Why South African mining has languished — bad laws plain and simple
Bad laws make for bad mining. Or no mining at all. These obvious conclusions come from an intelligent piece written by the Mayor of Cape Town, South Africa. I wish we could force every African dictator to read this piece and then to act to the betterment of their people by applying its insight.
The dictators of this world are not about to read a blog or act on its advice. So all I can do is repeat this paragraphs and leave you to access the piece and read it all yourself.
South Africa has staggering mineral resources. We have the world’s biggest reserves of chrome, gold, manganese, platinum group minerals and vanadium. We have vast amounts of coal, iron, nickel, titanium, uranium, zinc and zirconium. We have among the world’s best miners and mining technology. Yet the global commodity boom of the last six years has to a considerable extent passed us by. Why, with our minerals and expertise, have we not benefited fully from this boom? Why has it not provided more jobs than it should have? The answer is simply the law. The Mineral and Petroleum Resources Development Act (which came into effect in 2004) made mining companies uncertain about their mineral rights. They were not sure whether it was worth their while investing in new mines. So, often they didn’t. During a minerals boom around the world, South Africa lost 20 000 jobs in mining. I invite the student who asked that question to look at the miner who has lost his job and can no longer feed and house his family. That miner is a victim of bad law. Good law would have given him (and many more) a job and his family food and shelter.
2 comments
I cannot say enough about this notion, worth repeating: “BAD LAWS MAKE FOR BAD MINING. OR NO MINING AT ALL” Why, oh, why is it so difficult to understand that in order to develop to its full potential, a country needs positive and effective laws that protect its rights, yet allows for new ventures to be launched. I only wish some governments in Latin America would realize that they are wasting away their people’s resources by maintaining their economy stagnant. Mining is an alternative for many a nations, why then not let it happen? We need better mining laws all over, not just South Africa.
There are only 4 ways to generate wealth:
1. Agriculture - transforming the wealth of the soil to usable produce
2. Value-added manufacturing - Adding value to raw materials or semi finished materials
3. Intellectual property - inventing a new way to do something
4. Mining - taking the minerals out of the earth for the world to use
Countries have to realize that they have only 4 ways to help their people earn a living. By underutilizing their mines, they force the people to make a living in other sectors. The USA (United States of America) will have to learn that when all the manufacturing and mining jobs go away all you can do is pass already generated wealth around from person to person. It is a travesty that the miners and the refiners are limited from this source of wealth. It needs to be carefully and with an vision of protecting the environment, but it needs to be done.
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