/ 5 February 2024

Ramaphosa confident that mining rights backlog will be cleared

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President Cyril Ramaphosa. Photo: Leon Sadiki/Bloomberg via Getty Images

President Cyril Ramaphosa has expressed confidence in the government’s ability to clear the mining rights backlog now that it has chosen a service provider to develop the country’s new cadastral system.

Speaking during the opening ceremony of the 30th Mining Indaba taking place in Cape Town this week, the president noted that the new mining rights administration system was among the commitments made at last year’s conference.

The cadastral system provides a record of available mining rights, as well as when currently-held rights are set to expire.

The announcement of the service provider — a three-company consortium — just days before this year’s Mining Indaba has seemed to inspire some confidence among miners. The industry’s trust was almost obliterated because energy and logistics constraints, as well as a growing mining rights backlog, have hampered growth.

Earlier on Monday, the Minerals Council gave a more positive assessment of the industry compared to last year, which eventually saw a marked intensification of the country’s energy crisis as well as greater scrutiny of Transnet’s decline.

According to Minerals Council chief economist Hugo Pienaar, the frequency and severity of load-shedding should let up over the next 12 to 18 months. Moreover, there are signs that South Africa’s logistics constraints — which cost the industry an estimated R50 billion in 2022 — may also start to subside, albeit at a slower pace.

Ramaphosa emphasised the government’s commitment to relieve the economy of its energy- and logistics-related constraints.

In the case of Transnet, the president noted that the private sector has played a significant role in arresting the state utility’s decline. Mineral export revenue declined by more than 11% year-on-year in the first 11 months of 2023, as bulk commodity exporters contended with Transnet’s deteriorated rail infrastructure, according to the Mineral’s Council’s analysis.

Citing the recent approval of the Freight Logistics Roadmap, Ramaphosa said the country’s logistics system “is undergoing a process of rapid and fundamental change”.

“By introducing competition in freight rail operations, while maintaining state ownership of the routes, we will unlock massive new investment in South Africa’s rail system,” the president added.

“This will support jobs in every sector in the economy, from mining to manufacturing to agriculture …. As government we are alive to the reality that without bold, transformative reforms to the logistics sector, mining cannot flourish. We are working hard, in partnership with industry, to ensure this roadmap is implemented without delay.”

But a true turnaround of the industry will probably still take some time.

The new cadastral system could take a year, if not longer, to develop. Minister of Mineral Resources and Energy Gwede Mantashe said on Monday the government has given itself 12 months to get the system up and running.