While the mining industry continues to acquire a high degree of technical expertise, local people in mining-dependent economies have not acquired all the skills they need to grow and sustain vibrant economies beyond mining, Minister of Minerals and Energy Buyelwa Sonjica said on Tuesday.
She was speaking at the World Diamond Conference in Antwerp, Belgium.
Sonjica said that for more than a century Africa’s mining industry, largely supported by the production of a range of mineral and petroleum resources, has made an important contribution to the continent’s economy by providing the impetus for the development of the existing physical infrastructure and contributing to the establishment of secondary industries in a few of these countries.
But most of these economies are not able to attract diverse and sustainable levels of investment except through their mining industries, through which they have developed some ability to mobilise capital for new development.
This ability is, of course, limited by the inevitable depletion of mineral resources in the long term, Sonjica said.
In South Africa, mining has become a focus of development in terms of stimulating employment and economic growth, entrepreneurial development and black economic empowerment.
“We firmly believe our abundant mineral treasures must increasingly be converted in the future into economic assets, both tangible and intangible, that will not only favour the mining companies producing them, but also maintain, nourish and develop the economies of the countries affected in the region,” Sonjica said.
She said the necessity of having remunerative activities to take over from mining once exploitation comes to an end led to the development of the Mineral and Petroleum Resources Development Act, which emphasises, among other issues, social and labour plans, implementation of integrated development plans and beneficiation.
The country’s strategies regarding beneficiation of precious minerals have further been consolidated through the Diamond Amendment and the Precious Metals Acts, which are now being implemented.
Sonjica added that amendments to the Diamonds Act are aimed at creating the framework for further downstream value addition and investment in the diamond-manufacturing sector.
Previous diamond legislation did not benefit cutters and polishers, who make up the first stage of value addition in the South African diamond value chain, she said.
“Going forward, we are focusing our energies on attracting the right investors into South Africa, facilitating the financing of diamond mining, trading, polishing and marketing. This expertise is seriously lacking in South Africa, but it is vital, because it is what makes the diamond industry work, especially if the value chain is to be extended,” Sonjica said.
Further downstream value addition has significant multiplier effects in the economies concerned. These include economic spin-offs such as financial and insurance services, equipment and raw material services, transport, energy and water supply services and business tourism.
By developing skills and expertise in value addition, such as cutting and polishing, African economies can start to reverse the trend of being mining dependent so that they can have sustainable businesses beyond mining. — I-Net Bridge