President Ramaphosa Says Government Working Hard To Fix Challenges In Mining Sector

President Cyril Ramaphosa acknowledged that persistent challenges are hurting the nation's mining performance and his government is working hard to fix the problems in the mining industry.

The mining industry in South Africa contributes 7.5% to the country's gross domestic product (GDP) and accounts for around 60% of the country's exports.

The president's comments came during the opening of the 30th Investing in African Mining Indaba held on Monday in Cape Town. The Indaba is expected to continue until Thursday.

"We are all acutely aware that we face strong headwinds, and a number of persistent challenges are impeding mining performance," Ramaphosa said, SA News reported. "Globally, commodity price volatility, high energy prices, geopolitical tensions and a global cost of living crisis are playing a significant role in dampening the business operating environment."

Furthermore, he said that that domestically the energy crisis and port and rail bottlenecks are weighing on miners' operational costs, while Illicit mining, cable theft, and infrastructure vandalism adds further strain on the mining industry.

"We are committed to working hard and working together to overcome these serious challenges," he stressed.

The President noted that the formation of a specialized police unit, working with the defense force, have resulted in a number of arrests, prosecutions and convictions of the perpetrators engaged in illegal mining.

Meanwhile, the copper cable theft creates trouble for key rail freight corridors including the supply of coal for export through Richard's Bay.

"Cooperation between the private sector, Transnet and the security services has resulted in an improvement in the security situation over recent months," he added.

The government plans to introduce competition in freight rail operations, while maintaining State ownership of the routes, to unlock massive new investment in South Africa's rail system. The president stated that the initiative will support jobs in every sector in the economy, from mining to manufacturing to agriculture.

Ramaphosa stressed that mining plays a crucial role to play in building the economy of tomorrow.

Speaking of the Energy Action Plan, the president noted that the government has taken several critical measures to improve the performance of existing generation fleet and to add new electricity capacity.

Ramaphosa noted that the Department of Mineral Resources and Energy has secured 1,384 megawatts (MW) of new generation capacity, which is currently in construction or already in operation.

The department has released requests for proposals for the procurement of 5,000 MW of renewable energy under Bid Window 7 and 2,000 MW of gas-to-power and 615 MW of battery storage.

"Transmission capacity remains a challenge, especially in the Cape provinces. Eskom has therefore recently published a curtailment regime which unlocks, 470 MW of additional capacity in these provinces, and which will be essential to the success of Bid Window 7," the president said.