WATERBERG DISTRICT
MUNICIPALITY
MINING DEVELOPMENT STRATEGY
PHASE THREE: PROJECT DEVELOPENT
OPPORTUNITIES
GLEN STEYN AND ASSOCIATES
18 AUGUST 2006
TABLE OF CONTENTS
1.
1.1
1.2
1.3
1.4
1.5
1.6
PURPOSE AND BACKGROUND
Introduction
Policy Assessment
Geology
Status-Quo Scenario
Intervention Scenario
Goals and Objectives
4
4
4
5
5
6
6
2.
2.1
2.2
2.3
THE MINING CLUSTER VALUE CHAIN
Introduction
Cost Competitiveness for Platinum Production
The Mining Cluster Value Chain
7
7
8
9
3.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
MINERAL DEVELOPMENT PROJECTS
Potgietersrus Platinum
Other Platinum Projects
Grootegeluk Coal
Thabazimbi Iron Ore (Phoenix)
Ferrovanadium and ferrotitanium
Haasspan Granite
Matlala Crusher
Matimba Coal Ash Utilization
Pebble Co-operative
Coalbed Methane Gas
Small Diamond Mines
Recommendation
15
15
15
15
16
16
17
17
18
18
18
19
20
4.
4.1
4.2
4.3
4.4
INFRASTRUCTURE DEVELOPMENT PROJECTS
Water
Logistics
Electricity
Recommendation
21
21
23
25
25
5.
HUMAN RESOURCE DEVELOPMENT PROJECTS
National Skills Development Strategy
Mining Sector Skills Plan
Provincial Skills Implementation Plan
Social and Labour Plans
Recommendation
26
26
26
29
30
30
5.1
5.2
5.3
5.4
5.5
2
6.
6.1
6.2
6.3
6.4
6.5
6.6
BUSINESS DEVELOPMENT PROJECTS
Mining Charter
Business Development and BEE Opportunities
Business Development Support
Mining Supply Park
Local Economic Development
Recommendation
31
31
32
33
37
37
37
7.
7.1
7.2
7.3
SPATIAL DEVELOPMENT PROJECTS
Anticipated Development Scenarios
Spatial Development Frameworks
Recommendation
39
39
40
43
8.
8.1
8.2
8.3
8.4
8.5
8.6
8.7
SOCIAL DEVELOPMENT PROJECTS
Introduction
Health and Welfare
Arts, Culture and Sport
Infrastructure Development and Housing
Education
Community Capacity Building
Recommendation
44
44
44
44
45
45
45
46
9.
9.1
9.2
9.3
9.4
9.5
9.6
9.7
INSTITUTIONAL DEVELOPMENT PROJECTS
Introduction
District and Local Government Capacity
Capacity of Small Mining Co-operatives
Regulatory Issues
Networking
Research and Development
Recommendation
47
47
47
48
48
48
49
49
10.
10.1
10.2
10.3
10.4
10.5
REGIONAL INTEGRATION PROJECTS
Introduction
Inter-district Integration
Inter-provincial Integration
International Integration
Recommendation
50
50
50
50
51
51
11.
SUMMARY OF RECOMMENDATIONS
53
3
1.
PURPOSE AND BACKGROUND
1.1
Introduction
The purpose of this strategy formulation process is to provide WDM with a
policy instrument by which leadership and strategic direction can be given to
the mining industry for:
 Increased competitiveness on a sustainable basis,
 Increased investment as a basis for job creation and economic growth,
 Improvements in the quality of life of the district population, including
priorities such as BEE, as well as reductions in HIV/AIDS and poverty,
 Regional integration.
This mining development strategy is part of a broader intervention that is
aimed at accelerated economic development in Waterberg District, which
includes sectoral development strategies for agriculture and tourism.
The mining development strategy will be compiled in the following five
distinct phases:
 Policy and Geology Assessment
 Current Situation Assessment and Scenario Analysis
 Project Development Opportunities,
 Implementation Plan, and
 Consolidation
1.2
Policy Assessment
During the policy assessment it was found that the Mineral and Petroleum
Resources Act gives WDM no direct jurisdiction in terms of mining, but it is
obliged to facilitate the development process. It is therefore imperative that
an effective working relationship should be established between WDM and
the DME Regional Manager in Limpopo. The municipality is specifically
obliged to facilitate the economic and mining development processes by
building networks and promoting good working relationships between various
institutions in the sector, such as private mining companies, parastatal
development organizations and public infrastructure agencies. An interface
with national strategies such as the small scale mining initiative, integrated
manufacturing strategy, as well as the national research and development
strategy, should be created.
WDM has an important role to play in promoting the stake of historically
disadvantaged companies that are based in Waterberg District within the
targets of the mining charter. The charter is not geographically prescriptive
and any potential gains for the District in this regard will have to be
internalized by way of a deliberate intervention strategy.
4
The relevant provincial growth and development strategy is to adopt the
development cluster value-chain approach, firstly as a vehicle to raise the
international competitiveness and investment rating of the Province.
Secondly, the approach should be used to combine public and private sector
contributions towards development and thirdly, to align the interventions of
various public development institutions for greater impact. Two of the seven
competitive clusters for Limpopo that were identified and approved in the
Provincial Growth and Development Strategy fall within the mining sector of
Waterberg District. These are the platinum and coal mining clusters with
their associated value chains.
The Marketing and Investment Strategy for WDM also recommends the
cluster value chain approach as the appropriate instrument for development
planning purposes and the establishment of a District Investment Council
with an operations manager is proposed to drive the implementation process.
LED project proposals include a programme to facilitate SMME participation in
the mining industry, raising the wall of the Mogol dam, upgrading the road
from Modimolle to Lephalale, skills development and the establishment of
sectoral working groups.
South Australia is considered to be a useful example of international practice
in terms of development planning in the mining sector and Sudbury in
Canada is a best practice case study in value chain development within the
mining cluster.
1.3
Geology
The rocks covering the Waterberg district area are well endowed with a
significant number of economically important minerals that include the
platinum group metals, iron, coal, andalusite, tin and fluoride. Some of these
minerals are currently exploited for their economic value while exploration is
on-going in order to expand the lifespan of the existing mines and also to
identify and develop new deposits.
1.4
Status Quo Scenario
The current sales value of mining production from WDM has increased
beyond R14.6 billion, which implies a contribution to GGP of approximately
R5 billion. Capital investment and employment in mining appeared to be
decreasing, but has improved recently in conjunction with the commodity
boom.
The total number of new jobs from January 2006 to December 2010 under
the business-as-usual scenario is 2,200, or approximately 440 per year. In
terms of the Provincial Growth and Development Strategy, the expectation is
that 6,000 new jobs will be created in Waterberg District each year in order
to halve unemployment by 2015. Mining is an area of primary competitive
5
advantage in the Waterberg District and its share in achieving the job
creation target should therefore be raised. This will require a deliberate
public sector intervention to make Waterberg District more conducive for new
investment in mining expansion and development by the private sector.
Procurement from BEE companies for mines within Limpopo is improving, but
the share of locally-based HDSA businesses in Waterberg District is still
small. The deliberate intervention referred to above should also be aimed at
raising the levels of job creation and the level of local business development.
1.5
Intervention Scenario
The best-case scenario assumes nine new mining developments in addition
to the anticipated events that have already been captured in the business-asusual scenario.
Under this scenario the total number of new jobs created until December
2010 is 7,850, or approximately 1,960 per year. This represents 33% of the
job creation needs of the district.
The best case scenario also assumes that local business development can be
considerably improved and that 20% of procurement can be done from
suppliers that are based in the Waterberg District by 2010. This should
create another 2,420 jobs by 2010.
1.6
Goals and Objectives
The following formulation is proposed as the goal of the Waterberg District
Mining Development Strategy. WDM will provide leadership and interventions
to increase the contribution from the mining sector to job creation and
economic growth in the District by:
 Creating a conducive environment for mining expansions and new
mine developments, specifically by facilitating the removal of
constraints to such developments,
 Promoting the capacity of Black economic empowered companies from
within Waterberg District to supply the procurement needs of mines
according to the required quality standards,
 Augmenting the capacity of local municipalities, traditional leaders and
communities to respond to and consolidate the benefits of mining
developments within a cluster context.
Each of the bullet points will become an objective and will be expanded in the
implementation plan, which is contained in the phase 4 report.
This report covers project development opportunities. All four reports will be
consolidated into a final strategy document.
6
2.
THE MINING CLUSTER VALUE CHAIN
2.1
Introduction
The Provincial Growth and Development Strategy has adopted the
development cluster value-chain approach, as a vehicle to raise the
international competitiveness and investment rating of the Province, to
combine public and private sector contributions to development and to align
the interventions of various public development institutions for greater
impact.
Clusters are critical masses, spatially concentrated and of unusual
competitive success in a particular field. They encompass an array of linked
industries, from suppliers and providers of infrastructure to down-stream
activities and service organisations. They also include training, research and
governmental institutions. Competitive advantage within these clusters is
driven not so much by the source and cost of inputs as by the productive use
of inputs, which requires continuous innovation.
Middle and low-income countries have traditionally competed in the world
market with cheap labour and natural resources. In order to move beyond
this stage, the development of well-functioning clusters is essential.
Promoting cluster formation will require policy attention to issues such as:

Improving education and skills;

Provision of essential infrastructure;

Building capacity in technology;

