South African Business 2020 edition

SPECIAL INTERVIEW

SPECIAL INTERVIEW FEATURE Roger Baxter, CEO BIOGRAPHY Roger joined the Minerals Council SA (then Chamber of Mines of South Africa) in 1992 and was appointed CEO in 2015. With a BCom (Hons), he has 27 years of high-level advocacy and strategy experience in the business and mining sectors. He was involved in the first mineral policy discussions with the ANC in 1992 and has participated in (and often led) discussions on all aspects of mining, economic, investment, transformation and tax policy with government. Developing partnerships and strategies to grow the mining industry The CEO of Minerals Council SA, Roger Baxter, explains why confidence in the South African mining sector is growing again. How would you describe the state of mining in South Africa at the moment? It went through a particularly difficult time in the several years until 2017, both because of the poor state of the commodity markets internationally and the corruption and other governance issues in South Africa. Today there is improved confidence because of improvements on both scores. However, there is more work to be done. Specifically: • The better Mining Charter published in September 2018 still contains a few issues of concern. • The withdrawal of the MPRDA Amendment Bill is positive. But a set of new amendments is required to fix a few issues. These include section 11 procedures (regarding the transfer of rights) and turnaround times for new mining and prospecting right applications. • The carbon tax is potentially a highly negative factor, which will not improve the country’s already adequate decline in carbon emissions but will have an impact on investment and jobs. Is there more certainty about the Mining Charter and legislation than there was a year ago? There is more certainty. And the Minerals Council and its members are comfortable with the bulk of its contents. However, there are three key unresolved issues that are the subject of continuing engagement with the Minister and his department. The Minerals Council has also initiated legal action in this regard should it not be possible to resolve them. The main issue regarding is non-recognition of continuing consequences of previous transactions in respect of the renewal or transfer of mining rights (the so-called “once empowered, always empowered” principle). What are the consequences for mining of the drive towards renewable energy? The Minerals Council and the industry are very conscious and sup- SOUTH AFRICAN BUSINESS 2020 44

portive of the need to address the issue of climate change. In South Africa, the issue is particularly relevant, given the country’s high proportion of coal-fired power generation in the energy mix. Our research indicates that that will change over time to a cleaner, less carbon-intensive one both naturally and as a result of targeted and deliberate efforts. The older, less efficient power stations will see their lives come to an end, as the newer, cleaner Medupi and Kusile take up a greater share of the load, as will renewable energy sources. Many of the older deep-level gold and platinum mines, which are more energy-intensive, are gradually reaching the ends of their lives. As a consequence, mining’s aggregate energy consumption and carbon emissions are declining. We advocate a just transition to a lower carbon energy economy. We believe that this transition will take time. One serious challenge are the significant hurdles faced by mining companies that attempt to put in place alternative power projects. There is a huge amount of red tape in the way of bringing renewable energy cogeneration projects online. Is a strategy being developed for coal miners in a post-coal future? Coal miners are developing a variety of strategies. However, these are largely based on a recognition that in the transition to a lower carbon intensive economy, we cannot destroy what we have as a country – an established coal sector with 33-billion tons of coal resources. In 2018 the sector employed almost 90 000 people (representing about 19% of total employment in the mining sector), with an estimated 180 000 further people employed as a result of coal mining activities. The coal sector is a significant contributor to the South African economy. SPECIAL INTERVIEW FEATURE electric vehicle market share growth. The partnership needs to develop: a platinum reserve asset strategy; a national platinum fuel cell strategy; market development in jewellery; and a national strategy to drive investment demand for platinum. What is driving the large investments in the Northern Cape? The Northern Cape has large economic reserves in industrial metals, most notably zinc and copper, that we believe can be a foundation for that underdeveloped region’s broader economic development What other minerals are showing promise? Other PGMs, notably rhodium and palladium, are performing particularly well. As stated, coal still has potential and iron ore is performing well. What are the priorities of Minerals Council SA? Our main broad strategic goals are to: • Create an enabling policy, legislative, regulatory and operating environment for a successful mining industry • Support members in implementing a positive contribution model for South Africa and its people • Demonstrate progress by the industry on transformation, social and environmental imperatives. Website: www.mineralscouncilsa.org.za Please outline your strategy with regard to platinum’s future. Develop strong and focused partnerships between key stakeholders and role-players, including all relevant government departments. There is a need to identify the opportunities for short-term interventions aligned with long-term strategic goals, including market development in all platinum and PGM demand segments and a specific focus on fuel cell Minerals Council SA is putting its money where its mouth is with regard to alternative energy sources. The 100kW natural gas baseload fuel cell that powers the council’s offices in downtown Johannesburg is the only fuel cell of its kind in Africa. The fuel cell was made by Fuji Electric. 45 SOUTH AFRICAN BUSINESS 2020