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SA Mining Columns

Pursuing Compliance And Collaboration In Tough Times

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Tough economic conditions are forcing mines to reduce costs, but compliance burdens are becoming heavier. Something has to give, unless there is more constructive collaboration between the private sector and government.
Roger Dixon, SRK Consulting
By Roger Dixon from SRK Consulting

As consulting engineers, we can see the pressure that mines are under to procure services at the lowest possible cost. This can create a further risk issue if the cost-cutting affects the quality of advice they receive or leads to certain key areas – such as pit-slope design and monitoring – not getting the attention they deserve.

The fact is that compliance requirements, while a necessary part of keeping mining safe and responsible, usually add to the overall cost of mining. Government, then, has the difficult job of balancing the demands of compliance with the creation of conducive conditions for job-creation and mine viability.

So it is heartening to see the National Development Plan being given some effect in the country’s 2014-2019 medium-term strategic framework. One of the commitments under this framework is to streamline regulatory processes, for instance in the granting of mining and water licences, as well as environmental impact assessments.

It also commits government to assess the regulatory impact of laws that aim to ensure compliance with the National Development Plan. This has been a long time coming, as South Africa grapples with the twin challenges of low growth rates and high unemployment. It is vital that compliance legislation – both in its principle and its implementation – does not stifle the mining sector, especially in difficult times.

Moreover, the framework recognises that government’s engagement with business needs to improve if investment is to be unlocked – and the building of trust between parties is a key ingredient.

Perhaps one of the most difficult tasks that consulting engineers undertake with their clients is to establish whether their ore reserve has a positive net present value over the life of the mine. Among the many ‘modifying factors’ that must be taken into account are those related to government intervention; the more predictable and conducive these governmental factors are, the more likely mining will return to being a job creator for the South African economy.

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