Let me take this opportunity to thank you for being with us today to celebrate this major milestone in the life of this new organisation, as we seek to redefine mining in South Africa.
I was reading through the papers last week and was astounded to learn that, according to JP Morgan research summary which was published last week Monday in the Business Day newspaper, Nigeria will overtake South Africa as the economic powerhouse on the Continent by 2016, with Egypt occupying the second position and South Africa the third. What is even staggering is the prediction that says that the Egyptian economy will overtake our economy in year 2025. This is staggering Honourable Minister. I was prompted to ask the simple question; apart from their population advantage, “what else would make these countries’ economies grow faster than ours and overtake us in the long-run?”
I also had the privilege of reading some literature about the so-called growing economies, where South Africa was not included, including the growth markets where our country was also not profiled, and I also asked myself, what are we doing wrong as a country?
However, when you compare the in situ mineral resources amongst those countries that are richly endowed with mineral resources like Australia, Canada, and Russia, our mineral wealth far surpasses those countries. According to a Citigroup report; “South Africa is the world's richest country in terms of its mineral reserves – worth about 2.5 trillion US dollars.” This report ranks Russia in the second place after South Africa and Australia in the third place. Of South Africa's 2.5 trillion US dollars’ worth of reserves, 2.3 trillion US dollars resides in the platinum group metals.
“In dollar values Guinea, South Africa, India, the Ukraine and Kazakhstan are the countries that under-produce the most in terms of their reserves,” states the report. One cannot help it but ask why do we find ourselves where we are? Honourable minister. We are in a strong position; we have the mineral wealth, well-developed infrastructure sector, a manufacturing base, agricultural sector, to list but a few. The question that remains to be answered is: Why are we losing ground so fast?
I think the answers lie in the fact that we have not been able to harness our mineral riches for the benefit of all our people. I understand that the benefits and impacts of mineral resource extraction and processing in South Africa are changing. As one South Africa’s largest export industry, mining brings financial benefits to the nation and whilst our vast endowment of minerals will not be exhausted soon, extraction and production are becoming more challenging. Declining ore grades are indicative of a shift from ‘easier and cheaper’ to more ‘complex and expensive’ processing – in social and environmental terms as well as economic. Declining resource quality has also lead to declining productivity and the energy intensity of processing has subsequently risen significantly over the last decade. However it is also true that a small section of the population has externalised our wealth over the years and this trend continues and is even worse on the rest of the continent. Europe is what it is today because of a huge contribution from Africa and this has gone unchecked for too long and I welcome the establishment of a task team that includes our former President Mbeki to look into this.
The other reason Honourable Minister and distinguished guests is that we believe as Africans that the answers to our problems can be provided by the developed world and best practices from Europe and America, and not through our own hard work and dedication. I am aware that some of our people are complaining about the lack of Foreign Direct Investment, despite an increase from about 1.5 billion US dollars in 2010 to about 4.5 billion US dollars in 2011, according to recent reports. Also institutions like the PIC are managing about 1.0 trillion rand, the IDC manages about 80 billion rands and DBSA manages about 35 billion rands of reserves. The question arises: why can we not vigorously harness and channel a percentage of these towards projects that grow our economy?
This is informed by the fact that, unlike most countries, we have the resources to invest and unlock our mineral reserves, but we are not doing it, seemingly because we believe that it is better for foreign partners to do it for us. One gets the sense that we, as South Africans, feel that our money cannot be risked by investing in projects like Kalagadi because the Stock Exchange provides a safer option. We are our own worst enemies.
We are also glad to see that government realises the importance of partnering with various stakeholders in the economy to drive the developmental agenda and to play that coordinative role, without which a critical component in the equation of growth and development would forever remain missing. This is a role that government is well-positioned to play in order to ensure the optimal mobilisation of our resources.
Honourable Minister and distinguished guests, we started this project with my late husband and other strategic partners more than twelve years ago when there was nothing but a patch of grass on the ground you are standing on. We came here in 2001 and all we had was a firm belief that there was manganese below the surface and that one day, a mine, sinter plant and a smelter will be erected on this site and this will be the first integrated mining project for black South Africans by black South Africans. We totally under-estimated the task at hand, starting from securing of the prospecting licence to the mining right, managing contractors, raising capital, to name but a few.
It has always been a story of David versus Goliath and I have no illusions that it will be like this for a number of years to come, until our name is written in history books, as that company that beat all the odds to be a global giant, led by black African women. Honourable Minister, we have never asked what our country can do for us, but what we can do for our country and we are committed to delivering this project for this country, despite all the challenges, all the jeers and sneers, all the disappointments and broken promises. We owe it to the people of this country to deliver this project and to the future generations of business people to have a reference site, that say Kalagadi Manganese did it, why can’t we do it?
