Mining industry calls for investment during Indaba

As the Covid-19 vaccination drive gets under way and the country gears up to stimulate the economy, the mining industry can help by increasing job opportunities and attracting investments. 

Last year alone, the sector contributed R361.9-billion to the country’s gross domestic product, and it employed over 400 000 people. 

President Cyril Ramaphosa lauded this milestone at the 27th annual Mining Indaba, themed “resilience and regrowth”.

The event, which took place virtually, focused on investing in a world in recovery from Covid-19 and the rise of gold in the pandemic. 

Addressing the attendees, Ramaphosa said that his government’s aspiration is that the recovery from the pandemic should be in line with a more inclusive economy. However, he did not provide much further detail on how the mining sector will play a role. 

Instead, Ramaphosa focused on how the industry should be more competitive and transformative and spoke about the need for more sustainable mining, which is key to unlocking innovation. He added that the sector should provide employment, business and training opportunities to people in the mining communities in which it operates.

Rita Spalding, a partner at law firm Webber Wentzel, said that the president spoke about going a long way to fix investor relations in the sector and making the country more attractive. However, there was no criteria or long-term time plan for that. “Once again, [the president gave] a bold statement without the detail needed,” she said.

Spalding said though there are talks about the world changing after the pandemic, mining will still be a vital sector in the economy. She said that there had been a decline in investment in this sector. 

However, the industry can get funding by focusing on environmental, social and governance (ESG) investment vehicles. She said ESG was the new buzzword, which people only think of in relation to the environment. 

“But in the mining industry, a focus on ESG issues can improve the communities mines operate in by, for example, building better schools and improving roads.  

A 2020 PWC report found investors are expecting asset and wealth management firms to make ESG issues integral to their investment strategies. 

The study found that global assets under management are projected to grow by up to 5.6% per annum to $147.4-trillion by 2025.

On Monday, ahead of the Mining Indaba, the president of the Minerals Council South Africa, Mxolisi Mgojo, lamented the lack of investment in the industry. 

“No number of investment conferences that solicit pyrrhic pledges will attract and create investment”, he said. 

The government needs to partner with and enable private sector investment to grow the economy. He said it could do this by allowing private sector investment into rail, ports, electricity and pipelines. 

“The current state-owned enterprise (SOE) model has failed the nation, and so SOEs continue to constrain competitiveness and economic growth.”

Mgojo also added that the industry needs to focus more on exploration. He said between 2000 and 2018, Canada attracted, on average, $2-billion in exploration per annum. South Africa attracted only $194-million over the same period. 

In 2019, the country accounted for only 1% of global exploration expenditure and only 0.1% of greenfields exploration. Mgojo said this was due to the lack of transparency, delays in issuing permits, regulatory uncertainty and the lack of adequately structured tax incentives for individuals and entities to invest in exploration in the country. 

“These are only a few and low-hanging fruits that could change our economic trajectory within the short term,” he said.

Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Tshegofatso Mathe
Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian.

Related stories


Subscribers only

Come what may, the UIF will pay

The fund – the main safety net for unemployed workers – will run at an almost R20-billion deficit

‘Terrorised’ family shines a light on traditional leadership for vulnerable...

The ambiguity between traditional and constitutional leadership has been exposed by the violent banishment of an Eastern Cape family

More top stories

Remote working: Bosses want ‘bums on seats’

Many workers, including managers, like working remotely, but research shows it can be tough on most other employees.

Living with Long Covid in Lagos

Most people recover from Covid‑19 quickly, but Long Haulers in Nigeria are turning to one another for support

Financial sector increases its government debt to 22%

The banking sector will be in a vulnerable position if the national treasury does not stabilise its debt

Get to grips with the brains of youth

Shaping the frontal cortex as a critical youth development strategy

press releases

Loading latest Press Releases…