Treasures underfoot hold key to economy

Aligned licensing policy facilitates investment in South Africa's mining industry

International investors continue to see South Africa as a reliable investment destination, with foreign direct investment projects in South Africa having incrementally grown between 2007 and 2012.

At one of the world's premier business gatherings, South Africa sent a high-level and multistakeholder team with 2,500 participants to this year's World Economic Forum in Davos from Jan 21 to 24. This showed that South Africa is open for business and remains an attractive and reliable investment destination.

We want to drive home the point that South Africa remains a competitive business and investment destination of choice, despite some challenges that are now being resolved.

The mining industry continues to make valuable contributions to the South African economy, most notably in terms of foreign exchange earnings, employment and economic activity. In 2010, the Citibank Group affirmed South Africa as the wealthiest mining jurisdiction, with total mineral reserves estimated at $2.5 trillion, exclusive of energy commodities. Further, the available geological information indicates that South Africa remains highly prospective for discovery of more world-class deposits.

The mining sector contributes 9 percent of GDP directly and more than 30 percent in foreign exchange earnings. The sector generates annual income exceeding 330 billion rands ($29 billion) and accounts for 10 percent fixed capital formation in the country. Mining also contributes significantly to the exchequer, including an annual contribution averaging about 17 billion rands in corporate tax and 6 billion rands in royalties.

The future of the industry and its impact on the South African economy and social infrastructure constitute the agenda of the strategic tripartite structure, known as the mining growth, development and employment task team, with significant progress being attained to date. The president-led Framework Agreement for a Sustainable Mining Industry underlines the significance attached to stabilizing the mining industry and has borne fruit, with production of minerals in 2014 expected to be higher than the preceding year by about 6 percent.

With a view to ensuring the sustainability of the industry now and in the future, the Departments of Mineral Resources and Environmental Affairs announced the introduction of a new system on Dec 8 to further improve competitiveness in South Africa's mining sector. The One Environmental System is aimed at streamlining licensing processes of various authorities. It represents the government's commitment to improving the ease of doing business, and further enhances South Africa's global competitiveness as a mining investment destination. Relevant authorizations in respect of mining, environment and water use will now be issued within 300 days. If a decision is appealed against, an additional 90 days will be granted to finalize the process. Environmental mineral resource inspector, who have the same powers as environmental management inspectors to enforce the provisions of the National Environmental Management Act have already been designated.

Under the system, the minister of mineral resources is responsible for issuing environmental authorizations and waste management licenses for mining and related activities. At the same time, the environmental affairs minister is the appeal authority for these authorizations. President Jacob Zuma pronounced this new system last February.

South Africa is becoming an economic force to be reckoned with in this rapidly changing global economy, mainly due to the long-term socio-economic vision and the associated policy-making of its government. Its successes, in terms of its global perception and rankings in key influential indices, such as the World Economic Forum Global Competitiveness Report, the World Bank Ease of Doing Business Index as well as the World Economic Forum Travel and Tourism Index, could set a benchmark for other mining jurisdictions to follow this global trailblazer.

The author is South Africa's minister of mineral resources. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 01/30/2015 page10)