Chamber responds to National Treasury’s inclusive growth plan

The National Treasury issued a statement relating to the Government’s Inclusive Growth Action Plan as announced by Finance Minister Malusi Gigaba at the ANC’s Policy Conference last week. The Chamber of Mines had a positive reaction to the statement. 

The Chamber’s Office Bearers and CEO met with Minister Gigaba on 11 July 2017 to discuss the crisis facing the mining sector, and the specific challenges and issues that need to be resolved to help the industry back onto its feet. 

Chamber
Image credit: Chamber of Mines

Challenges affecting the viability and investment attractiveness of the sector were discussed, including issues relating to policy uncertainty; the release of the damaging DMR’s Reviewed Mining Charter; the delays to the finalisation of the Mineral and Petroleum Resources Development Act (MPRDA) amendment bill; the impact of illegal mining on the sector; the trust breakdown between the DMR and the industry; as well as concerns regarding red tape and allegations of state capture. 

It was agreed with the minister that further engagement is necessary as a struggling mining sector has a material dampening effect on the whole economy, including the ability of the Treasury to collect tax revenue. The 11 July meeting was held after Treasury’s Inclusive Action Plan had been developed, and it is the Chamber’s hope that additional substantive ideas will be discussed and potentially added to the action plan related to creating policy certainty and to improve investor confidence, among other things.

The Treasury Action Plan as it currently stands does not address the critical challenges facing the mining sector. The sector is in crisis, with 70 000 jobs lost over the past five years and declines in net and gross investment over the past two years. The mining industry’s own regulator appears to have done little to assist the mining sector through its extended viability crisis. The inappropriate application of Section 54 mine stoppages, delays in approving Section 11 transfers, delays in mine licensing processes and lingering policy uncertainty because of the imposition of the unilaterally developed DMR Reviewed Charter and a delay to finalising the MPRDA Amendment Bill, have all detracted from investment. Ultimately, all these issues need to be addressed if South Africa is to realise the true economic and transformational potential of its mining sector.

 

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