Opening access to capital markets, and

Improving institutions / institutional efficiency.
Once a cluster begins to form, a self-reinforcing cycle promotes its growth.
Clusters improve competitiveness by increasing productivity, by driving the
direction and pace of innovation and by stimulating the formation of new
business. It is therefore, the perfect context, within which to develop a
strategy to promote economic growth, to create sustainable opportunities for
local economic development and SMMEs; and to offer acceptable returns for
investments in development.
Two of the seven competitive clusters for Limpopo that were identified and
approved in the Provincial Growth and Development Strategy fall within the
mining sector of Waterberg District. These are the platinum and coal mining
clusters with their associated value chains. Trade and Investment Limpopo
have commissioned research into the competitiveness of platinum mining in
Limpopo. The results indicate strong demand conditions but weak related
and supporting industries within Limpopo. Factor conditions are strong in
terms of platinum supplies, but weaker in terms of other inputs, such as
skills and water. This is illustrated in figure one below.
7
Figure One: Platinum Cluster Diamond in Limpopo
Source: Trade and Investment Limpopo 2004
2.2
Cost Competitiveness for Platinum Production
The table below provides a comparison of cash operating costs per ounce of
refined platinum for various platinum mines during 2005.
Table 2.2: Comparison of Operating Costs for Platinum Mines in 2005
Mine
Location
Cash on-mine Operating
Cost in R/oz Pt
Impala Rustenburg
North West Province
4,251
Anglo Bafokeng
North West Province
4,998
Anglo Rustenburg
North West Province
5,179
Anglo Amandelbult
Waterberg
3,613
Anglo Union
Waterberg
5,484
Anglo PPRust
Waterberg
4,843
Anglo Lebowa
Sekhukhune
5,703
Anglo Modikwa
Sekhukhune
7,532
Impala Marula
Sekhukhune
9,829
Source: Company Annual Reports, 2005
The average mining cost per ounce of platinum produced for Anglo Platinum
was R4,718 in 2005. Amandelbult Section in the Waterberg is the lowest
cost producer of all platinum mines in the country. Potgietersrus Platinum is
slightly above the average and Union Section is higher than that. Waterberg
production appears to be more cost competitive than Sekhukhune
production. Within Anglo Platinum, the Waterberg District appears to be as
8
cost competitive as North West Province, although the bulk of production
occurs in that Province.
The five main on-mine expenditure items for Anglo Platinum are listed below:
 Labour: R4.6bn
 Stores: R3.1bn
 Contractors: R1.5bn
 Sundry: R1.3bn and
 Utilities: R0.7bn.
Productivity and on-mine delivery costs of all these items should be
addressed in order to improve cost competitiveness. More detail is therefore
required on all these items, particularly for platinum mines in the Waterberg
District.
Procurement of stores and the opportunities for emerging entrepreneurs to
participate effectively in this supply chain are discussed in more detail in
chapter six below, that deals with business development. Labour is the topic
of analysis in chapter five on human resource development projects. Utilities
form part of the discussion on infrastructure in chapter four.
Contractors and sundries require further attention.
2.3
The Mining Cluster Value Chain
The generic value chain reflects six stages of value adding within three broad
phases, from mine initiation to mineral extraction and ultimately to mineral
beneficiation, as reflected in figure two below. Different inputs and skills are
required at every stage.
The benefit of the value chain analysis lies in the fact that it promotes a
better understanding of the mining process; it illustrates input requirements
at different stages and therefore provides a basis for the identification of new
development opportunities.
Figure three below illustrates the application of the value chain analysis for
Waterberg District Municipality in terms of the total value generated at every
stage for all commodities, the value of local procurement and total
employment. The values reflected in figure three are for the actual situation
in Waterberg District as at December 2005.
The total value of mining commodity sales from Waterberg District is
estimated at R14,626 billion (see report two). There are no smelting or
product development activities in Waterberg. The breakdown of the total
sales value across the various stages of the mining value chain is assumed to
be 2% for exploration, 60% for mining and 38% for concentration plants.
9
Total employment for primary mining activities, as well as for milling and
concentrating is estimated at 29,780 people. Employment on exploration is
allocated according to the assumed split described above. There is currently
no new mine development in Waterberg.
The total value of procurement is estimated as R5.3 billion excluding water
and electricity. The proposed target is that 20% of this amount should be
procured from within Waterberg District by 2010.
However, a critical
condition for local procurement should be that such procurement has to be
economically and financially sustainable and that it should promote
competitiveness within the mining sector of the Waterberg District.
Figure four below illustrates the potential mining value chain for 2010. The
best case mining scenario projection contained in report two was used to
estimate the employment figure of 38,227 in 2010. The local procurement
target for 2010 is R1.1 bn, but should be finalised in conjunction with local
mining companies.
Figure five reflects the mining development gap. The difference between
targeted employment in 2010 and current employment in mining is 7,850
jobs and this is the employment development gap for the mining sector. It
should be noted that this figure does not include the jobs that are expected
to be created in the trade, manufacturing, construction and transport sectors
in support of the mining sector.
Development gaps for value added at all the stages of the value chain should
be quantified once the estimates for the 2010 scenario have been completed
in conjunction with the local mining companies. These gaps should become
the basis for annual targets for mining development for all stakeholders over
the scenario period once the strategy is agreed upon by them.
10
Figure Two: Generic Mining Value Chain (Information from Mintek is acknowledged)
11
Figure Three: WDM Mining Value Chain 2005
WDM Actual Mining Value Chain
2005
Mine initiation activities
Exploration
300
Mine
development
0
Mineral extraction
Primary
mining
activities
17,868
Milling &
concentrating
11,612
Mineral beneficiation
Smelting &
refining
0
Product
Development &
manufacturing
0
Total
Employment
29,780
R150 m
R 0
R8.75 bn
R 5.7 bn
R 0
R0
Value
added/
generated
R14.6
billion
R 50 m
R 0
R 3.2 bn
R 2.1 bn
R 0
R 0
Procurement
R5.3 bn
12
Figure Four: WDM Mining Value Chain Ideal Scenario for 2010
WDM Potential Mining Value Chain
2010
Mine initiation activities
Exploration
Mine
development
Mineral extraction
Primary
mining
activities
Milling &
concentrating
Mineral beneficiation
Smelting &
refining
Product
Development &
manufacturing
Employment
38,227
Value added/
generated
Local
Procurement
R1.1
13
Figure Five: WDM Mining Value Chain Development Gap 2006 - 2010
WDM Mining Value Chain Gaps
2005-2010
Mine initiation activities
Exploration
Mine
development
Mineral extraction
Primary
mining
activities
Milling &
concentrating
Mineral beneficiation
Smelting &
refining
Product
Development &
manufacturing
Employment
7,850
Value added/
generated
Local
Procurement
14
3.
MINERAL DEVELOPMENT PROJECTS
3.1
Potgietersrus Platinum
Anglo Platinum has announced that the PPRust North Replacement Pit is
being established in 2006. It will mill 385,000 tons of material per month to
replace the 200,000 ounces of platinum that is currently being extracted
from the Zwartfontein South pit.
Board approval is currently being
recommended to further expand production to an additional 230,000 ounces
of platinum at a capital cost of R4 billion.
This is likely to create
approximately 1,300 new jobs.
It is recommended that the participation from WDM should be to facilitate
water and spatial development requirements for the new pit and its
concentration plant in conjunction with Mogalakwena Local Municipality and
to promote skills development for the mining sector in conjunction with the
Department of Labour in Limpopo.
3.2
Other Platinum Projects
An optimisation project is currently underway at Amandelbult and a suite of
four UG2 projects at this mine is currently in the pre-feasibility study stage.
No new projects have yet been announced for Union Section.
An important role for WDM in this regard is to ensure that spatial and
infrastructure planning in Northam can accommodate the residential and
business requirements of expansion at Union and Amandelbult sections.
A new project on the Platreef is anticipated from Anooraq, which is
prospecting under the name Plateau Resources on the farm Drenthe.
Inquiries have been made but no project information has been forthcoming
as yet.
3.3
Grootegeluk Coal
During 2006 the expansion of the Grootegeluk processing plant will be
completed at a cost of R320 million, with perhaps a 100 new jobs being
created.
There is also the possibility of Matimba Power Station being expanded from
the current six to nine or even to twelve generating units. The Kumba
Resources strategic plan provides for a brownfields expansion of the mine
and beneficiation plant to produce an additional 14.6 million tons of coal for
this purpose in the next 3-4 years. In the event that an entirely new power
station is to be built in Lephalale, a new mine and beneficiation plant will be
further expanded in the next 10-12 years. The Kumba Resources strategic
plan also provides for a greenfields project in Lephalale to produce 10 million
tons of coal for export. The time frame for this project is 11-13 years.
15
The role of WDM in this regard is to support Lephalale Municipality with
regard to the spatial and infrastructure planning and development required
for Lephalale town in order to achieve the best-case mining development
scenario. It is also important for the District Municipality to facilitate local
business support for the benefit of prospective Black Economic Empowerment
entrepreneurss.
3.4
Thabazimbi Iron Ore (Phoenix)
Until the end of 2005 it was anticipated that Thabazimbi Iron Ore Mine would
reach the end of its useful life during 2013. However, increased international
iron ore demand, as well as increased demand from Mittal Steel, has
prompted Kumba Resources to launch Project Phoenix. The objective of this
project is to extend the useful life of the mine by twenty years.
This will be achieved by exploiting the in-situ low grade banded ironstone
formation, which, when combined with the high-grade hematite, provides an
economically viable ore feed. The project is currently in the bankable
feasibility phase. An investment decision could be made in 2006 with
production of 2.5-3 Mt of ore being produced from 2009 onwards.
It is recommended that WDM should facilitate the provision of essential local
government services and support to Kumba Resources from Thabazimbi
Municipality.
3.5
Ferrovanadium and ferrotitanium
The technology to process iron-titanium-vanadium ores from the Bushveld
Complex has been in existence since the mid-1900s, and is still employed
successfully by companies such as Highveld Steel, Xstrata and Vantech.
These companies are all focused on the production of vanadium pentoxide.
Within the WDM there are three areas where the magnetite layers occur: the
Northern or Potgietersrus Limb of the BIC in the Mokopane area (e.g.
Molendraai), the Western Limb (Amandelbult area), and the Villa Nora
fragment. The magnetite layers have been well studied over time, and to
date only certain parts of the Western and Eastern Limbs have been brought
into production, even though the BIC is regarded as containing the largest
part of the world’s vanadium resources.
There are several reasons for this: the fairly small global market for
vanadium or ferrovanadium; the cost of the technology and the process; the
problem of securing ground with an acceptable V:Fe:Ti ratio; and lastly the
cost of transporting material from the source to the end users. Development
of methodology to separate the three metals from the vanadiferous titanomagnetite within the seams would enable the economic extraction of all three
ferrous metals and allow the unlocking of the value contained within the vast
resources contained within the magnetite seams.
16
