By James Hall
JOHANNESBURG, Sep 20 2002 (IPS)

û Mining, which a century ago became the foundation of the modern Southern Africa economy, is going through an upheaval as countries rewrite their mining policies, leaving national currencies trembling and investors nervous.

Tens of thousands of workers have lost their jobs as ageing mines inevitably run out of minerals. But new mining technology promises to revitalise other closed mines, and to open previously inaccessible areas for prospecting.

ôMining is still vitally important to Southern African nations,” geologist Sam Ndwandwe with the Swaziland Bureau of Mines told IPS. ôBotswana is a stable democracy because of its diamonds. Johannesburg is still ‘Egolde’ û where the gold is û the place where migrant workers from all over the region seek jobs in mines. Mozambique is pinning its economic recovery hopes partly on the revitalisation of its mining sector. Even Swaziland is hoping to use new extraction technology to reopen mines closed for 80 years.”

All the nations mentioned by Ndwandwe are redrafting or reconsidering their mining policies.

The importance of mining in sub-Saharan Africa’s most vibrant economy, that of South Africa, was manifest in the market reactions to a leaked draft of the Mineral and Petroleum Resources Development Bill last month. The bill, which is under review by government and private stakeholders, seeks black control of new mining ventures within the next ten years. But the draft document’s timetable and the percentages it suggests for black management and ownership unsettled foreign investors, who sold about R6.3 billion in domestic equities in one week, causing the Johannesburg Stock Exchange to fall and the rand to lose 10 percent of its value.

One U.S. dollar is equal to 10. 51 Rand.

Angry officials with President Thabo Mbeki’s administration this week called for more stringent press controls, citing the damage caused by the leaked draft mining bill. However, journalist groups responded that government simply wants to crack down on its critics in the press, and is using the mining bill story as an excuse.

Mining industry officials are cooperating with government on the bill. At a public parliamentary hearing, they submitted that minimal requirements to acquire prospecting rights would ease the way for new investment in the nation’s mining sector

The Diamond Development Group said it wants mining rights to be bankable so that black empowerment companies and other newcomers to the sector might use them to raise capital. The group is composed of old and new mining firms, such as De Beers, Falconbridge Ventures, Mvelaphanda, Nabera Mining, New Diamond Corporation, Petra Diamonds, Southern Era, Rex Diamond Mining Corporation and Trans Hex.

The group objects to the bill’s insistence that mining companies seeking prospecting rights produce a ôsocial plan” aimed at improving the local community where work would be conducted. The group of mineral companies feels the requirement puts too great a burden on fledgling mining firms that may be doing small-scale prospecting of limited duration, and cannot make such long-term and costly investments in community improvements.

To further encourage new mining investment in the country, the group wants government to assume custodianship of mineral resources, which government could then make available on easier terms to small black-owned companies.

ôThis is critical both to the continued expansion and development of mining in South Africa and to wider ownership of mineral assets,” said the Diamond Development Group’s statement.

Meanwhile, efforts by South Africa’s government to encourage local communities and black empowerment groups to enter mining operations has led to the application by the mining company Mogodumo Resources for platinum mining rights in the Mogodumo area. Twenty-five percent ownership of MKP Resources belongs to members of the Mogodomo community.

In Swaziland, the latest findings of a geological survey of the country conducted by the Bureau of Mines has located deposits of copper, nickel and chromite in the Sipocosini area 100 kilometres south of the capital Mbabane.

ôThe full extent of these discoveries has yet to be determined, but the base metals exist in quantities that make extraction a commercially viable mining option,” said Richard Maphalala, senior officer at the Ministry of Natural Resources.

A special package of tax incentives is being prepared for foreign investors in Swaziland’s mining sector, said natural resources minister Magwagwa Mdluli.

ôThere are closed mines in Swaziland that still have great profit potential. The first geological survey of the country since colonial times will be finished this year, and will indicate promising areas for mineral prospecting,” said Mdluli.

Mdluli said cabinet would consider placing mining operations in a special tax bracket of 10 percent offered to priority industries that government wishes to encourage. The normal corporate tax rate is 15 percent.

Swaziland’s mining sector was diminished with the recent closure of its oldest active mine, the Bulembu asbestos mine.

ôAsbestos fibre in Swaziland has been mined out,” said mine manager Trevor Mulroney. Only coal and quarried stone are still mined in the country.

Mulroney had hoped to reopen the diamond mine at Dvokolwako, closed since 1997 when open cast excavation was finished. Government is encouraging investors to dig shafts into diamond veins. A Canadian firm has applied for a license to do so.

Canadian, Australian and American mining companies have been in Mozambique to set up offices in preparation for prospecting and the application of mining licenses. One indication that licenses will be approved is government’s commitment to overhauling the rail infrastructure that serves the Tete province and other areas where mining will occur. Some mines are being reopened after decades of closure due to the country’s 25-year civil war. Other minerals can now be extracted thanks to improved technology.

Such technology was on display earlier this month at the World Summit on Sustainable Development in Johannesburg. South Africa’s Council for Mineral Technology (Mintek), a government agency under the natural resources ministry, profiled new environmentally friendly technology at the so-called Earth Summit.

Presentations showed how mining could be more efficient and productive by using ôgreen technology” that requires less use of precious water and damaging explosives.

Because a lot of small-scale mining in the informal sector that is currently going on can damage environments, some of the technology demonstrated was designed for use not by big firms but by communities, who are targeting mining in their poverty alleviation efforts.

Excerpt: