Mantashe doubles down on mining’s importance despite reduced budget

Adjustments in the portfolio steering South Africa’s mining and resource policy — including a R1.4bn budget reduction — have not stopped minister of mineral and petroleum resources Gwede Mantashe from beating his drum on South Africa’s energy approach and the need to recommit to mining.

Addressing a debate on his budget vote in the National Council of Provinces on Thursday evening, Mantashe said his department — which was separated from the energy portfolio in the government of national unity — would still work to ensure balance in South Africa’s energy policy.

“Let me confess that a combination of reducing carbon emissions and ensuring that there is baseload to sustain electricity is the solution in the long term. Anyone who discusses it tends to go to the extremes. We either say, ‘do away with coal, go to renewables’ or 'leave renewables, go to coal’.

“The reality is that it’s a combination of baseload and low carbon emissions that will be a solution for the country. Any one technology is not going to solve our problems.”

Mantashe referenced the integrated resource plan, saying 150MW of electricity has recently been connected to the grid. He said 2,583MW were procured under bid window 5 and that 4,200MW was released to the market under bid window 6.

This was over and above bid window 1 battery storage worth 500MW and 8,200MW of new generation now being procured with requests for proposals already issued for 5,000MW under bid window 7, and 2,000MW of gas to power.

“We are paying attention to the need for capacity to generate electricity. Our 2,500MW nuclear build programme is now under way. We know we were taken to court, we will review this and that. But the reality of the matter [is that] we need that capacity of nuclear because we are procuring nuclear at a rate and pace that the country can afford. So we are doing it.”

The minister said the Central Energy Fund has concluded the sales deal to acquire the Sapref refinery in Durban after Shell announced its exit from the South African market.

He said the government will invest in new refining capacity while three PetroSA plants are renewed with help from Russian gas firm Gazprom in renewing PetroSA’s Mossel Bay refinery.

“I know the question would be ‘Why would you partner with the Russians?’. We are international. We partner with anybody. We do trade with anybody. We don’t have a no-go area.”

Mantashe decried “lazy analysts” who claim South African mining is a sunset industry. On the contrary, Mantashe said, two new studies by the department, one on the general mining sector and the other on critical minerals, will give the government and the sector better insight.

“We have commissioned a study on the state of mining. That study is going to look into mining mineral by mineral because South Africans have always believed that mining is [only] gold mining. Mining is more than gold mining. Gold mining is in decline but mining is not.”

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