Honourable Minister, this is not a day for speeches, so before I conclude, I would like to share with you some of the achievements we have made so far, perhaps to start with others and leave the final blast to the end.
We employ in excess of 1 600 men and women on our site on a daily basis and 70% come from this community – we do not only talk about job creation honourable minister, we act; We have raised a debt package in excess of 5.0 billion rands from the local banks and development finance institutions and 2.0 billion rands from overseas development finance institutions and export credit agencies;
In respect of logistics and infrastructure, we are in the final negotiations with TFR on rail and port allocations, Eskom will be switching the 35 MVA required to power the sinter plant in July and Sedibeng Water has committed to the necessary water resources;
We have spent in excess of 3.0 billion rands equity to get the project to where it is currently, that is our shareholder money; and As you can see, we have made significant progress on our commitment to beneficiate by building the sinter plant with an overall progress of 75%.
This has not been a plain sailing and we expect that the journey ahead will be challenging, but with all your support, we shall succeed in achieving the dreams of our fore-bearers, including my late husband.
Honourable Minister and distinguished guests, what has brought us here today is a milestone, a celebration of a great achievement. The significance for us is multi-fold - we are celebrating reaching the bottom today, 300-odd meters below the surface and not the top or the summit. What this means is that we can only go up from now onwards or that the manganese can only come up, 300 years of mining, up, onto the surface.
Honourable Minister and distinguished guests, we have now reached the final stage of the shaft sinking activity of the underground mine shaft and today’s blast will signal the final shaft-sinking blast. The next time you hear or feel blasting on this site, you will know we are in production, and that is not too far away. Honourable Minister and distinguished guests, I am proud to announce that all this was achieved without a single fatality. Just under 4 million man hours of shaft sinking without a single fatality!
This is a great achievement and I would like to thank a number of teams for assisting us to get here:
- The Kalagadi team – without you, we are nothing;
- The GLTA team;
- The METS team;
- All subcontractors on site;
- The DMR, for having faith in us and entrusting us with a mining licence;
- My fellow shareholders and the Board of Kalagadi;
- The Municipality and Northern Cape Provincial Government;
- Eskom, for providing us with sinking power;
- Sedibeng Water; and
- My family, for providing me with all the support to carry on, even after the tragic death of my husband. My children, my rock.
- The greater South Africa that made us who we are.
Malibongwe igama lamakhosikazi! Malibongwe!
Wa thinta abafazi, wathint’ imbokodo!
Private Sector for Development: How private investments have helped mining sector growth
Today’s widely accepted thesis that the private sector is a key engine of economic growth stands in stark contrast to the model that most post-colonial African countries adopted during the early years of their independence. The model adopted by most of these countries at that time predicated the economic growth and development prospects of these countries on the public sector playing the central role. However, these countries faced a number of challenges which became pronounced in the 1980s with the fall of commodity prices, leading to extended economic hardship.Read more...
Memorial Service - Nelson Rolihlahla Mandela
Memorial Service for the late first President of a Democratic South Africa Nelson Rolihlahla Mandela: Bryanston Methodist Church December 11, 2013 By Daphne Mashile-Nkosi
Programme Directors, Reverend Gamede, Esteemed Members of the Clergy, Executive Mayor of the City of Johannesburg, Presidents of the Black Business Council, Business Unity South Africa, and Afrikaanse Handels Instituut, Ladies and gentlemen, Fellow mourners:Read more...
$202 million Secured with AfDB
Cape Town - Mining Indaba: In a move that will see the Kalagadi Manganese project realise it’s full potential, a R2.2 billion loan is received from the African Development Bank (AfDB).
The African Development Bank (AfDB) group CEO Haldara Alhassane revealed that the women-led project forms part of their development and upliftment agenda for Africa.Read more...
DA misleads the public with baseless allegations against Kalagadi
Johannesburg, 19 February 2014 - Kalagadi Manganese has noted with concern the damning allegations made by the Democratic Alliance (DA) that the Public Investment Corporation (PIC) has approved funding for its projects as a result of political connectedness.
This comes after the DA’s Shadow Minister of Finance David Ross announced on Sunday, 16 February 2014 that the party had requested the Public Protector to investigate ‘the use of pensioners money to bankroll worrisome investments’.Read more...
Manganese Analysis: September 2012
The mining industry accounted for 8.8% of GDP on a nominal basis in 2011. In that same year, the mining sector grew by 0.2% after declining by 5.6% and 5.4% in 2008 and 2009, respectively. Real mining GDP recorded in 2011 was R99.4 billion, which was smaller than the pre-crisis figure of R105.3 billion recorded in 2007.Read more...