Ramphele calls for a mining industry for the 21^st century

Cape Town 06 February 2013

“These are difficult times to be in the mining industry”, said Goldfields Chairman and social activist Dr Mamphela Ramphele, addressing delegates at the Investing in African Mining Indaba™ in Cape Town.  Reflecting on the past year, she said: “At that time – during the 2012 Mining Indaba- the mining sector was already in the midst of the rising tide of resource nationalism and anti-mining sentiment. That sentiment has grown stronger world-wide.” She said that in South Africa particularly, the Marikana tragedy and other violent incidents of the past year are symptomatic of “conflicts over scarce resources in our social relationships.”

She lamented the fact that in many cases the benefits of high mineral resource prices have not benefited the majority of citizens. She cited some exceptions, particularly Peru and Norway. “The Norwegian model is as close to the ideal model as possible, where 40% of revenue –from the country’s resources - is used for government expenditure and the rest is used to develop other sectors in the economy.”

Ramphele proposed a completely different model for what she termed “the mining industry of the 21^st century,” for an industry that can be both “a catalyst and an engine of growth in both advanced and emerging economies.”

She said that the extractive mining models in most countries are being challenged on many fronts. “Extractive industry modes are by their nature unsustainable, given their failure to invest in innovation and creativity to enlarge the resource base and to allow new entrants to bring renewal to the industry.”

She said that it is “morally wrong” for economic and political elites to think that they can continue to benefit exclusively from mineral and natural resources, which is  bound to lead to civil conflict which is bad for everyone including business.”

She said that the industry needs to evolve to a “clustering of mining, agriculture and manufacturing using all available resources of the mine, from land to energy and waste like rock refuse and tailings.”

Ramphele said that the time for a simplistic business approach was over, that the interconnected nature of economics, social and political systems fuelled by rapid information technology knowledge and information dissemination makes it unsustainable.

She called for “modesty on the part of governments” in an effort “to minimise the risks of conflating governing party interests, government’s role as a regulator and the state as the custodian of inter-generational long-term interests of the society as a whole.”

 Ramphele urged the private sector to not only be accountable to shareholders, but to also take into account the “shared long-term interests of sustaining the industry in the challenging environment of the 21^st century.” She also urged business to speak out, saying: “Silence in the face of abuse of power on the part of governments tends to come back to haunt industry players.”

Labour also came in for criticism, with Ramphele urging workers and their representatives to adopt “a longer term view beyond annual wage increases.” She says labour unions should focus on being more productive and promoting innovation in order to guarantee sustainable and rewarding jobs.

Partnerships have been a major theme at the Mining Indaba, with most speakers, including Mineral Resources Minister Susan Shabangu and Anglo American Chief Executive Cynthia Carroll, focusing on the concept. Ramphele weighed in as well, saying that partnerships that benefit society, including future generations, need to be forged.