Updated: Wed, 06 Feb 2013 12:32:48 GMT | By Sapa

Ramphele Calls for Shift in Mining Model

Sustainable mining is the only future for South Africa, Gold Fields chairwoman Mamphela Ramphele said on Wednesday.


Mamphela Ramphele (© Gallo Images)

"We have to accept that the traditional way of mining in SA, with its reliance on cheap and low-skilled labour, is over. You better get used to it. It is not sustainable," she told Mining Indaba 2013 delegates in Cape Town.

"The tragic events of Marikana and protests by agriculture sector workers... are a wake-up call, alerting SA to the many time-bombs waiting to go off."

Ramphele was referring to a strike at Lonmin's platinum mine in Marikana, North West last August.

Thirty-four mineworkers were shot dead and 78 were wounded when police opened fire while trying to disperse a group of protesters gathered on a hill near the mine.

In the preceding week, 10 people, including two policemen and two security guards, were killed.

She was also referring to violent protests by striking farmworkers in the Western Cape demanding a R150 a day minimum wage.

Ramphele said these incidents were the "legacy of the past" coming home to haunt the country.

Mining revenues were not being shared equitably.

"For the most, mining tax revenues vanish in the black hole that is the central fiscus and end up becoming large rural estates for presidents," she said.

There were also increasing signs of the "Dutch Disease", a term used to describe the increase in exploitation of natural resources and a decline in the manufacturing sector.

"Unfortunately, SA has sustained an extractive system that started with mining and energy companies but now includes monopolies in many other sectors... managed by large and powerful, and not very necessary, not very effective, and not efficient parastatals."

Turnaround was possible, if industry leaders engaged in what Ramphele called difficult conversations.

"We often avoid difficult conversations because we believe the business of business, as one CEO told me, is to make money regardless of the socio-political environment."

The mining industry had to change its business model.

"[This can be done by] evolving mining from a core business focused on the extraction of resources and export thereof, to a clustering of mining, agriculture, and manufacturing, using all available resources of the mine."

Ramphele said unions should be at the forefront of promoting innovation and productivity, taking a long-term view beyond annual wage increases.

Union leaders had to close the gap between themselves and workers to avoid being seen as part of the elite.

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