Involving the companies currently operating vanadium extraction plants
would provide a significant step in the right direction, since at present the
current pay limit is in excess of 1.6% V2O5. If the balance of the metals can
be brought to account, the cut-off for vanadium content would be
significantly changed, given the current prices for titanium, not to mention
iron. At present the extraction technology is largely focused on smelting and
tapping the desired material, and then discarding the remainder as a slag, or
in a few instances selling the slag pellets of ferro-titanium.
A project seeking to develop the vanadium resources of the Bushveld
Complex would require significant technological input, the assistance of
government in attracting local industry, and developing a further industrial
base to utilize a relatively cheap feedstock and the shipping a valueenhanced manufactured product.
Such a project would firstly focus on finding a suitable resource which meets
the current minimum vanadium content requirement, involving existing
producers in partnership, and then using the proceeds from the operation to
develop the technology and methodology to extract the best possible
products from the available ore (specifically titanium sponge or titanium
dioxide for the metal and pigment markets). This would then result in the
Villa Nora deposits, which have extremely low vanadium but high titanium
grades, becoming economically viable.
3.6
Haasspan Granite
Haasspan is a small red granite quarry located close to Tinmyn. Operations
were recently ceased due to dwindling markets. It could be resuscitated if
granite mining in the Waterberg District is promoted in terms of a cluster
approach.
3.7
Matlala Stone Crusher
A crusher was established in the Matlala community to produce concrete
aggregate from local dolerite resources, mainly for residential construction
purposes. The concrete flour by-product was used for brick making.
Challenges emerged in the form of maintenance costs and
development, leading to the subsequent shut-down of the project.
market
Mogalakwena Local Municipality has listed the revitalisation of this project on
their IDP. It can only be recommended if a business plan is produced in
which all the challenges are addressed.
17
3.8
Matimba Coal Ash Utilization
Matimba Power Station produces several million tons of fly ash per year,
which is currently being compacted on a growing waste dump site. This
waste product could have useful applications, particularly in the construction
industry.
A consulting firm was appointed by WDM in April 2006 to compile a feasibility
study for the utilisation of fly ash from Matimba. The study was completed in
June 2006 and it recommended a specific entrepreneur with suitable
technology to process the waste dump into a cement-based product for the
construction industry.
3.9
Pebble Co-operative
The Tshabang Tlala Babirwa Pebble Co-operative (TTBPC) was registered in
September 2003 to provide an organizational structure for 13 women who
collect pebbles at Tauetswala Village in the Steilloop area of Mogalakwena
Municipality.
A substantial market for this product is found in nurseries and gardens
throughout Limpopo and Gauteng.
Limpopo Business Support Agency (LIBSA) has sponsored the construction of
an office building for TTBPC and WDM is facilitating the application of a
mining license so as to legalize the collection of pebbles.
The landowner, Kgoshi Tauetswala gave permission for this in March 2003
subject to environmental legislation and mining regulations being observed.
This is a significant but daunting task in view of the education levels of the
co-op members and their equipment requirements.
A similar situation is arising for two other pebble co-operatives, Rapadi and
Senila.
It is proposed that a business plan be compiled, covering equipment and
training requirements for the 3 pebble co-ops, which should reflect the
participation of all relevant stakeholders.
This business plan could be
presented to the Limpopo-EU LED Program for the next Call for Proposals on
the Marginalised Community Fund.
3.10 Coalbed Methane Gas
The Lephalale coal field is highly rated in South Africa in terms of its coal-bed
methane content. Anglo Coal has acquired rights for CBM gas exploitation in
the Lephalale Municipal area. Their exploration commenced in 2002 and
results from 50 boreholes are promising. An initial exploration phase has
been completed and a prefeasibility study is currently underway to verify flow
18
rates and gas quality from four test boreholes. Expenditure on exploration
and testing to date is estimated at R400 million.
Methane gas is used directly as fuel due to its high calorific value, or it can be
converted by catalytic oxidation to methanol, which is suitable as a liquid
automotive fuel.
Going forward, Anglo Coal is likely to conduct a feasibility study, which will
include a market assessment, estimated costs for the construction of piping
networks and identification of potential investors.
From a WDM perspective it is important to develop and maintain
communications with Anglo Coal regarding the feasibility study and to
facilitate institutional aspects so as to promote an environment that is
conducive for investment.
3.11 Small Diamond Mines
Although diamond prices have not increased recently to the same extent as
other commodities, there is considerable diamond exploration taking place in
the Waterberg District. On the basis of this exploration and on the basis of
the current mining model at the Oaks, it is anticipated that other small
diamond mines could also be established over time.
The role of the WDM in this regard should be to build and maintain a
relationship with diamond mining companies in order to facilitate investment
when such a decision becomes imminent. It should also facilitate business
development support for locally-based HDSA suppliers in the mining value
chain.
3.12 Tin Reclamation
The decommissioned tin mine dumps have been the subject of recent interest
to the industry. According to DME records, the Rooiberg and Zaaiplaats
dumps have new mining rights in place and the reclamation of these dumps
is in process. The remaining dumps, those at the old Union Tin Mines, are
currently being investigated under a prospecting right, and are likely to be
worked within the next year.
Recent information suggests that there may be scope for limited mining
development on the resources remaining on the old mine properties, and
there may be some exploration to determine the likelihood of new resources
existing on these properties.
19
3.13 Recommendation
It is recommended that WDM should adopt two different roles as far as
mining development is concerned. The one role is to facilitate high-impact
mining projects by major mining companies and the other is to promote
small scale mining projects among local co-operatives.
With regard to the first role, WDM needs to establish and build functional
relationships with Anglo Platinum, Kumba Resources, Anglo Coal and De
Beers. The relationship should be based on a joint agenda for mining
development in terms of which WDM facilitates the removal of infrastructure
and land-use constraints in conjunction with local municipalities in order that
mining companies can place new investment
and project expansion
decisions on a fast track.
The small scale mining development role will essentially be that of project
management. Communities and co-operatives will need to be assisted with
feasibility studies and business plans, with training and with access to all the
necessary resources and services.
This recommendation regarding the two roles for WDM should ideally be
replicated at the local municipality level, with a co-ordinating function being
performed at the district level.
20
4.
INFRASTRUCTURE DEVELOPMENT PROJECTS
4.1
Water
4.1.1 EFFLUENT FROM POLOKWANE
A contract was recently concluded between Polokwane Municipality and
Potgietersrus Platinum Mines for the supply of 14 mega litres of effluent per
day from the treatment works. Construction of the pipeline has not yet
started. It is therefore unlikely that water will actually be delivered until the
end of 2007 at the earliest.
The role of WDM in this regard is to use all information pertaining to water
demand and supply to form an action plan for water provision as one
component of the mining development strategy.
4.1.2 FLAG BOSHIELO TRANSFER
This project entails the raising of Flag Boshielo Dam wall by 5 meters and
construction of a new dam (De Hoop) in the Steelpoort River. A pipeline will
be constructed in 2008 to transfer raw water from Flag Boshielo to
Mokopane. This is expected to be completed in 2009, with a second pipeline
in 2025.
Mogalakwena Municipality (where the Platreef occurs) is expected to be a
primary beneficiary of the Flag Boshielo water transfer, but this transfer will
be insufficient to remove the water deficit. Total water requirements for the
municipality in 2005 were estimated at 21 million cubic meters of which the
bulk (19 million cubic meters) was for agriculture. Mining used a mere 1.5
million cubic meters and household use was 0.2 million.
4.1.3 MOKOLO RIVER WATER AUGMENTATION PROJECT
The current allocation of the available 28.6 million cubic meters of water per
year from Mokolo Dam is as follows:
 Agriculture: 10.4
 Grootegeluk Mine: 9.9
 Matimba Power Station: 7.3
 Lephalale Municipality: 1.0
Future needs are likely to include the potential for expanded coal mining,
new electricity generation and the possible development of a petrochemical
industry.
Water resources in this part of the District can be augmented by raising the
Mokolo Dam and by transferring water from the Crocodile River. A return
flow of 45 million cubic meters per annum has already been reserved for this
21
purpose. Planning studies are currently underway to identify the most
suitable option and implementation plan.
These are expected to be
completed in 2006. The preliminary programme is for facility designs to be
completed in 2007 and for construction to commence in April 2008.
Commissioning is scheduled for July 2010.
It is imperative, once again, that the mining development strategy and the
water services planning study should inform each other.
4.1.4 MOGALAKWENA DETAILED WATER SERVICES PLANNING STUDY
The total water demand in Mogalakwena is expected to increase to 44 million
cubic meters (mcm) by 2025. Agricultural demand is expected to remain at
19 million cubic meters, but mining demand is projected to rise to 14 mcm
and household (urban and rural) demand to 10 million cubic meters by then.
Although Mokopane will have a water deficit from 2007 onwards, this deficit
is expected to grow considerably to almost 18 million cubic meters per year
by 2025. This deficit is after provision has been made for the effluent from
Polokwane. A detailed water services planning study is therefore currently
underway in Mokopane under the auspices of the Olifants River Water
Development Feasibility Study and the results are expected in 2007. It is
important that the mining development strategy and the water services
planning study should inform each other.
4.1.5 SUMMARY OF WATER DEVELOPMENT PROJECT PROPOSALS
From a mining development perspective the strategic interventions for water
provision in the Lephalale and Thabazimbi municipal areas are sufficient to
produce a modest surplus. This is evident from the water balance table
projected to 2025 that is provided below. The table does not include the
potential augmentation of 21 mega litres per annum by raising the Mokolo
Dam wall and the 45 ml that could be obtained from transfers out of the
Crocodile River. However, a considerable deficit remains in Mogalakwena,
even after the interventions to transfer water from the Sekhukhune District
and effluent from Polokwane.
Table 4.1.5: Water Balance for Waterberg District in 2025
L. Crocodile
Matlabas/
Mokolo
Lephalale
Mokgalakwena
Total in
Waterberg
Municipality
LOCAL
YIELD
TRANSFER
IN
LOCAL
REQUIREMENT
TRANSFER
OUT
BALANCE
POTENTIAL
FOR
DEVELOPMENT
59
46
113
0
173
63
0
0
-1
-17
0
0
42
73
0
3
43
101
0
0
-1
-25
0
7
220
116
380
0
-44
7
Source: DWAF 2006
22
The detailed water services development study that is currently underway in
Mogalakwena is of crucial importance for mining development in Waterberg
District. It is imperative that WDM should raise the profile of this water
services development planning process.
It could be done by direct
participation in the planning process from both the WDM planning and
technical divisions. Additional resources could also be added if necessary.
Some of the aspects that should be included in the planning process are:

Reduction of losses and inefficient water use in the context of a fullscale water conservation and demand management strategy,

Investigation into the potential for the conversion of water
entitlements from agriculture to mining, even if only on a temporary
basis,

Improved utilisation of Donkerpoort Dam and urban effluent,

Review of all the surface water development opportunities in the
Mogalakwena Municipal area.
4.2
Logistics
4.2.1 ROADS
Roads that are currently on the five-year plan of Roads Agency Limpopo are
indicated in the table below. The busiest road on the plan, with an annual
average daily traffic count of 1,723 vehicles, is the road from Gakgabudi
through Mapela to Marken. This road is central to the improvement of
logistics for expanded platinum mining on the Platreef. Due to budget
constraints it will take five years from 2005/06 to 2009/10 to complete 75%
of this road that is 86 km long in total at a cost of R132 million. Another R40
million is on budget for the remaining stretch of this road after 2010. (The
section from Gakgabudi to Mahwelereng is considered to be in a good
condition and is not scheduled for upgrading)
The second busiest road is from Koedoeskop to Northam and Dwaalboom.
This road is also crucial in terms of mining logistics, specifically for the new
cement kiln that is currently under construction at Dwaalboom. Construction
costs are partially provided for in 2007/08, but with no provision for the rest
over the planning period. Road D1639 is not very busy, but is central to
platinum mine expansion at Northam. Construction costs were partially
provided for in 2005/06, but once again with no provision for the rest over
the planning period. Roads that are already on the tarring programme after
2010 and that are important for the mining sector include:
 Completion of the Mapela-Marken road, and
 Linking Polokwane with Lephalale via Gilead and Marken.
The most crucial road for mining development in WDM, but that is not on the
RAL strategic plan due to the substantial costs involved, is the R33 from
Modimolle to Lephalale.
23
Table 4.2.1: Five-Year Tarring Programme of Roads Agency Limpopo in Waterberg District: 2005/06-2009/10
Road No
Markers
D3500
etc
GakgabudiMapelaMarken
KoedoeskopNorthamDwaalboom
AngloPlatNortham
MarekeleLeeupoort
RadiumNorth West
MabulaFlora
GaSelekaMmatladi
ThabazimbiBuffelsdrift
D1234
etc
D1639
D928
D1897
D100
D3110
P16/2
Length
Cost
AADT
05/06
06/07
07/08
08/09
09/10
86 km
R172m
1,723
R34m
R28m
R15m
R20m
R35m
Carry
Over
R40
51 km
R74m
1,605
12km
R23m
282
36Km
R72m
950
R20m
R20m
R32m
7km
R15m
572
R7m
R8m
12km
R16m
505
R8m
R8m
30km
R71
369
R30m
R21m
77km
R154m
161
R30m
R124m
R37m
R12m
R20m
Source: Roads Agency Limpopo; April 2006
24
4.2.2 RAILWAY LINE
At the mining summit for Limpopo in August 2004, Mr. Fuzile Magwa, the
Spoornet Executive Manager for Metals and Minerals, announced that a
heavy haul technology railway line was to be built in the Waterberg. The
primary purpose is to export coal from Kumba Resources, but other minerals
could also be transported.
The rail investment is estimated at R1 billion, with phase one commencing in
2009. Full production is envisaged in 2017. The route will be shorter than
the current line.
Kumba Resources recently announced that an options analysis for the
Lephalale railway line has recently been completed. Anglo Platinum is also
investigating the feasibility of rail logistics from concentrators to the smelter
in Polokwane.
4.3
Electricity
The presentation by Eskom (Mr. Segomogo Scheppers) at the Limpopo
Mining Summit in August 2004, indicated that generation challenges remain.
Reference was made to Eskom initiatives regarding the recommissioning of
mothballed power stations, cycle gas turbines and Braamhoek Pump Storage.
There was no reference made to the expansion of Matimba Power Station.
Construction of an additional distribution line from Matimba to Polokwane at
a cost of R295 million is the only new electricity project in the Waterberg
District that was referred to.
4.4
Recommendation
The WDM planning and technical divisions should become more directly
involved in the water services development planning process in Mogalakwena
Municipality, because this the area where water shortages could have the
most constraining impact on mining development. Additional financial and
professional resources could also be added if necessary. Specific focus areas
are also recommended, such as water conservation and demand
management, as well as the conversion of water entitlements.
It is also recommended that WDM should consider an application for unused
MIG funding for roads and transfer this to RAL to fast-track the completion of
priority roads for mining. The impasse with regard to responsibility for the
reconstruction of the R33 from Modimolle to Lephalale will have to be
resolved urgently.
Planning updates should be requested from Spoornet with regard to the
mooted railway line for coal exports from Lephalale and from Eskom with to
the mooted expansion of Matimba Power Station.
5.
HUMAN RESOURCE DEVELOPMENT PROJECTS
5.1
National Skills Development Strategy
The National Skills Development Strategy (released by the Department of
Labour) is designed to support economic and employment growth and social
development. It seeks to improve skills throughout the country so as to
improve national productivity and competitiveness, and also to address
inequalities and exclusivity in South Africa.
The strategy is sensitive to structural changes in the labour market, and
specifically to the decrease in demand for people with only primary schooling
or less. (Between 1979 and 1995 there has been a decrease of 53% in the
demand for people without a Matric certificate. By contrast, the demand for
people with tertiary education rose by 2000% over the same period).
Targets have been set in terms of the NSDS to foster skills development
among persons currently employed, both in the formal sector and among
small businesses. The 25 Sector Education and Training Authorities (SETAs)
are obliged to compile skills plans for their respective sectors. The Mining
Qualifications Authority is the relevant SETA for the mining sector and its
sector skills plan is discussed in section 5.2 below. The skills plan from the
Limpopo office of the National Department of Labour is also an important
instrument in this regard and is discussed in section 5.3.
5.2
Mining Sector Skills Plan
5.2.1 BACKGROUND TO THIS SSP
The Mining Qualifications Authority (MQA) was established by the Mine Health
and Safety Act of 1996. The Skills Development Act requires all SETAs to
prepare Sector Skills Plans for their respective Sectors. The MQA has
prepared their Sector Skills Plan (SSP) for the Mining and Minerals Sector
(MMS) through a broad-based consultative process for the period April 2005
to March 2009.
5.2.2 PROFILE OF THE SECTOR
The mining and minerals sector (MMS) is an important contributor to GDP,
exports and formal employment in South Africa. The Sector currently
employs almost half a million workers, the largest proportion of whom is
employed in the Gold Mining and PGM mining sub-sectors. Plant and
Machine Operators and Assemblers and Labourers and Related Workers form
the largest occupational categories.
The danger inherent in mining activities has lead to this sector being highly
regulated by health and safety legislation.
This includes regulations
regarding the competencies that workers in different positions should possess
as well as general health and safety training required on a regular basis.
26
This means that certain elements of training in this Sector are prescribed and
that the Sector has to give preference to them. It is reflected in the
qualifications developed for and in the training priorities set by the Sector.
HIV/AIDS and other occupational diseases are serious issues with which the
MMS has to deal. At this stage the HIV infection rate in the Sector is
estimated to be around 30%.
Although the effect of HIV/AIDS on
employment may, to some extent, be contained by the preventative
interventions and treatment provided by
some employers, loss of
productivity, increased mortality and permanent incapacity is expected to
have a profound effect on the cost of production and the need to replace and
train workers in the Sector.
5.2.3 THE DEMAND FOR SKILLS IN THE SECTOR
This Sector is relatively labour intensive and employs large numbers of
workers with low educational levels. The majority of its workforce is Black
men. However, the Managerial, Professional and Technician levels are still
dominated by white men. Thus, the future demand for labour in these
categories will of necessity be racially biased. The Sector also needs to look
constructively and creatively at the employment of larger numbers of
women.
In terms of qualitative changes in the demand for skills, there is an overall
need for higher levels of education in the Sector. This has been prompted by
changes in technology, changes in work organisation that require workers to
become multi-skilled and by more stringent health and safety requirements.
5.2.4 THE SUPPLY OF SKILLS
The downsizing that occurred in the MMS since the middle of the nineteen
eighties has left more than a hundred thousand workers unemployed.
However, this surplus labour does not include a large amount of professional
and technician skills.
Professional skills are scarce resources and
professionals and technicians seem to find employment more easily after
retrenchment than workers with lower skills level do.
The number of higher education qualifications awarded in the fields of study
relevant to this Sector varies in terms of growth and decline. Overall growth
in these fields – especially in the engineering fields – has been moderate and
not sufficient to support a growing economy. Some fields even experienced
a decline in qualifications awarded – a situation that impacts on the scarcity
of these skills in the total economy and therefore also in the MMS. The racial
profile in these fields is also changing very slowly and the lack of qualified
Black professionals will hamper the transformation of the MMS over the short
to medium term.
27
The uptake of learnerships in the Sector has been disappointing. Although
learnerships registered by the MQA in the last few years cover a much wider
spectrum of occupational categories than the previous apprenticeships, the
current number of registered learners is still lower than the number of
registered apprentices four years ago. The drop in learnerships is obviously
linked to the downscaling of the industry and the availability of trained
artisans. However, a concerted effort is required to increase the number of
learners in the Sector.
5.2.5 SKILLS DEVELOPMENT PRIORITIES
The skills development priorities fall into six broad areas:
 supporting the transformation of the Sector through skills
development;
 health and safety training and development;
 the development of the current workforce;
 the development of new entrants to the labour market;
 the stimulation of new enterprise development in the Sector and
 the facilitation of the transition from employment in the MMS to
employment elsewhere in the economy.
5.2.6 SKILLS DEVELOPMENT STRATEGY
The broad objectives for skills development in the MMS follows on the skills
development priorities set out above.
The strategies to meet these
objectives will be evaluated and adapted in the four annual business plans of
the MQA.
With regard to the implementation of the Strategy budgets and funding
allocations will be made on an annual basis.
To ensure the effective
implementation of the strategy the MQA will also see to it that that unit
standards and qualifications are registered on the NQF. The quality of
education and training will be enhanced by ensuring the implementation of
the ISO 9001:2000 quality assurance standard.
The SSP provides for a new grant system with criteria and application
documents for each grant. Participation of stakeholders in the grant system
is crucial for the successful implementation of the SSP. The MQA will
continue to reach out to non-participating employers, to market the new
grants and to encourage participation in the system.
The continuation of in-depth research is the final cornerstone of the MQAs
implementation and monitoring strategy.
Research activities over the
planning period may include the analyses and monitoring of Sector
characteristics and trends, the identification and assessment of specific skills
needs (e.g. scarce skills) and the assessment of the effectiveness and impact
of certain interventions.
28
5.3
Provincial Skills Implementation Plan
The Provincial Directorate of the Department of Labour, Limpopo is tasked to
administer the Social Development Funding Window (SDFW) of the National
Skills Fund, by funding training for unemployed people in social development
projects. In order to achieve this aim of reducing unemployment and
promoting skills development, the province focuses on three broad key result
areas, namely:
 Provincial skills development initiatives aligned to provincial economic
growth and development strategies
 Implementing the National Skills Development Strategy
 Expanded Public Works Programme (EPWP) and development nodes.
The Provincial Implementation Plan (PIP) is intended to guide the funding
allocation for the year. Training requests from local, provincial and national
government departments and municipal IDP’s are consolidated into the PIP to
be funded for 2006 - 2007.
The Department of Labour relies on all implementing agents and government
departments to monitor implementation time frames of the projects and
ensure sustainability. The department is responsible for funding of training
and further offers a six month aftercare plan to verify placement. The criteria
for projects to qualify for training funds are committed funding from
implementing agents and/or donors and at least a 70 % placement rate.
Provincial priorities for the implementation of this PIP are the two Presidential
Nodal areas, Sekhukhune and Bohlabela, EPWP and training persons with
disabilities.
The provincial plan is implemented by way of labour centers, of which three
are located in Waterberg District. The names and training budgets for these
centers for 2006-07 are reflected in the table below.
Table 3.1: Labour Centres in Waterberg District
LABOUR CENTRES MUNICIPALITIES
PROJECTS
TRAINING
BUDGET
MODIMOLLE
MOKOPANE
LEPHALALE
TOTAL

