BEE tussle is 'democracy in action', says Chamber of Mines CEO

Few mature industries anywhere in the world can look to the future with hope, promise and anticipation.

In this, the 125th year of the Chamber of Mines and my first at its helm, I believe that the South African mining sector has the potential to grow investment and to further deliver transformation in the years ahead.

Yes, currently large parts of our industry are struggling, as slowing global commodity demand, mainly due to reduced Chinese economic growth, has led to lower and flat commodity prices. Electricity supply constraints and spiralling input prices are driving up our cost base.

Combined with labour tensions and regulatory uncertainty, the industry may appear to some to have a somewhat gloomy outlook. Yet our country's record shows that, when it comes to the crunch, industry stakeholders are sufficiently aware of their interdependent interests to work together to sustain and grow the mining industry for the future.

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It is true that in 2014 mining's contribution to economic activity continued to decline. Overall contribution to GDP reduced from 8.1% in 2011 to 7.6% in 2014 as total mining GDP declined by 1.6%. Yet this is an industry that remains a significant contributor to South Africa.

In 2014, our industry employed 496, 000 people, paying wages of more than R100-billion. But it's not only direct employment that is important. Every mining-related employee supports around 10 dependants; and for every direct mining job, a further two indirect jobs are created in downstream and support industries.

In effect, our industry created around 1.5million jobs in 2014 and supported - directly and indirectly - 15million people. Many communities owe their continued existence to mining.

Over and above the contribution to GDP, the mining industry is a critical earner of foreign exchange. It pays considerable taxes and royalties - more than R20-billion in 2013 - and is one of the largest single sources of private-sector investment. In 2014 alone the mining sector spent more than R5.5-billion on skills development and more than R2-billion on community investment.

The differences of opinions aired between the Department of Mineral Resources and the chamber and its members this past week in respect of compliance with the mining charter is evidence not of a rift that cannot be bridged, but of our ability to engage in robust debate, based on a relationship that is resilient and which recognises the rights and responsibilities of all parties to address the sometimes competing but always interdependent needs of stakeholders.

Our disagreements are not proof of irreconcilable differences; they are evidence of our intention and ability to work together, and of true democracy in action.

block_quotes_start With its vast mineral resources, South Africa is well positioned to benefit more from its mineral resources. block_quotes_end

The companies represented by the chamber - who together account for around 90% of South Africa's mineral production - have made significant progress in transforming the industry. Our calculations - which have been independently audited - reveal that the average BEE ownership of chamber members is 38%.

With more than R159-billion worth of value transferred to BEE beneficiaries over the past 12 years, the mining industry has done more for transformation than any other component of the private sector.

Admittedly, there are gaps in transformation delivery, such as aspects of implementing social and labour plans. We remain committed to a continued dialogue with the Department of Mineral Resources and other stakeholders.

To realise our country's full mineral potential we have to work in a more collaborative, problem-solving partnership that places achievement of the targets in the 2030 National Development Plan as a key vision.

We are excited about application of Project Phakisa and believe that it can only be successful if all key stakeholders cooperate and collaborate in its planning and implementation.

Phakisa will enable tough discussions on factors holding back investment in mining. If we tackle these properly and create a vibrant, sustainable and transforming industry, mining can contribute materially to achieving the vision of the NDP.

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Despite the challenges currently being faced, the mining sector has continued to deliver, and will continue to fulfil its significant role in contributing to investment, economic growth, transformation and development in the decades ahead.

With its vast mineral resources, South Africa is well positioned to benefit more from its mineral resources. To realise this potential requires significant investment, which in turn, requires a stable, competitive and predictable policy, legislative and operating environment.

Ours is a vision of a modernised, competitive, transformed, safe and prosperous mining sector that contributes significantly to the country achieving the 2030 NDP objectives. Because mining really does matter for the growth, development and transformation of South Africa.

We see in our future a sector that is double its current size in terms of economic contribution, is transformed and is a catalyst for transformation, has achieved zero harm, is competitive and productive and is a sector of which South Africans can be proud.

Baxter is CEO of the Chamber of Mines