JOHANNESBURG (miningweekly.com) – The South African economy could no longer afford the damaging “blame game” under way in the crucial mining sector, which needed to take urgent steps to prepare for the inevitable next commodities boom, Energy Intensive User Group chairman Mike Rossouw said on Wednesday.

Speaking during a national radio debate on SAfm's AMLive, hosted by Dhashen Moodley, Rossouw described South Africa as being “100% dependent” on mining to grow and transform its economy in that the country’s secondary and tertiary sectors were totally mining dependent in some cases and largely dependent in all cases.

The current mining decline was worsening South Africa’s already negative balance of payments at a time when the country needed money to grow and transform.

“We really need to understand mining’s role as a dynamo of the South African economy,” Rossouw added, to support from former Anglo American South Africa head Kuseni Dlamini, who called for recognition to be given to the mining industry’s advances on virtually every single front.

Rossouw said it was no longer helpful to deny the ascertainable facts of mining’s indispensible economic role.

“Firstly, let’s get the big facts on the table so that we don’t ever have to waste our time debating them again.

“Secondly, let’s decide where we want to be and by when, and thirdly, let’s agree the solutions and then damn well implement them,” Rossouw said, on the day that the amendments to Deputy President Kgaleme Motlanthe’s draft framework agreement on sustainable mining are due in.

Earlier, Dlamini, who is also a former CEO of the Richards Bay Coal Terminal, said that South Africa needed leadership that united the country around a compelling sense of common purpose and, with an eye on a positive rebound of the commodities cycle, for government to create an enabling environment.

“We’re unfortunately far from the main global markets so we need to make sure that our railways system works very well and we need to ensure that our ports are also jacked up so that we have our act together for the next commodities boom.

“When the last commodities boom was in full swing, we didn’t have our act together, and as a result we missed out. This is a strategic opportunity for us to prepare ourselves for the next boom,” said Dlamini, recalling that Citibank found South Africa’s $2.5-trillion minerals endowment to be the world’s greatest by far, well ahead of Russia's and Australia's.

He called on the country to take steps to unlock that potential wealth to its fullest to drive job creation.

For South Africa to have such high unemployment while sitting on such potential wealth was inexcusable.

Rossouw said that South Africa was not doing itself a favour by failing to prepare for the boom through getting costs under control and elevating people relationships.

“What we can’t afford anymore is the blame game. We must end it,” added Rossouw, who also chairs South Africa’s Energy Intensive User Group.

Their comments came as Lonmin announced the postponement of Wednesday’s scheduled Commission for Conciliation, Mediation and Arbitration meeting with the Association of Mineworkers and Construction Union (AMCU) over union recognition.

Lonmin agreed to an AMCU request to delay the talks until July 29 in order to allow the Deputy President-convened government, business and labour engagement to take its course.

Lonmin said that it remained committed to concluding a new union recognition agreement with AMCU as the majority union at its mines.

The Deputy Presidential spokesperson Thabo Masebe has told Mining Weekly Online a small team would deal with any submitted changes to the draft agreement.

That would then be followed by a signing ceremony, which would probably take place next week.

The June 26 ratification deadline was set on June 14, after the who’s who of South African mining met to draw attention to the urgent need for the rule of law and for peace and stability to return to South Africa’s troubled mining sector.

Against the background of the so-called turf war between AMCU and the National Union of Mineworkers, government, labour and business have undertaken to meet quarterly over the next 12 months, or as frequently as required, under the Deputy President’s leadership, to ensure common action to address blockages and to deal with new issues.

There is broad consensus on the need for the industry to be repositioned to become attractive to investors and to contribute more meaningfully to job creation.

The who’s who present agreed to respond to the immediate poor economic situation in mining and identify long-term policy measures, including creating certainty in sector regulations and tax policy and accelerating the implementation of human settlement intervention measures to ensure that there is proper mineworker housing.

The Deputy President has committed government to ensuring that its legislative and regulatory programmes provided predictability and certainty for mining.

Meanwhile, Anglo American CEO Mark Cutifani, himself an Australian, on Tuesday accused the Australian government of undermining the potential benefits of the mining boom for Australians, with its cavalier disregard to investment.

Cutifani added that the outlook was grim globally for mining as companies adapted to lower prices and weakening demand.

“It does look pretty grim, certainly for the thermal coal industry,” Cutifani told a mining industry forum in Canberra.

Anglo American is cutting jobs and halting production at its Aquila coal mine in Australia’s Queensland, while Glencore Xstrata, the world’s largest exporter of power-station coal, is shedding staff at its Ravensworth mine in New South Wales.

Peabody Energy, the largest US coal company by sales, is cutting 450 contractors in Australia, and Rio Tinto, the world’s second-largest mining company, has cut 40 managers and senior staff at its iron-ore division in Western Australia, as it seeks to reduce its costs by $2-billion.

In the past 12 months, nearly 9 000 mining jobs have been lost in New South Wales and Queensland, a number that is expected to increase with the coal price falling to $77/t.

The Australian government is being urged to create a coherent plan to counter the losses.