Bela-Bela

Modimolle

Mogalakwena

Mookgopong

Lephalale

Thabazimbi
9
R1 254 196
4
R332 820
21
R2 179 515
34
R3 766 531
29
There are no training projects in the mining sector.
5.4 Social Labour Plans
Social and labour plans of the various operating mines in the Waterberg
District contain useful information on skills training needs and interventions,
but these plans are proving difficult to obtain.
The ideal situation would be for these needs to inform the skills development
programmes of the Department of Labour and of the MQA and for
stakeholders to jointly support the different interventions that are currently
underway, both in the public and in the private sector arenas.
5.4
Recommendations
It is recommended that co-ordination between the Departments of Labour,
Education, the Mining Qualifications Authority and the HR departments of the
operating mines in Waterberg District should be considerably improved.
The first objective of the improved co-ordination should be to reflect the
needs of the mining sector in the training programmes for unemployed
persons that are being managed by way of the three labour centers in the
Waterberg District.
Secondly, the stakeholders should collectively find a way to ulitilise the
learnership grants more effectively towards promoting skills that are on the
priority list.
Thirdly, a career guidance service by the Department of Education is
essential in order to introduce learners to the mining sector. Mintek has an
excellent programme in this regard. The provincial government of South
Australia has developed activity books for learners in primary school to
introduce them to career possibilities in the mining sector, which is one of
their competitive advantages.
Finally, it is recommended that a representative from operating mines in the
Waterberg District should be nominated to serve on the Limpopo Skills
Development Forum, which advises the Department of Labour on policies and
projects.
The Waterberg District Municipality has a critical role in facilitating this closer
co-operation among the different public and private sector stakeholders.
30
6.
BUSINESS DEVELOPMENT PROJECTS
6.1
Mining Charter
The Broad-Based Socio –Economic Empowerment Charter for the South
African Mining Industry is an agreement drawn and entered into by the social
partners in the mining industry which seeks to redress the imbalances that
existed and still exist in the mining industry. The Charter is a way in which
the social partners commit themselves to the implementation of the relevant
provisions of the Constitution and the Mineral and Petroleum Development
Act which also aim to redress historical social and economic inequalities.
The charter should also be read and applied in relation to the following pieces
of legislation:
 The Preferential Procurement Framework Act
 Supply Chain Management Act
 The Competition Act
 The Skills Development Act.
The signatories to the charter have committed themselves to substantial
improvements in literacy and numeracy, as well as skills training within the
mining industry.
A progression of procurement from historically
disadvantaged South African (HDSA) companies was accepted.
In terms of the charter, procurement can be broken down into three levels,
namely: capital goods; services; and consumables. Stakeholders undertake
to give HDSAs a preferred supplier status, where possible, in all three levels
of procurement. To this end stakeholders have undertaken to:
• Identify current levels of procurement from HDSA companies;
• Commit to a progression of procurement from HDSA companies over a 3 to
5-year time frame reflecting the genuine value added by the HDSA
provider;
• Encourage existing suppliers to form partnerships with HDSA companies,
where no HDSA Company tenders to supply goods or services; and
• Stakeholders commit to help develop HDSA procurement capacity and
access Department of Trade and Industry (DTI) assistance programmes to
achieve this.
It is envisaged that information on all HDSA companies wishing to participate
in the industry will be collected and published. All participants in the industry
will assist the DTI in compiling such a list that will inter alia be published by
government on the Internet and updated regularly.
31
6.2
Business Development and BEE Opportunities
The table below reflects the manner in which Anglo Platinum describes its
supply chain. It is useful in the sense that it provides an indication of broad
categories of opportunities. However, considerable augmentation is required
in terms of specific product information, volumes and locations.
Table 6.2.1: Anglo Platinum Supply Chain
Mining
Process
Logistics &
Infra
Drilling & blasting Reagents
Steel
Labour hire
Chemicals
Engineering
equipment
Cleaning
Fuel &
Electrical
consumables
Mining equipment Waste
Fluid movement
management
Underground
Concentrator
Fuel
support
equipment
Laboratory
Tools & hardware
General Services
Print and copy
Security
Consultancy
Gardening
Cleaning
Catering
Protective clothing
Source: Anglo Platinum Website
In 2005 the Anglo Platinum Group spent R14.5 billion on the procurement of
goods and services with suppliers, broken down approximately as follows:
 Capital: R4.1 bn
 Contracting fees: R1.5 bn and
 Consumables: R8.9 bn.
The operating cost of sales for the three Anglo platinum mines in Waterberg
District amounted to R6.2 bn for that year, but this includes remuneration
and is therefore not strictly comparable to the figure of R14.5 billion above.
A breakdown of the group’s total procurement from HDSA vendors, sourced
from the Anglo Platinum Annual Report for 2005, is provided below.
Table 6.2.2: Anglo Platinum Group Spend on HDSA Vendors
Procurement
2004 R
2005
2005
spend
Millions
Target
Actual %
HDSA- empowered
companies
198
11.3
5.5
Capital Goods
467
14.9
19.0
Consumables
154
15.2
12.9
Services
HDSA-owned
companies
20
0.4
1.9
Capital goods
90
1.2
2.8
Consumables
49
2.0
11.8
2005 R
millions
2006
Target %
216
730
427
14.1
15.5
20.2
75
106
419
0.5
1.4
2.4
32
Services
Local Companies'
Capital goods
20
Consumables
99
Services
81
'Numbers are best estimate and
accurately reflect local spend
0.4
2.6
3.0
systems
0.2
23
0.5
0.6
65
3.5
2.5
227
3.5
are being refined to more
Procurement form HDSA and local companies is considerably lower than from
HDSA empowered companies. The challenge for WDM is to mobilize support
for HDSA companies or partnerships from within the district to qualify for
participation in the supply chain.
Useful information with regard to HDSA procurement is also contained in the
Social and Labour Plans of individual mines. Grootegeluk Coal Mine, for
example, is already procuring 70% of its consumables from black empowered
companies, but less than 10% from HDSA companies. With regard to
services, 19% is procured from black empowered companies and almost 24%
from HDSA companies. The target of the mine is to achieve and maintain a
minimum BEE procurement level of 30% by 2007 and also to increase
procurement from the local economy in the vicinity of the mine.
Thabazimbi Iron Ore Mine has increased its procurement from BEE
companies to 26% in 2005 and procurement from Black-owned companies to
13.3%. Their target is also to achieve 30% BEE procurement by 2007.
This information should ideally be collated as the basis for the formulation of
a local business support strategy by WDM. Mines are reluctant to make their
Social and Labour Plans available until the context for which it will be used is
understood.
6.3
Business Development Support
6.3.1 INTRODUCTION
Business development, retention and expansion (BDRE) signifies a holistic
understanding of the activities required to ensure sustainable growth of the
Waterberg District Municipal (WDM) economy. It not only pre-supposes
collaboration between a range of role players and specialists to explore new
value chain or clustering opportunities in the mining sector, but it also has to
leverage these resources and mobilize others on a provincial national and
sometimes, international scale.
Experiences around the world specifically point to the critical importance of
developing and maintaining the economic infrastructure requirements of
33
entrepreneurial activity. This would include physical infrastructure, the
enhancement of the general business environment, the quality of human
capital in support of economic development and information on potential and
existing dynamics in the economy so that the quality and speed with which it
is able to conduct more and better business, is enhanced. It also points to
the need for effective financing dispensations and access to or availability of
technological capabilities to add value to local opportunities/resources. The
Local Economic Development (LED) mandates of district government provide
a useful ideal policy mechanism for a unified and integrated approach to
business development.
To this end, the level of integration across government tiers and government
departments and related agencies, the community and private sectors, to
focus on the same outcomes in a particular locality and economic sector,
becomes a key feature of an ideal BDRE delivery model for the WDM. Based
on emerging experiences domestically and internationally, it is clear that
nothing short of a deliberate intervention at the local level in support of BDRE
activities, is required if SMME and BBEE aspirations are to be realized by the
Municipality. It is the lack of a seamless1 and responsive enabling
infrastructure in it’s broadest context, that is limiting business expansion,
retention and specifically SMME growth. More importantly, the myriad of
enterprise development programmes and mechanisms available nationally
are in themselves not properly integrated, requiring significant local level
networking and integration effort, to be of any value to local communities
and entrepreneurs.
Based on service delivery practices around the world, the life cycle view is
becoming the standard in defining and delivering programs of support, which
in turn emphasises a customer/beneficiary centred focus on delivery. In
addition, it fosters greater levels of accountability for outcomes as opposed
to mere outputs because of such an integrated view. This approach
presupposes support interventions across the life cycle of an enterprise,
conceptually depicted as follows:
1
Ensuring easily accessible, single points of contacts and delivery that reduces the effort and cost of an
investor, entrepreneur or community to create and sustain an enterprise
34
Given the relatively low SMME density within the Limpopo Province and the
exceptionally high prevalence of survivalist enterprises in relation to other
enterprise size classes, it is quite clear that BDRE activity in general and that
on municipal level in particular, requires a significant SMME development
focus.
It is estimated that the bulk of employment in the survivalist class emanates
from activities in trade, agriculture, construction and transport sectors,
requiring a transition into other higher value adding sectors as contemplated
by the seven competitive clusters that are contained in the Provincial GDS.
6.3.2 THE SUGGESTED CONTENT OF A WDM BDRE SUPPORT INITIATIVE
In spite of great strides by NTSIKA and KHULA to address the needs of
SMME’s, large scale fragmentation in relation to business development
services (BDS) offered, as well as ill capacitated and regulated service
providers, still prevail.
Moreover, very few of the previous Local Business Service Centres (LBSC)
accredited by NTSIKA around the country, are adequately capitalised with
many either unknown or inaccessible for many would-be entrepreneurs,
implying the need for a much more sophisticated response. The recent plans
to merge NTSIKA with NAMAC bode well for the future but it may require
another three to five years for this institutional capability to be fully
developed across all economic sectors.
35
In this regard, it is imperative for a WDM BDRE delivery model to leverage
national support from every national enterprise development resource whilst
effecting WDM level BDRE service delivery integration as rapidly as possible.
As far as support services are concerned, the focus of BDRE activities will
have to be localised in such a way that integrated responses to the needs of
business enterprises can be provided as close as possible to the source of
economic opportunity in the district.
Pivotal to future sustainability of BDRE efforts, is the ability to mobilise
competitiveness enhancement support to emerging enterprises. In this
regard, the previous NAMAC manufacturing assessment model and service
provider signposting, the recently re-launched NPI productivity improvement
program; as well as the new Small Enterprise Development Agency (SEDA)
suite of services provides a baseline for a delivery model. In addition, the
UNIDO supplier development program now prototyped in the automotive
industry also offers a best practice approach combining lean manufacturing
techniques and shop floor improvements. There is also a DTI Black Business
Supplier Development Program that
offers scope for more formal
partnerships within the district on both competitiveness improvement and
business development in general. Given the wide array of competitiveness
improvement practices and skills available nationally, the challenge would be
to mobilise and leverage these resources into a coherent and comprehensive
support package that is relevant for the mining and other targeted sectors in
the Waterberg District economy.
The following six core activities could form the basis of a business support
model for emerging enterprise development in WDM:

