Minister Gwede Mantashe: 26th China Mining Conference and Exhibition

Programme Director,
The Minister of Natural Resources of China, H.E Mr Wang Guanghua
Your Excellencies, Ministers and Deputy Ministers present
Your Excellencies, Ambassadors present
Captains of Industries
Distinguished Guests

Allow me to start by expressing our gratitude to His Excellency, Mr Wang Guanghua for inviting us to the 26th edition of the China Mining Conference and Exhibition hosted by the China Mining Association.

Convened under the theme "Promoting Mining Cooperation for a Better Future", the China Mining Conference provides us with an opportunity to: firstly, strengthen our diplomatic ties with the People's Republic of China; and secondly, tell the real story of South Africa and Africa as a premier destination for mining investment.

As President Cyril Ramaphosa stated during the opening of the Forum on China-Africa Cooperation (FOCAC) Summit in September this year, "China has a long history of friendship and solidarity with the people of Africa". Ours is a relationship of cooperation and collaboration. As we navigate through the difficulties of life today, we continue to draw lessons from China's modernisation and development.

Although the 2024 national elections heralded a change of government in South Africa where no party gained an outright majority, thereby leading to the formation of a government of national unity with contending forces, our diplomatic ties with the People's Republic of China remain intact.

Having been engaged in mining for over a century, some key players in the industry began to be sceptical about South Africa's mining industry and branded it as a sunset industry.

Contrary to these naysayers, there is a strong case emerging out of the study on the "State of Mining" and the draft "Critical Minerals Strategy" that the South African mining industry is a sunrise industry, and it remains an attractive investment destination.

These studies are pointing us to the reality that the South African mining industry is diversifying from the gold mining era to an industry with a diverse range of mineral resources that include platinum group metals (PGMs), chrome, manganese, coal, gold, vanadium, nickel, and rare earth minerals that are considered critical for the cleaner world economy.

In 2023, the South African gold mining produced 96 tonnes of gold, thereby placing South Africa as the world's thirteenth (13th) and Africa's fourth (4th) largest gold producer. At least 40% of the gold produced in South Africa gets exported to China, and when we add Switzerland and India, they accounted for 81% of South Africa's gold sales in 2023.

The truth of the matter is that natural commodities are not like a soft drink, where one mixes water and syrup to produce, they are depleting in their nature. The more we mine them, the more they get depleted. The South African gold mining sector is currently undergoing that period which is characterised by deep level mines and heightened safety concerns.

However, on the positive side of the state of mining in South Africa, the PGMs sector is poised to play a catalytic role in the South African mining industry and the economy for the foreseeable future. As the world's largest producer of PGMs, accounting for 73% of the world's platinum, 38% of palladium, and 81% of rhodium, South Africa stands to benefit from the exploitation of these minerals for more than 200 years to come.

With the expected demand for green technologies, hybrid, and electric vehicles, the South African manganese and chrome sectors are also poised to play a significant role in the global automotive and construction industries. As the world's largest producer of manganese and chrome, the demand for these minerals presents us with a substantial opportunity for the South African manganese and chrome sectors to expand, thereby support our drive for inclusive economic growth, employment creation, and poverty eradication.

To enable beneficiation at source and curb the exportation of jobs and profits, we have started discussions with the manganese and chrome producers to promote the creation of value-added products by reducing the export of raw minerals. Included in these discussions, is the need to: firstly, ensure consistent, reliable, efficient, and affordable electricity supply; secondly, sustain commodity linked tariffs; and lastly, introduce incentives and favourable tax policies to encourage beneficiation, including export tax to restrict the export of non-beneficiated minerals.

Notwithstanding these discussions, I can assure you that South Africa is open for investment in the beneficiation of these minerals. As the biggest importer of manganese and chrome from South Africa, and with the largest ferroalloys sector, we urge the Chinese investment community not only to share your insights on the creation of value added products, but to also invest in local value addition to the South African ferroalloys sector. We invite you to join us in unlocking South Africa's mineral potential by creating a thriving, sustainable, and mutually beneficial partnership. Come and introduce cutting edge processing technologies to drive efficiency and local beneficiation.

