If Buyelwa Sonjica, South Africa's minister of mines and energy, has a radical plan to resuscitate South Africa's stricken mining sector, she gave no hint of it as the keynote speaker at this year's Mining Indaba conference in Cape Town.
While she was quick to remind delegates about the importance of the mining sector to the South African economy, she expressed dissatisfaction over the rate of progress of so-called black economic empowerment (BEE) in the sector, and used today's platform to once again criticise the sector over its safety record.
She pointedly recalled words from last week's State of the Nation address by President Kgalema Motlanthe: Our economy remains largely reliant on mining and agriculture for exports. Sonjica then referred obliquely to the mounting job losses raging across the sector.
While the mood in the global resources sector has picked up somewhat in the past few months, value destruction remains the order of the day. Measured from peak stock prices seen in May 2008, the world's biggest 100 mining companies have surrendered USD 1.6 trillion in market value, and are currently valued at USD 853bn, of which 51% is represented by the top ten names.
The degree of devastation has varied according to the different price damage sustained by individual commodities. For South Africa, the heaviest wounds so far have been sustained by miners of platinum, ferrochrome and diamonds. Speakers at the conference so far have persistently referred to the managed contraction of the global mining industry, in reaction to global conditions, as one of the sharpest ever recorded. Rationalisation, which has taken many forms, has taken months rather than years, and continues apace.
Sonjica complained that the global financial and economic meltdown is still an unfolding process; governments cannot conclusively quantify the issues and formulate strategies. But government is seized with the matter and a multi stakeholder team has been tasked to monitor the situation. The minister said that mining companies are urged to come up with creative ways to ensure that employees are not retrenched.
Sonjica confirmed that South Africa's mining charter, in place since 2004, would be reviewed, as scheduled, by later in 2009. She said that only in a few cases has broad empowerment been achieved. Fronting continues to be a problem in the mining industry, especially in Limpopo and the Eastern Cape.
While reminding delegates that South Africa was spending billions of rand upgrading and expanding the country's transport and electricity networks, she made no mention of the system of royalties due to hit the mining sector within weeks, for the first time in country history. There was also no reference by Sonjica to increasingly intransigent trade unions.
Sonjica, however, hung out an extraneous olive branch; referring to global conditions, she stated that the impact on mining and minerals is only temporary; companies should be planning for another commodities boom.