Identify opportunities for local enterprise development and Black
Economic Empowerment within the mining value chain and in line
with the Mining Charter;

Create a database of existing local businesses in the mining supply
chain and explore opportunities to link emerging businesses with
established businesses;

Align business support activities and infrastructure requirements for
business development across the district between Municipalities and
their individual IDP/LED initiatives and development priorities
relevant to the mining sector;

Mobilise support services and resources such as development
funding, training and coaching from national, provincial and
international aid structures to promote emerging mining enterprise
development in the district;

Generate and disseminate information relevant to BDRE activities;

Assess the economic impact of these BDRE activities on a regular
basis and in order to review the WDM delivery model to become
increasingly responsive to the needs of local enterprises and their
involvement in the mining value chain.
36
6.4
Mining Supply Park
During June 2005 Trade and Investment Limpopo called for proposals to
study the feasibility of mining input supplier parks in Limpopo. Such a study
is relevant to the WDM mining development strategy in the sense that it
would indicate the optimal locations of premises and facilities from where
emerging suppliers in the mining supply chain could operate. The study also
required service providers to identify specific items and quantities of these
items in the supply chain. It therefore covers some of the issues that need
to be done as part of the business development support proposals that are
discussed in section 6.3 above.
Trade and Investment Limpopo has not yet appointed a service provider for
this feasibility study.
6.5
Local Economic Development
There is considerable scope for co-operation between municipalities and
mining companies in terms of local economic development.
The local
economic development programmes of mining companies that are reflected
in their social and labour plans could become effective instruments within a
broader municipal local economic development strategy.
Grootegeluk Coal Mine has already provided considerable impetus in this
regard by contributing to the establishment of the Lephalale Economic
Development Company. The mine is budgeting R300,000 per year in support
of the agency.
It also promotes several local economic development
projects, such as small enterprises for manufacturing and catering.
Substantial amounts are provided for feasibility studies for larger LED
projects during 2006.
Thabazimbi Iron Ore Mine has supported the formation of the Thabazimbi
LED Initiative, which aims to promote the inherent economic potential of the
municipal area. Specific LED projects that are being supported include a
local HDSA manufacturer of overalls for the mine, an entrepreneurial and
skills development centre and a community skills development centre.
Budgetary provision of R50,000 per year is being made to investigate new
opportunities for small scale mining.
6.6
Recommendation
It is recommended that WDM should facilitate the co-ordination of LED
strategies in the three municipalities of Lephalale, Thabazimbi and
Mogalakwena with the social and labour plans of mines in those areas so as
to consolidate stakeholder support and resources for maximum impact and
sustainability.
37
Within the context of the integrated LED strategies and programmes, WDM
should champion the identification of opportunities for local BEE within the
mining supply chain. Thirdly, a campaign to provide effective local business
development support and to mobilise available resources for this purpose,
should be launched and co-ordinated by WDM in order to raise the quality
standards of local business. This campaign should include interaction with
Trade and Investment Limpopo with regard to the proposed feasibility study
for a mining input supply park(s) in the Province.
38
7.
SPATIAL DEVELOPMENT PROJECTS
7.1
Anticipated Development Scenarios
The business-as-usual scenario that is presented in Report Two, anticipates
that the PPRust North Replacement Pit will be established in 2006 on the
farm Zwartfontein. It will mill 385,000 tons of material per month to replace
the 200,000 ounces of platinum that is currently being extracted from the
Zwartfontein South pit. Board approval is currently being recommended to
further expand production to an additional 230,000 ounces of platinum at a
capital cost of R4 billion. This is likely to create approximately 1,300 new
jobs within the Mapela Population Concentration Point located north of
Mahwelereng in Magalakwena Municipality.
It will require a structured
approach towards spatial development planning and land-use management in
a rural area such as Mapela that has no formal town planning scheme. It will
impact on Mahwelereng and Mokopane as the higher-order service centres
for Mapela.
During 2006 the expansion of the Grootegeluk processing plant will also be
completed at a cost of R320 million, with perhaps a 100 new jobs being
created.
Further forward is the possibility of Matimba Power Station being expanded
from the current six to nine or possibly twelve generating units, and the
impact that this will have on the expansion of Grootegeluk Coal Mine. If this
happens, then 800 new job opportunities could be created on the mine from
2008.
These two developments could attract more than 1000 new households to
Lephalale in addition to the less than 6000 households that currently reside
in Ellisras, Onverwagt and Marapong. This is a considerable addition and will
impact severely on spatial planning and municipal service provision in the
town over the period from 2006 to 2009.
The best-case scenario assumes the following mining developments in
addition to the anticipated events that have already been captured in the
business-as-usual scenario:
7.1.1 One new platinum mine on the Platreef and expansions at all other
platinum mines in the Waterberg District contributing to the production of an
additional 500,000 ounces of platinum from 2009. This will contribute 4,000
new jobs. The spatial impact will be on Mapela (Mogalakwena LM) and
Northam (Thabazimbi Municipality).
7.1.2 An additional six generating units at Matimba Power Station no 2,
necessitating further expansion at Grootegeluk Coal Mine and creating 800
more jobs from 2010. A third power station with another 6 generating units
after 2010, requiring the development of an entirely new coal mine.
39
7.1.3 Approval of the coal liquefaction project, necessitating the separation
of chemical grade coal at Grootegeluk, which will create 100 new jobs in
2009.
7.1.4 Gas field development in Waterberg District to supply the coal
liquefaction plant with hydrogen, resulting in 150 jobs being created from
2010. These developments will increase the spatial impact on EllisrasOnverwagt-Marapong (Lephalale Local Municipality) that was already
anticipated in the business-as-usual scenario.
7.1.5 Development of a ferro-vanadium mine (Molendraai) in 2010 with 400
new jobs being created.
7.1.6 A small diamond mine being developed in 2008 on the back of the
current exploration activity and another in 2009, creating 100 jobs each.
7.1.7 Recovery of tin residues from the dumps of abandoned mines from
2007 onwards, creating 200 new jobs.
7.1.8 Expansion and consolidation of the dimension stone industry to supply
the growing property market and creating 50 new jobs a year from 2007.
This will impact spatially in the Bakenberg area of Mogalakwena Municipality.
3.2.9 Beyond 2010 there is the potential for coal exports from Grootegeluk,
provided that rail logistics are developed.
In summary, the promotion of mining development will require a systematic
intervention to improve land-use management, housing development and
household service provision in the priority areas of:
 Mapela (Mogalakwena Municipality)
 Ellisras-Onverwagt-Marapong (Lephalale Local Municipality) and
 Northam (Thabazimbi Municipality).
The section below will review the contents of the relevant Spatial
Development Frameworks for these specific areas.
7.2
Spatial Development Frameworks
7.2.1 MAPELA (MOGALAKWENA MUNICIPALITY)
The Mogalakwena Spatial Development Framework does not contain any
specific recommendations regarding Mapela.
However, the following
recommendations are made for rural areas that are affected by future
mining:2

