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South African Business 2022

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Welcome to the 10th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by the website Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. This issue has a focus on Special Economic Zones which are being rolled out across the country with specific economic areas of focus. The importance of the revival of minerals exploration and the significance of onshore and offshore gas discoveries is the subject of another special feature.

INTERVIEW Finding the

INTERVIEW Finding the right pace to transition to clean energy DMRE Deputy-Director General Ntokozo Ngcwabe explains how a drive to promote exploration is proving that mining is the opposite of a sunset industry. What are the Department of Mineral Resources and Energy’s main priorities? Energy security is at the very top of our list in terms of electricity and fuel. The minister has been announcing bid windows and those are all geared towards increasing megawatts that flow into the grid. We are adding megawatts to the grid to support Eskom and to support our economic growth goals. With fuel, we have to ensure that we keep a certain level of strategic fuel stock at all times for the country. We are doing a lot of work on the policy front to ensure that as we drive energy security, we also follow the just energy transition path. Ntokozo Ngcwabe BIOGRAPHY Ntokozo Ngcwabe is the Deputy Director-General in the Department of Mineral Resources and Energy. She is responsible for Policy, Global Relations and Investment Promotion and has 22 years of experience in the minerals and energy sector. Her responsibilities include promoting investments into the entire value chain in both mining and energy, and building and growing partnerships in the two industries. What are other policy issues? The minister recently gazetted regulations for clean fuels. We need to be investing in clean energy technologies and clean coal technologies to ensure that as we exploit our resources, we do so in a responsible manner that ensures that we meet our sustainable development commitments. Is a commitment in terms of local content something you expect from bidders? It definitely is. At this point renewable energy generation components are not manufactured locally. As we progress with this programme, localisation is something we want to see as opposed to components just being brought in for assembling in South Africa. Our aim is to ensure that we create jobs as we walk our just energy transition journey. Further down the line, we then want to move into industrialisation and massifying in terms of job creation. What are the opportunities in respect of the world’s demand for minerals and metals that will assist the transition? We are ranked the highest country in the world with the biggest resources of platinum group metals (PGMs). We are looking to drive the markets for PGMs but we are also following what is happening with electric vehicles. State-owned entities like the CSIR and Mintek have done a lot of work and are investing in fuel cell technology. The entire Minerals Council building in Johannesburg is powered by fuel SOUTH AFRICAN BUSINESS 2022 46

INTERVIEW cells. How do we massify commercialisation of that technology so that we drive demand for PGMs but also make our own contribution in terms of the clean energy revolution? Our research institutions are at the very front of that work. The Council for Geoscience is also undertaking a mapping programme that is focused on minerals of the future, ie battery minerals. What are some concrete steps? We are in the early stages of looking at how we advance on the implementation of these technologies, for example powering our government buildings using smart clean technologies. From there, the aim would be to massify and grow. With greater demand you bring the price down as price is still a challenge. We know that as we invest more and more we will create and grow the market thus driving accessibility and affordability of these technologies. What is the future of coal in South Africa? Interesting question. South Africa is well endowed with coal and we are not going to wish it away. Let’s look at this subject holistically and realistically. South Africa’s energy generation basket is over 90% coal fired. It’s not realistic for South Africa to say in the short term we’ll get rid of all 16 power stations. There is provision for coal in the IRP, but the main focus is that new capacity is going to be in clean technologies. Our position is that as we mine and burn this coal to generate power, let’s deploy clean technologies; this will provide the baseload which we can never have from renewable energy sources. Pace is important in this conversation. The very essence of “just transition” is that it’s a process of moving from one stage to the other. It’s not a flip over that will happen overnight. The burning issue for me is I’d really love to see us having a balanced conversation about the just energy transition and the fact that South Africa needs to work on a South African solution at a rate and scale we can effectively manage and afford. We are signatories to the Paris agreement, and we remain committed to climate change and fulfilling our obligations. But let’s take a balanced view on this subject. How does the DMRE see the zinc operations in the Northern Cape? The Northern Cape is a strategic province in that it is under-explored. It can drive growth and help increase the contribution of mining in job creation and percentage of GDP. We are really putting our energies into driving exploration in that province. But it’s not only the zinc projects. A huge deposit of copper has been discovered in that area. These are commodities that are also critical for the future. Is the DMRE taking steps to expand exploration? DMRE, the Minerals Council and other stakeholders have developed an exploration map for South Africa which is currently going through the approval processes. It’s a specific goal to attract 5% of global spend on exploration, because we currently attract about 1%. If you don’t explore you won’t create new mines and will therefore not grow. Some people say mining is a sunset industry but that’s based on gold mining that is declining. There are other areas and new minerals and we want to turn our focus to those. The saying that if it’s not grown, it’s mined cannot be over emphasised, therefore if we want to grow our economy, we must invest in new mining projects. How is the process going towards regularising Zama Zamas? There are two aspects to it. There are criminals and the South African Police Service is dealing with them, but there are also so-called “illegal” miners where you find old ladies with picks and shovels who don’t know that this is an illegal activity. We want to assist people we are calling artisanal miners. We have drafted an artisanal mining policy which will be gazetted for public comments before the end of this financial year. We want to have a specific set of rules that’s customised and where they don’t have to meet the same requirements as the big mining houses. They will have their own processes and we’ll make sure they are regulated. They could contribute hugely to job creation and to the fiscus in terms of taxes and royalties. Does the department have a graduate placement programme? The DMRE has an extensive programme that covers a whole range of skills. Our SOEs like the Council for Geoscience also take graduates and mining companies are giving them experiential learning at their operations. This has been the tradition in the mining sector in South Africa; for example, the new CEO of Kumba Iron Ore, Mpumi Zikalala, started as a bursar and today she sits at the very top of the company. ■ 47 SOUTH AFRICAN BUSINESS 2022

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