with organised labour.

Q: Junior and emerging miners have it tough at times. How does the Minerals Council’s Junior and Emerging Miners’ Desk help and support smaller players?
A: ‘Junior mining’ is an international term that generally refers to prospecting companies involved only in the early stages of mining development. ‘Emerging miners’, on the other hand, is a term indigenous to SA since these entities are typically smaller, BEE companies. Emerging miners therefore cover a diverse group of mining and mining-related entities, including prospecting and smaller-producing companies, and associated companies, such as contractors.

Since the advent of the Mineral and Petroleum Resources Development Act in 2002, there has been significant growth in smaller mining companies operating in SA. While the Minerals Council, at policy level, presents a consolidated position on key policy areas, we are sensitive to the needs of our smaller members who often lack the capacity and resources to implement policy and legislation.

The Junior and Emerging Miners’ Desk was established in 2015 as a resource centre that provides advice and support to smaller Minerals Council member companies. Aside from being a voice for the developing mining sector of SA, the desk’s key role is in supporting junior and emerging mining through policy lobbying; providing advice; linking junior and emerging miners to networks; providing mentorship; and disseminating relevant policy information. The desk has also engaged with both the Industrial Development Corporation and the Public Investment Corporation on setting up junior miners’ funds.

Q: How is the Minerals Council working to combat illegal mining?
A: Illegal artisanal mining is often organised and conducted by crime syndicates. It tends to operate on several tiers, from the miners themselves to local buyers, and at regional, national and international levels. At a local level, involving the miners and local buyers, dealing with the issue is a matter for mine security and local SAPS personnel.

Beyond that, the Minerals Council, assisted by its standing committee on security, SAPS, the National Co-ordinating Strategic Management Team and the Department of Mineral Resources, is working to identify and deal with the next three levels that constitute the buyer market nationally and internationally. This work is undertaken hand in hand with international agencies, such as the UN Interregional Crime and Justice Research Institute, European police, Interpol and international embassies.

Q: How is the country progressing on its modernisation journey?
A: SA’s mining industry must modernise as a matter of urgency if it is to survive. It needs to mine longer, halt job cuts, create more jobs and make mines safer. Many of SA’s mines are reaching advanced stages in their mine lives – going deeper and further away from shafts – which results in operations becoming increasingly expensive and more challenging.

Modernisation is a key strategic priority for the Minerals Council, and we aim to create an enabling environment for industry-wide change. There is an urgent need for conversations, debate and collaboration around how modernisation already impacts the industry and the people whose lives it touches. We know that if the domestic mining industry does nothing in terms of modernising, this would result in the loss of as many as 200 000 jobs in the next 10 years.

Q: What does modernisation entail?
A: Modernisation is not just about mechanisation or the gradual implementation of new technology that could lead to the replacement of people with machines – it is a process of transition and transformation from traditional mines to the mine of the future. A core part of this transformation involves people, and we have made a conscious decision to place people at the centre of this transition. We’re not simply aiming to replace people with technology, but to fundamentally rethink the relationship between people and technology in mining. For us, modernisation should always be viewed as a combination of augmenting and enhancing the human condition; it is a means to empower people, not replace them.

By putting people at the centre of mining, we make mining safer and more competitive. Mining is critical to the new, modern economy. A ‘modern’ view goes beyond the mere adoption of technologies. It’s a way of thinking that changes the way the industry operates and the way it’s perceived; it’s about embracing the elements and minerals critical to a green, low-carbon future; and, more importantly, pursuing a people-centred approach necessary to create a broader, enabling environment, of which technology is just a part.

Q: How does the Minerals Council support skills development as part of that journey?
A: We engage with the Mining Qualifications Authority to translate mining sector skills demands into effective sectoral skills plans; to design and register qualifications; to maintain the quality of training; to give effect to the requirements of the Skills Development Act of 1998; and to maximise return on skills development levy investment. We also participate in and influence a tertiary education and training system that consistently delivers sufficient graduates and highly skilled individuals to the mining industry.

Our activities also include influencing the policy and strategy of the development and quality assurance of occupational qualifications; supporting the maintenance and improvement of a further education and training delivery system that is responsive, cost-effective and of high quality; and contributing to the development of policy that will result in the implementation of adult education and training, and foundational learning competence programmes, raising the skills base in the mining industry.

The Minerals Council has also embarked on the Mining Skills 4.0 project, which aims to develop a reskilling/upskilling framework and strategy to assist people in a just transition into the Fourth Industrial Revolution. The objective of the project is to strengthen the capability for adoption of modernisation outcomes in a people-centred, collaborative manner, focusing on developing a framework and strategy for skills development for the mining industry of the future. This would be done under the key principle that a just transition to modernised mining is necessary.

Q: What role does the Minerals Council play in fostering transformation?
A: The Minerals Council sees the Mining Charter as a key mechanism for the advancement of transformation. That is why one of our primary tasks has been engaging with government and other stakeholders, first in the development of the charter, and then the review and renewal of subsequent versions of the charter.

Most of the negotiations and discussions about transformation in general, and the Mining Charter in particular, are held under the auspices of the tripartite Mining Industry Growth Development and Employment Task Team, in which the Minerals Council represents the mandated positions of its members. We also lead the delegation of members when the industry is required to present to Parliament on the progress made by the mining industry with regard to the Mining Charter.

Q: How would you rate the current state of mining in SA?
A: There is no simple answer to this question. As in other mining jurisdictions, there have been improvements in commodity prices and hence in the industry’s profitability. On the regulatory side, the situation has improved significantly over the past two years, when the threat of adverse regulatory measures by the previous government created widespread pessimism. Since then, the government of President Cyril Ramaphosa and sector leadership of Minister Gwede Mantashe have brought a fair degree of regulatory certainty. This was reflected in the last report of the Fraser Institute, where SA rose 27 places in the Policy Perception Index. However, we need to find our way into the top quartile of mining jurisdictions, and this is some way away.

Q: What key areas do stakeholders need to focus on to secure the future of the sector?
A: Issues that need addressing include maintaining SA’s investment grade sovereign rating (all efforts must ensure fiscal consolidation, particularly in the February 2020 budget); working with government and communities to ensure stable communities and less disruption to mining; promoting industrial relations stability and workable outcomes to negotiations; and the resolution of outstanding issues on Mining Charter III. The other very big issue is Eskom, including the question of energy security, the trajectory of electricity prices, and how Eskom will be restructured.

Q: Where do you see SA’s mining sector in 10 years’ time?
A: SA mining investment could almost double in the next four years if the country was to return to the top quartile of the most attractive mining investment destinations. That would transform the role of its mining, both locally and globally.

By Mark van Dijk