Deliberate prevention of any permanent or temporarily
development within these areas excluding farming
2
Mogalakwena Housing and Spatial Development Framework: August 2005
40
Protect 1 kilometer buffer zones of no development
Transferring responsibility and formal duty to plan and execute
relocation to Local Government and seek aid from Provincial and
National Government. Mines to assist with knowledge and know
how and funding for the process

Seek methods and assistance to simplify resettlement of affected
villages and people (A Resettlement Manual was proposed by
Metroplan)

Specific precinct plan for each community affected by mining
expansion within a specific timeframe. This will be plan on its own
due to the unique nature there-off

Specific resettlement plan for each affected community within a
specified timeframe in order not to create expectations. Local
Municipality to buy into the process and the areas identified.
This extract was sourced verbatim from the Mogalakwena Housing and
Spatial Development Framework: August 2005.


It is broadly understood from this extract that a spatial plan is recommended
for a nodal area such as Mapela. This is an urgent necessity if mining
development is to be promoted. Such a spatial plan should provide indicative
zoning for various land uses; it should incorporate a housing development
plan and the associated service requirements, as well as development cost
estimates.
A subsequent study was conducted in Mogalakwena on the prioritization of
development in areas with human settlement on a mining reef. This study
(November 2005) emphasised the importance of spatial planning and
management at the settlement level and the critical role of local government
in this regard.
An urgent spatial project in support of mining development is therefore the
compilation of a detailed spatial development framework for the Mapela
node. It should counter the misconception that settlements can be planned
at random in any part of a population concentration point. The nodal spatial
development framework for Mapela should include a land-use budget,
indicating the need for and availability of land for different uses
(applications), as well as zoning suggestions for the different land-uses.
Buffer zones around high-potential mineral occurrences should be specifically
demarcated and new settlement development should not be approved in such
buffer zones. The proposed land use budget and zoning should also be linked
to service provision with anticipated costs for different service levels.
It is estimated that the cost for the preparation of a detailed spatial
development framework for the Mapela Population Concentration Point could
amount to R200,000.
This includes the land-use budget, the zoning
proposals and the links with service provision (with anticipated costs for
different service levels).
41
7.2.2 ELLISRAS-ONVERWAGT-MARAPONG (LEPHALALE LM)
The need for 1,000 additional houses is recognized in the 2005/06 IDP for
Lephalale Municipality. The third priority in the section on development
strategies is to ‘develop a sound strategy to ensure that sufficient housing,
erven and options are available to prevent illegal settlement on land and/or
unacceptable housing conditions’3. The specific actions are to determine the
need for housing over and above households earning between R0 and R1 500
per month; and to develop a hierarchy of options suitable and affordable to
the target market, that is, erven with minimum, basic and higher levels of
service. Ten projects are listed in the IDP for this purpose.
Lephalale Municipality does not have a spatial development framework.
An urgent need at this stage is to compile a detailed spatial development
framework for the urban complex of Ellisras, Onverwagt and Marapong. This
is where the spatial impact of mining developments in Lephalale Municipality,
particularly in terms of expanded coal mining with its downstream
applications, is expected to be the highest.
Such a spatial development framework should include a land-use budget and
zoning proposals that are linked with service provision and its associated
cost. It should ideally be completed before serious constraints emerge in
terms of residential needs that are driven by new mining developments. The
cost for the preparation of a spatial development framework for the urban
node of Ellisras, Onverwagt and Marapong is estimated at R250,000. This
includes the land use budget and the land-use zoning proposals, linked with
service provision and anticipated costs at different service levels.
7.2.3 NORTHAM (THABAZIMBI MUNICIPALITY)
The IDP for 2005/06 reflects the need for 2,500 houses in Thabazimbi and
Schildpadsnest. There is reference to a People’s Housing Project in Northam
and the need to make the town visually more attractive is expressed.
Sewerage reticulation, upgrading of street lights, a solid waste site and
electrification of RDP houses are reflected as priority projects for Northam.
Northam Municipality does not have a spatial development framework. An
urgent need at this stage is to compile a detailed spatial development
framework for Northam town. This is where the spatial impact of anticipated
platinum mining developments in Northam Municipality is expected to be the
highest. The cost for the preparation of a spatial development framework for
Northam town is estimated at R150,000. This includes the land use budget
and the land-use zoning proposals, linked with service provision and
anticipated costs at different service levels.
3
Reviewed Integrated Development Plan for Lephalale Municipality, 2005; p66
42
7.3
Recommendation
The preparation of a detailed spatial development framework for the Mapela
node is recommended. It should counter the misconception that settlements
can be planned at random in any part of a population concentration point.
The nodal spatial development framework for Mapela should include a landuse budget, indicating the need for and availability of land for different uses
(applications), as well as zoning suggestions for the different land-uses.
Buffer zones around high-potential mineral occurrences should be specifically
demarcated and new settlement development should not be approved in such
buffer zones. The proposed land use budget and zoning should also be linked
to service provision with anticipated costs for different service levels. It is
estimated that the cost for the preparation of such a detailed spatial
development framework for the Mapela Population Concentration Point could
amount to R200,000.
This includes the land-use budget, the zoning
proposals and the links with service provision (with anticipated costs for
different service levels).
A detailed spatial development framework for the urban complex of Ellisras,
Onverwagt and Marapong is also recommended. This is where the spatial
impact of mining developments in Lephalale Municipality, particularly in
terms of expanded coal mining with its downstream applications, is expected
to be the highest. Such a spatial development framework should include a
land-use budget and zoning proposals that are linked with service provision
and its associated cost. It should ideally be completed before serious
constraints emerge in terms of residential needs that are driven by new
mining developments. The cost for the preparation of a spatial development
framework for the urban node of Ellisras, Onverwagt and Marapong is
estimated at R250,000.
Thirdly, a detailed spatial development framework is recommended for
Northam town. This is where the spatial impact of anticipated platinum
mining developments in Northam Municipality is expected to be the highest.
The cost for the preparation of a spatial development framework for Northam
town is estimated at R150,000.
43
8.
SOCIAL DEVELOPMENT PROJECTS
8.1
Introduction
Mining companies such as Anglo Platinum and Kumba Resources, which
account for 84% of mining sales from Waterberg District, have extensive
social responsibility programmes. The programmes normally cover issues
such as:
 Health and welfare,
 Arts, culture and sport,
 Infrastructure development and housing,
 Education and
 Community capacity building.
These issues all impact on the development agendas of district and local
municipalities. Kumba Resources, for example, has a sustainable
development policy that commits senior executives to liaise with national and
provincial government departments to ensure that company initiatives align
with public priorities. Business units liaise with their municipal counterparts
in implementing these strategic plans and feedback is given to senior
management to ensure that the stated objectives are met.
Some of the areas for strategic co-operation between mining companies and
WDM are briefly discussed below.
8.2
Health and Welfare
In addition to extensive employee health programmes, the companies
support initiatives that are geared towards enhancing government’s delivery
of primary healthcare and welfare services to impoverished communities.
Grootegeluk Coal Mine provided a safe house for the victims of violent crime
(especially women and children) in Lephalale and established a hospice in the
community. Donations are also given to various charitable causes. This
provides an important platform to strengthen the poverty reduction
programmes of district and local government.
Improved co-ordination
between the health and welfare projects on the IDPs of municipalities in
mining areas and those projects that are contained in the labour and social
plans of mines is therefore recommended. This co-ordination should be
specifically aimed at mutually reinforcing the initiatives of the different
parties.
8.3
Arts, Culture and Sport
Anglo Platinum has allocated R3.6 million from its corporate social
responsibility budget and R1.4 million from its chairman’s fund for arts,
culture and sport during 2005. Grootegeluk Coal Mine and Matimba Power
Station each contribute R1.4 million per annum towards the operating costs
of the Lephalale Sport and Recreation Club in addition to the support that is
44
given for the Marapong Sports Club. The budget of Grootegeluk Coal Mine
just for sport development in communities for the benefit of youth is
R200,000 per year.
An equivalent amount appears on the budget of
Thabazimbi Iron Ore Mine for the same purpose but in their area.
Recreation is an important issue for mining companies and their staff and is
also a key performance area of local government. Initiatives by mining
companies once again provide an important platform to strengthen the sport
and recreation programmes of district and local government for the benefit of
their broader stakeholder communities.
Improved co-ordination between
the sport and recreation projects on the IDPs of municipalities in mining
areas and those projects that are contained in the social and labour plans of
mines is therefore recommended in this case as well.
8.4
Infrastructure Development and Housing
Mining companies typically contribute towards road, school and clinic
construction in poverty stricken communities in the vicinity of mining
operations. Anglo Platinum is planning 1,000 housing units in the Northam
area.
It is also considering assistance for the Schildpadnest informal
settlement close to the Amandelbult Mine in Thabazimbi.
This should be reflected in the IDP of the local municipality and in its spatial
plan. Provision should specifically be made for local government services to
be available once construction has been completed in order to promote
integrated and sustainable human settlements.
8.5
Education
Apart from staff skills training programmes and community outreach
programmes to improve education facilities, mining companies have effective
adult basic education (ABET) programmes.
ABET is a critical social
development and poverty reduction intervention for local government, but
which has not yet been effectively addressed. The initiatives taken by mining
companies could once again provide a platform for local government to build
on and extend towards its broader stakeholder community. This will require
