[miningmx.com] — GOVERNMENT’S job growth target for the mining industry, as set out in its New Growth Path (NGP) document, would not be pie in the sky should previously identified infrastructure constraints, regulatory issues and skills shortages be addressed properly.
Chamber of Mines economist Roger Baxter said on Wednesday there was a great deal of resonance between the NGP document, released on Tuesday by Economic Development Minister Ebrahim Patel, and the process started by the mining industry growth, development and employment task team (Migdett) in 2008 to realise the full economic potential of the industry.
The NGP, with the creation of jobs as its central theme, targets the creation of five million jobs in all sectors by 2020. The mining industry alone has been earmarked to contribute 140,000 jobs to the plan, based on projections by the Industrial Development Corporation.
It identified the enhanced export of platinum group metals and coal as the mine driver of job creation, as well as refocusing on beneficiation as opposed to smelting or refining. The plan also stated that a developmental state mining company would coexist with the private sector, which would be the key driver of growth in the sector.
“South Africa’s mining sector has already gone through a very thorough review process,’ said Baxter. “The tripartite stakeholders (industry, labour and government) have for long time been trying to understand why the country’s mining sector hasn’t made the most of the last commodities boom and just really unpacked what the competitiveness issues are. That included looking at what the real economic potential of the sector is.’
He said estimates showed the non-gold mining industry could grow by between 3.5% and 4% per year for the next decade, with overall growth in the sector at 3% to 3.5% per year over the period.
“The conclusion was that the mining industry could add another 100,000 direct jobs to the economy, based on a conservative growth scenario, on the assumption it operates in an unconstrained environment.’
Baxter added that for every one job created in mining, another is usually created in related industries.
However, the issues Migdett identified as constraints on the industry resurfaced in the NGP document. These are infrastructure constraints (including electricity supply and rail services), regulatory issues and skills shortages.
The NGP document lists the review of the regulatory framework, identifying the main blockages to beneficiation and the development of a 10-year strategic plan for electricity, logistics and skills (as far as these issues relate to mining) as core actions that need to be taken.
Trade union Solidarity’s Paul Joubert said the NGP lacks detail on how targets would be reached or challenges overcome. “It is good that the plan for instance acknowledges skill shortages as a problem, but it has been said many times before without any steps being taken to practically overcome the problem,’ he said.
According to Baxter, the coal industry alone would need an additional 500 mining engineers to realise supply for the expected demand of about 100 million tonnes over the next 10 years.
Joubert said the NGP document also doesn’t specify whether the 140,000 jobs target includes downstream beneficiation industries.
“The figure is somewhat over-optimistic if it points to direct jobs only,’ said Joubert. “Sudden price shocks can have a dramatic effect on operations, while costs and South Africa’s deeper shafts make it difficult to operate labour intensive mines.’
