World Economy

Zuma: S. Africa Must Face Mining Sector Challenges

Zuma: S. Africa Must Face Mining Sector ChallengesZuma: S. Africa Must Face Mining Sector Challenges

President Jacob Zuma says the government, mining companies and stakeholders need to work together to turn things around in South Africa's mining sector, which is currently faced with an acute challenge as a result of a dramatic drop in commodity prices.

Providing an update here Thursday on Operation Phakisa–the government initiative to fast-track implementation of solutions to the nation's critical development issues–he said an alarming number of companies were running at a loss and investment in exploration and extraction had dropped significantly, Bernama reported.

"At current prices, more than 40% of the country's platinum mining industry and 31% of the gold mining industry is loss-making. We need to work together to turn this around," he said.

The president said the Mining Phakisa, which would be launched in a few months' time, would aim to build partnerships between government and key stakeholders in the mining sector, so as to unlock investment and optimize the sector's positive developmental impacts on the economy and society.

The president announced that the actual Mining Phakisa Laboratory would begin in October 2015. At this stage, six key themes or work streams had emerged for the Mining Phakisa Lab and would require further consultation.

These include: Up-stream linkages and capital equipment sector that supports the mining sector; Win-win resolution on beneficiation of both bulk resources and precious metals; Social and community development–with a particular emphasis on housing; Increasing exploration activities, including enabling initiatives by the state such as more detailed geo-scientific information; Enhancing the research, development and innovation cluster; and holistic modernization planning and implementation.