22 April 2010

Honourable Speaker,

The IFP is very pleased to see that the Mining Department has been able to retain most of its staff members. The Department is currently faced with some serious challenges and they will need all of the support that they can get in order to overcome them.

One of these challenges is being able to cope with a budget that seems insufficient to the task at hand.

Within the industry itself we have the following concerns:

Small Scale Mining

We support the idea of small scale mining projects as this is an excellent vehicle for allowing disadvantaged communities to enter into the industry.

There are however a few obstacles to this process which must be overcome, the most notable being the obtaining of the necessary finance in order to start up such an enterprise. Most small scale miners have little difficulty in acquiring the requisite prospecting licence, it's the next step, namely that of obtaining finance that hinders them from entering the industry as finance houses are loathe to grant money to what they deem a high risk start-up. This leaves the small scale miner with no other alternative than to seek private finance. The problem with this is that most private financiers require exorbitant returns on investment and/or shares in the start-up business and this results in the license holder being sidelined.

The IFP would like to see a greater involvement from the Department in respect of providing or even sourcing technical and financial support for small scale mining individuals.

Beneficiation

Beneficiation of our natural resources must begin as soon as possible. It is an issue that we have skirted around for far too long. It is a big step, but its rewards for South Africa will be just as big. It will create employment and boost the mining sector thus greatly benefiting our economy as a whole.

International Investment

International Investors must be encouraged to invest in our mining sector. A favourable climate must be created, one that lends itself to South Africa being chosen as the investment destination of choice. Loose talk by certain individuals advocating nationalization does not inspire confidence with International Investors and will not assist us with attracting investment into our country.

Illegal Mining

Illegal mining operations are another area of serious concern, not only because of the many injuries and fatalities that occur, but also because of the fact that this unlawful activity is openly financed by certain individuals who seem to operate above the law and without fear of any criminal sanction . Where are the police? Without finance and/or market demand these practices would cease to occur. Our country has one of the top gold and diamond policing units, why are they being so ineffective in curbing this illegal industry?

Sustainable development in the mineral and mining sector as well as the creation of employment should be our key focus at this economic juncture.

Our country has great mineral wealth which can and should play a significant role in our rapid emergence from the current global economic crisis.

The IFP supports the vote.

I thank you

Contact: Eric Lucas MP, 082 557 2481.