Given South Africa's global production of vanadium amounting to 25%, and prospects of lithium resources, we further invite you to invest in localising assembly of lithium- ion batteries as well as vanadium redox-flow batteries in South Africa.

To put it bluntly, King coal is back. Whereas there has been concerted pressure by some lobby groups for the world to phase-out coal, in 2023, the South African coal mining sector increased its production and consequently positioned South Africa in the top 10 of coal-producing nations and the fifth largest coal exporter in the world. We have just concluded the first phase of the Carbon Capture, Utilisation and Storage (CCUS) project which will help reduce carbon emissions and prolong the use of coal beyond what is imagined. We wish to invite the investors and coal miners in this meeting to invest in the second phase of the project.

Despite some shortcomings, the South African mining regulatory framework has been stable and predictable since the enactment of the Mineral and Petroleum Resources Development Act (MPRDA) in 2002 and the introduction of the Mining Charter in 2004. It is this framework that has paved the way for the growth of the Chinese investment in the South African mining industry driven by the need for natural resources such as chrome, manganese, copper and gold. We are currently finalising amendments to fortify the areas that have been successfully challenged in court and align the regulatory framework with our socioeconomic needs.

Some of the notable Chinese investments that have been facilitated through this regulatory framework, and continue to contribute to the development of South Africa's mining infrastructure and enhance our production capabilities, include:

• Gold One International investment in the goldfields, and in so doing leading to the revitalization of gold mining activities in the East Rand
• Sinosteel's partnership with Samancor focusing on the extraction and beneficiation of chrome ore, thus contributing to local beneficiation and production of ferrochrome
• Jinchuan Group's investment in Wesizwe Platinum's key project, the Bakubung Platinum Mine which focuses on underground mining of PGMs
• China Minmetals Corporation investment in iron ore projects

One of the key provisions of our regulatory framework is the provision for the development and implementation of Social and Labour Plans (SLPs) as a social license for mining companies to coexist with the communities they operate in, including labour-sending areas. We, therefore, urge shareholders of the mining companies that are operating, and those that are interested in operating, in our shores not to view this as a punishment, but as a necessary intervention to change the reputation of the mining industry from being perceived as a dirty, difficult, dangerous, and deceased industry, and that it is only known for leaving holes in the ground.

Allow me to take this opportunity to report to you that the South African government, working with the private sector, is moving with the necessary speed to eradicate the bottlenecks that have hindered the South African mining industry in the recent past, including challenges with electricity supply and the logistical constraints.

Whereas the logistical constraints remain, for which bulk commodities are paying a heavy price, I can report to you that we have now reached over 6 months without electricity interruptions, and that a number of our coal-fired power stations have been maintaining an Energy Availability Greater (EAF) that is greater than 70%. The National Logistics Crisis Committee (NLCC) is also making significant progress in enhancing the state of our transport and port infrastructure.

We are also making progress in modernising our licensing system to ensure regulatory certainty and the sustainability of the South African mining industry. The first phase of the development of a new efficient and transparent mining licensing system has since been completed, and we are well on course to complete the migration process by June next year.

We have recently established the R400 million exploration fund to support junior miners in their exploration activities, reignite mineral exploration, and accelerate new mineral discoveries. We, therefore, urge the Chinese investor community to contribute to this fund which will play a pivotal role in supporting junior and emerging miners in their projects.

With over 100 years of experience in mining, South Africa is blessed with a skilled and capable workforce that can turn your investments into wealth. Whereas we have introduced visa reforms to attract skills and investment in our economy, the reality of the matter is that South Africa is facing an unemployment crisis. It is against this background that we urge the Chinese investment community to invest in the South African labour market, in particular the lower end of the market where mass employment is required.

In closing, I wish to extend an invitation to you Minister Wang Guanghua, and all delegates to this conference, to visit us in South Africa next year as we will be hosting the 31st edition of the Investing in African Mining Indaba under the theme "Future- Proofing African Mining, Today".

I thank you.

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