Speaker and Deputy
Speaker of the National Assembly, Chairperson of the NCOP, His Excellencies, the President and Deputy President of the Republic, Chief Whip of the Majority Party, the ANC, hon members, ladies and gentlemen, with the performance of our economy at the centre of attention, requiring all our efforts to turn things around to realise our aspiration to grow the South African economy together, the President enjoins us to be prepared to go where we have never been before. That is why it is confusing members to my left - because the President is enjoining us to be prepared to go where we have never been before.
The economy contracted by 3,2% in the first quarter of this year, with mining contributing 0,8% of that 3,2%, to the overall decline, falling by 10,8% as the sector, energy declining by
6,9%, that is contributing 0,1% of the 3,2% of the Gross Domestic Product, GDP, decline.
Mining production data released by Stats SA earlier this month indicated that, compared with the first and fourth quarters of 2018, production of many commodities declined in the first quarter of 2019. What is the biggest contributor to this negative growth? It was load shedding. Because every time we have load shedding, a mine produces at the maximum of 70% of its capacity.
The second one is the price of electricity, and the third one, was the five months strike of Association of Mineworkers and Construction Union, Amcu. Therefore, it becomes important for us to put our efforts in turning - not only mining around but the energy sector in general and the electricity generation, in particular. This is a harsh reminder to all of us that primary sectors of the economy are important to build the future and modern sectors. We all focus into the future digitalisation and everything that is modern. But if we are going to reach there, we must strengthen the primary sectors of the economy.
Against this backdrop, Prixley ka Isaka Seme had this to say:
"Justly the world now demands-Whither is fled the visionary gleam Where is it now, the glory and the dream?"
He talks to the dream that seems to confuse members to my left that to them dreaming is an abstract concept. But President Thabo Mbeki again tried to put this more clearly when he said:
"Trying times need courage and resilience. Our strength as a people is not tested at the best of times, we should never become despondent because the weather is bad nor should we turn triumphalist because the sun shines."
The situation that is facing us as the country in respect of the economy requires us to appreciate that we need to have courage and resilience. We should not be triumphalists only when the sun shines. Because we will make that sun shine.
As we implement the election manifesto in this sixth Administration, we are ever mindful of our tasks. Our economy still depends to a large extent on the minerals and energy complex for its growth and development. These sectors will continue to play a significant role in the future of the economy. Merging the two portfolios under one Ministry enables more attention and focus on them and greater policy alignment, for certainty to the sector and the greater economy.
We remain highly attractive for investment in mining, despite the fact that... I can see the cynical ridicule laughing. It is fine when you don't know, you don't know. If you don't know, you simple don't know. We remain highly attractive for investment in mining. To improve its overall performance, we must return it - particularly, to the major mineral groups, to growth trajectory.
For the period 2018 to 2020 there is an estimated 60 mining projects in the pipeline with an estimated investment value of R110, 1 billion and projected employment of at 32 000 employees. Of these, ten are exploration projects, 26 are expansion projects, twelve are new mining development projects, four are
new processing plants and four sustainability projects to extend the life of mines, while the remaining balance of five are still unspecified.
Integral to investment attraction, the Council for Geosciences' mapping programme is critical to identify and affirm new mineralisation systems that are consistent with the new demand trajectory of mineral resources, such as battery minerals. The programme aims to secure a minimum of 5% of the global exploration budget within the next three to five years.
In 2018/2019, non-ferrous metals and minerals production grew by 9,4%. I am highlighting this point because despite the decline in mining production the smaller mineral groups continue to grow. It is your gold that is in decline because it had been mined for more than 130 years, it is platinum and iron ore. But if you go to these minerals that assist to move towards cleaner energy options, and the sector must position itself to take advantage of this opportunity presented. The employment numbers that were released earlier today give early signs that are positive, in the sense that jobs numbers have increased by 22
000 in terms of official statistics released today. Of those, 6 000 are in mining. Most importantly, we must urgently address the reliability of electricity supply to support our growth ambitions.
Our key priorities on energy are the following. Firstly, on top of the list is ensuring energy security of supply through long- term planning. That is why the amount of money that the president committed to revive Eskom is so important because if we can't ensure that security of supply of energy, the economy is going to pay a big price. Secondly, it is lowering the cost of energy. Thirdly, it is the development of new energy delivery models. Energy storage technology will make renewable energy coupled with storage, a viable option going into the future. This will replace the traditional power stations. However, what is important is to ensure that we must never destroy what we have because we dream of having something new into the future. That is why it is important that a balanced approach to our energy supply is important.
Working towards the country's energy mix options, we must move away from the polarized views because our energy debate should not be renewables versus coal. It is the availability of various options to supply energy and ensure that there is security of energy supply in the country. The best way is to find the best balance for our requirements to grow the economy and guarantee development by ensuring security of energy supply along with obligations to address climate change considerations.
The Integrated Resource Plan 2019 will outline our primary energy requirements in respect of coal, nuclear, gas and other energy minerals, plus solar, wind, biomass and regional hydropower resources. To ensure investment in the required energy infrastructure, including power plants, refineries, pipelines, transmission and distribution wires, storage facilities for oil and gas, we must ascertain that all the enablers thereto, particularly legislative and institutional arrangements, are in place.
The mining and energy sectors present a huge potential for exploration, production and beneficiation. For this reason, the
restoration of a stable and predictable policy and regulatory environment is a priority. Uncertainty that delayed the development of the mining industry was removed with the finalisation of the Mining Charter. And the separation of petroleum from the regulatory framework governing traditional minerals, that legislation will come before Parliament early this year.
The process of developing a Petroleum Resources Development Bill, which will in due course be subjected to public participation, Cabinet and parliamentary processes, is underway. The Bill will further provide regulatory certainty to the upstream petroleum industry and stimulate growth and development in this sector. We are convinced that if we develop petroleum into a fully fledged sector will add impetus to the growth of the economy. We are convinced about that. All we should make sure of is to do what is in the best interest of the country.
Mineral beneficiation is critical to industrialisation. We must address, amongst others, the matter of high administered prices to trigger growth and development of the economy. Administered
prices are prices that are within the control of the state. Be it electricity, be it rail and port. It is incumbent up on us as the government to use administered prices to trigger growth and development in the economy. We have control over that.
This is with the intention to reverse the current situation, where the bulk of our chrome and manganese resources are beneficiated in Asia. Despite the increase on the tariffs, bulk of our chrome and our manganese is beneficiated in Malaysia in particular and Asia in general because of the price of electricity. Therefore, we have a duty to intervene with administered prices.
Honourable members, post our national general elections, journalist Palesa Morudu wrote in the Business Day 17 May 2019:
"Last week's 57% win by the governing party was met with a grudging sigh of relief from the gatvol nation-relief that the polls were over, that it could have been worse. South Africans, once again, held it together and broke with the global trend that is embracing greater extremes. So, here
we are again. The voters have provided a corrective to some of the South African's worst excesses. But time is running out. The possibility of building a nonracial, democratic and prosperous South Africa based on equality for all and the rule of law has not been extinguished. Much depends on what government does over the next year."
In response to Palesa and all South Africans, in the July 2019 Budget Vote debates, we will further outline the details of our plans for growth and the minerals and energy portfolio, how they can make a positive contribution to the economy, eradicate poverty and create employment and equality in our society.
Mr President, I can assure you that we are committed to take the command and do what we can do to contribute to the economic growth and positive development of our country and our economy. Thank you very much. [Applause.]