- Ensure security of electricity supply
- Accelerate economic reforms to improve the operating environment
- Combat illegal mining and damage to infrastructure
- Improve the regulatory environment by introducing a new mining cadastral register
South Africa, like other African countries, is suffering the effects of the global crisis due to the volatility of commodity prices, rising energy prices, geopolitical tensions and the global crisis, all of which are increasing the cost of living. As a solution, the South African government has defined 4 objectives for 2023 to develop the mining and energy sectors, improve its global competitiveness and take advantage of the global dynamic in favour of sustainable development.
- The first objective is to ensure security of electricity supply. As part of the Electricity Action Plan, the government has taken a number of key steps to improve the performance of our existing generating fleet and to increase electricity generation capacity. The Ministry of Mineral Resources and Energy has secured 1,384 MW of new generation capacity that is currently under construction or already in operation. The Ministry has published tenders for the procurement of 5,000 MW of renewable energy under Tender Window No.7, for 2,000 MW of gas for power generation and for 615 MW of battery storage. Transmission capacity remains a challenge, particularly in the Cape provinces. Eskom has therefore recently published a reduction scheme that unlocks an additional 3,470 MW of capacity in these provinces, which will be critical to the success of tender No. 7.
- The second objective was to accelerate economic reforms to improve the operating environment. We have put in place a number of reforms to enable businesses to operate in an optimal way. Since the removal of the licensing threshold for embedded generation, South Africa’s national energy regulator has registered no fewer than 1,312 generation facilities with a combined capacity of more than 6,300 MW. Around a third of this capacity supplies the mining load. Encouragingly, more and more mining companies, including Gold Fields, Anglo American, Seriti and Exxaro, are beginning to take advantage of these reforms to power their mining operations and reduce their operational costs.
- The third objective we have identified is the fight against illegal mining and damage to infrastructure. Since the establishment of a specialised police unit, in collaboration with the defence forces, we have seen a number of arrests, prosecutions and convictions of the perpetrators of this crime. The Ministry of Mineral Resources and Energy, through Mintek, continues to seal ownerless and abandoned mines. Since 2019, the Ministry has closed and sealed 251 abandoned holes and shafts. Over the next three years, the department intends to close a further 352 pits. Criminal activity, and the theft of copper cables in particular, has had a serious impact on key rail freight corridors, including the supply of coal for export via Richard’s Bay. Cooperation between the private sector, Transnet and the security services has improved the situation in recent months. South Africa’s freight logistics system itself is undergoing a process of rapid and fundamental change to improve its efficiency and position it for the future. Working with the private sector, under the auspices of the National Logistics Crisis Committee, we are addressing the challenges posed by the ports and railways. The recently approved Freight Logistics Roadmap sets out the following elements. By introducing competition into rail freight operations, while maintaining state ownership of the routes, we will unlock massive new investment in South Africa’s rail system. This will support employment in all sectors of the economy, from mining to manufacturing to agriculture. Similarly, by modernising and developing our port terminals through innovative public-private partnerships, we aim to make South Africa a leading player in global markets. As a government, we recognise that without bold and transformative reforms to the logistics sector, mining cannot thrive. We are working hard, in partnership with industry, to ensure that this roadmap is implemented without delay.
- Finally, in 2023 we committed to improving the regulatory environment by developing and implementing a new cadastral system to facilitate the operation of a modern mining rights administration system.
Now that we have a preferred tenderer, we are confident that the rapid implementation of a modern, world-class solution will clear the backlog of exploration and mining applications and pave the way for the development of new mines.
Extract from the speech by Cyril Ramaphosa, President of South Africa, at the opening ceremony of the 30th Investing in African Mining Indaba on Monday 5 February 2024 in Cape Town, South Africa. The event runs from 5 to 8 February 2024.
Elie KABORE
