REMARKS BY THE HONOURABLE MINISTER OF MINERAL RESOURCES AND ENERGY MR GWEDE MANTASHE (MP) NORTHERN CAPE MINING AND ENERGY INVESTMENT CONFERENCE

It is once again an honour for me to engage with you on the potential of this province in Mining and Energy.

This year's edition of the Northern Cape Investment Conference takes place shortly after the release of the Gross Domestic Product (GDP) performance in the first quarter of 2023. The statistics indicate that the economy grew by 0.4%, with mining and quarrying contributing a positive 0.9% year-on-year.

This low contribution of mining is mainly attributed to two factors, logistics (rail and port infrastructure inefficiencies) and unstable power supply (loadshedding). Furthermore, these constraints are also highlighted in the 2022 Fraser Institute survey report as the main contributing factors to the downgrade of South Africa's mining industry to the bottom quartile on both investment attractiveness and policy perception indices.

In contrast to the positive contribution of mining to the GDP, the electricity, gas, and water cluster contributed a negative 1.0%. However, on the positive side, we are encouraged by the recent reduction in loadshedding stages which is mainly attributed to improvements in the Energy Availability Factor (EAF) which gives us confidence that loadshedding will be eliminated in the near future and, therefore, enable businesses to thrive.

We are further encouraged by the efforts made by the mining sector working with Transnet to improve the constraints in the rail and port infrastructure. We believe resolving these constraints will enable the transportation of bulk commodities to the ports, thus improving our export earnings and the contribution of the Northern Cape to the GDP.

The Northern Cape province is a good example and demonstration of the undeniable mineral and energy complex. A demonstration that the exploitation of mineral resources always has and will be dependent on energy for years to come.

Over the past five-year investment drive period led by President Cyril Ramaphosa, well over R90 billion investments have been pledged in the mining and energy sectors in the Northern Cape alone. Some of these investments have translated into actual projects which are under construction with some completed and connected to the grid, thus supporting both mining activities and the economy broadly.

However, a notable challenge to further investments in the energy sector is the unavailability of grid capacity in the province, and in the coastal areas. Hence, resolving the grid capacity constraint is receiving priority from government.

A new theatre of global economic struggle is emerging around critical minerals. This has been witnessed through several agreements between countries endowed with these minerals and industrialised countries looking to secure future supplies. We are monitoring this trend to ensure that whatever is contemplated will support the industrial aspirations of our country. It is no secret that our country is well endowed with these critical minerals and can use them not only for beneficiation but also to position our country to be a strategic partner.

Several of these critical minerals occur and have been discovered in this province. These include for example, the Vedanta zinc operations, Orion minerals copper exploration project, several manganese projects and some rare earth elements bearing rocks which have been identified. These projects symbolise the revitalisation of the Northern Cape mining corridor.

There can be no ambiguity in saying, the full potential of the Northern Cape mineral wealth remains largely untapped. We therefore call on investors to look to this province for investments into more exploration projects. We have enabled this through the development of the exploration strategy coupled by the exploration fund which is currently being established by the department in partnership with the Industrial Development Corporation (IDC). This initiative will ensure that we de-risk the mineral acreage of the country and encourage the emergence of new mines. Priority will also be given to critical minerals projects as these will support our green economy trajectory and support our just energy transition.

To ensure that South Africa reaps maximum benefit from these critical commodities, we are currently developing the critical minerals strategy for the country which will enable us to support the development of domestic and global value chains for the green economy. We further call on investors to consider prioritising investments into both mining and processing of these commodities in the country, in particular the Northern Cape, as this will ensure the diversification of the economy and industrialisation.

Noting that a successful mining revitalisation project depends on a transparent and reliable cadastral system which the Department has had challenges with in the past, we have since begun a process of procuring a system with integrity. It is expected that the adjudication process will be finalised in the near future and therefore take us a step closer to the finalisation of this process.

Notwithstanding this challenge, the Department continues to eradicate the backlog in applications for prospecting and mining rights which this province has also been affected with. In this regard, the Department has brought in additional resources from two other regions to accelerate the eradication of the backlog in this province.

Ladies and gentlemen, the Northern Cape Province is also blessed with petroleum resources, accounting for at least 70% of the Orange Basin in which large oil and gas discoveries have been made in Namibia. At least three exploration wells offshore the Northern Cape province will be drilled in 2024 to prove the petroleum resource potential in the Orange Basin.

The Department is satisfied with the mitigation measures to be used during the oil and gas drilling campaign and has been assured that there will be no harm to the marine eco-system which provides livelihood to small scale fisheries. By allowing for oil and gas exploration in the province, we will unlock resources that can restore security of energy supply in South Africa.

In conclusion, allow me to reiterate our call to investors to continue investing in the mining and energy sectors in this province. I can assure you that this is a no-regret option given the potential of this province.

I thank you.

Public link

Please use the above public link if you want to share this noodl on another website.