effective co-operation between social departments of district and local
government and their counterparts in mining companies. Such a mutually
supportive approach should be reflected in the relevant municipal IDPs and in
the social and labour plans of the relevant mining companies.
8.6
Community Capacity Building
During 2005 Anglo Platinum provided training to 52 black-owned BEE
companies within and outside the company supply chain in a wide range of
areas in order to improve their capacity to deliver products and services of
acceptable quality. This is in line with some of the recommendations made
regarding emerging business support in chapter 6 above.
45
The company also supports various job creating initiatives, such as the
development of commercial vegetable gardens, poultry farms, carpentry
businesses and community spaza shops, all of which promote self reliance.
There are several projects of this nature in the poverty alleviation
programmes of municipalities, some of which are successful but many others
are not. A joint approach between municipalities and mining companies is
recommended in order that the same projects are mutually supported to a
point of sustainability. This approach could lead to poverty alleviation
projects successfully moving through the project cycle to self sustainability,
making way for new projects to enter the pipeline.
8.7
Recommendation
WDM should facilitate closer consultation between local municipalities and
mining companies with regard to the social development projects that are
contained in IDPs and in the social and labour plans of the mines. This is
particularly relevant for Lephalale, Mogalakwena and Thabazimbi
municipalities. The purpose of the closer consultation should be to select
projects that can be mutually supported by all parties to promote impact and
sustainability.
46
9.
INSTITUTIONAL DEVELOPMENT PROJECTS
9.1
Introduction
Public and private sector institutional capacity is a critical driver of
development in all economic sectors, including mining. Any strategy that
recommends accelerated development therefore needs to provide for the
creation of capacity to do so. A range of proposals in this regard are
discussed below.
9.2
District and Local Government Capacity
From a mining development perspective there is a need to improve the
technical capacity of WDM and its local municipalities in the planning and
implementation of LED, spatial and infrastructure projects. It will not be
possible for one LED official at the district level to facilitate the interventions
that are required in all three priority sectors of the WDM economy. At the
local municipality level it is also essential that LED officials in Lephalale,
Thabazimbi and Mogalakwena should have an understanding of the mining
sector. (Thabazimbi Local Municipality does not have a dedicated LED unit or
a LED strategy as yet).
With regard to spatial development in the three local municipalities that have
substantial mining development potential, it is essential that sufficient landuse planning and management capacity should be created to cater for the
human settlement implications of new mining developments. It will not be
adequate just to have macro municipal spatial development frameworks that
are designed for business-as-usual scenarios.
Augmentation of the technical planning and project management capacity,
particularly with regard to the provision of water, is also essential, both at
the district level and for the three local municipalities concerned. This need
is most acute in Mogalakwena Local Municipality. The constraining impact of
water scarcity in the district on potential mining developments can be
ameliorated by skillful water planning, project management and
conservation.
There is also a considerable need for co-ordination and integration between
these functions within every municipality, as well as between the district and
local municipalities.
Recommendations with regard to institutional options for the management of
local economic development were presented to WDM in May 2006. The
recommendations include seven options that range from expansion of the
current LED unit (appointing dedicated managers for each priority sector), to
the establishment of an economic development agency and further to public
private partnerships. External service procurement is also included among
the options. The most appropriate solution is probably to be found in a
47
combination of some of the options, such as internal expansion, public
private partnerships and external service procurement.
9.3
Capacity of Small Mining Co-operatives
Good intentions to promote and support small mining co-operatives are being
hampered by educational and institutional capacity constraints within the cooperatives. There are challenges in terms of preparing a syllabus on complex
issues such as mining safety and environmental conservation for illiterate or
semi-illiterate people. There are also challenges in convincing the potential
beneficiaries that this learning is essential.
The compilation of a syllabus for the training of small mining co-operative
members in all the relevant technical, financial and administrative aspects
should be considered. Different options to finance the compilation of the
syllabus and the subsequent training programmes should also be considered,
including MQA, the EU-Limpopo LED Fund and LED budgets from mining
companies such as Thabazimbi Iron Ore Mine.
9.4
Regulatory Issues
An accelerated mining development strategy in Waterberg District is likely to
increase the demands on the Department of Minerals and Energy in terms of
the approval of applications for prospecting and mining rights. The prevailing
perception is that the time that is currently required by the Department for
the approval process is causing inconvenience within the mining industry.
In order to avoid increasing backlogs in the approval process when the
mining development process is promoted in the Waterberg District, it will be
essential for adequate capacity to be established within the regulatory
department.
The Intergovernmental Relations Act provides for institutions by which
development relationships, such as the fast-tracking of prospecting and
mining permits, can be coordinated and managed between districts,
provinces and national departments.
9.5
Networking
There is a wide range of institutions within South Africa that have the
common objective of promoting development in the mining sector. These
include national strategies such as the small scale mining initiative, the
integrated manufacturing strategy, as well as the national research and
development strategy.
It is recommended that the stakeholder forum that was created for the
purpose of the WDM Mining Strategy formulation process should be
institutionalized and augmented to become a governing body of networking
48
institutions that could oversee and support
implementation process within the District.
the
mining
strategy
Informal networking could proceed in parallel with more formal institutional
networking processes.
9.6
Research and Development
The National Department of Science and Technology has four technology
missions, of which the Resource-based Industries Mission is most relevant for
the mining development strategy in Waterberg District. This mission has four
thematic areas as indicated below:
 Energy
 Mining and Minerals,
 Agro-processing and
 Water resources.
The purpose of these missions is to promote the growth and diversification of
the South African economy. Initiatives within the mining and minerals
thematic area that are particularly relevant to the Waterberg District Mining
Strategy include the Advanced Metals Initiative and specifically the platinum
and titanium research and development strategy.
Mintek is co-ordinating the Platinum Development Initiative within this
context. Considerable research and planning work has been undertaken,
specifically with regard to product applications for platinum, such as auto
catalysts, fuel cells and jewelry. Cost effective approaches to recover
platinum from secondary sources are also being investigated. A broad
strategy has also been developed to capture as much of the platinum value
matrix for South Africa as is feasible. A joint forum between Mintek and
major platinum producers was established in early 2006 to drive the
implementation of the strategy.
It is recommended that Waterberg District Municipality should increasingly
engage in this platinum development initiative by way of regular
consultations with Mintek.
9.7
Recommendation
Due to internal capacity constraints with regard to mining development
promotion, WDM will need to consider the procurement of external assistance
in the short term to facilitate the implementation of the development
proposals. This recommendation, together with a proposal for a more
permanent institutional dispensation for the mining development process, will
be discussed in more detail in the implementation plan that is contained in
the next report.
49
10.
REGIONAL INTEGRATION PROJECTS
10.1 Introduction
The WDM mining development strategy has regional implications at the
district, provincial and (inter)national level.
10.2 Inter-district Integration
Although Waterberg District is the dominant platinum producing area within
Limpopo, Sekhukhune District has a rapidly growing platinum industry with
35% of the provincial platinum reserves compared to 60% in the Waterberg.
There is also a medium-sized platinum mine owned by Lonmin in the
Capricorn District. WDM should therefore be the lead agent in promoting the
platinum cluster value chain in the context of the Limpopo Growth and
Development Strategy.
It is recommended that the three district municipalities should explore the
implications of a standardized approach towards institutional development,
infrastructure promotion and business development support for the mining
industry, as well as towards liaison with mining companies. With regard to
mining liaison, for example, Sekhukhune District plays a prominent role in
the Sekhukhune Mining Producers Forum, but in Waterberg District an
equivalent forum is located at the municipal level in Mogalakwena.
The issues of spatial and human settlement development for mining projects
in rural areas should also be addressed. These implications could be
considered both at the political and at the technical levels. Such an approach
will substantiate the signal that is contained in the Provincial Growth and
Development Strategy to promote the platinum cluster value chain as a
principal area of competitive development advantage.
10.3 Inter-provincial Integration
The available geological information suggests that Limpopo is host to the
bulk of the platinum reserves in South Africa (38.5%), followed by
Mpumalanga (35%) and North West Province with 26.5%. However, the bulk
of platinum production in South Africa (68%) is extracted from North West
Province and the remaining 32% from Limpopo. New mining developments
that have been announced from 2007 onwards could lead to the emergence
of a strong platinum mining industry emerging in Mpumalanga between
Steelpoort and Lydenburg.
It is recommended that WDM should encourage a relationship-building
process between Limpopo, North West and Mpumalanga provinces within the
context of the platinum cluster. An area of common interest is the lobbying
of national incentives to promote investment within the platinum cluster
value chain.
50
10.3 International Integration
In the context of the WDM mining development strategy, coal mining has
more implications for international integration at this stage than platinum.
The Mmamabula Coalfield in Botswana, which is being explored by BP, is
contiguous with the Waterberg Coalfield as indicated in the figure below.
Figure 10.1: Coalfields in Limpopo
Several announcements have been made in the past year pertaining to the
intentions of the Botswana Government with regard to mining development
on the Mmamabula Coalfield, particularly for the export market. The Coal
Division of Kumba Resources has also announced that it is having discussions
with the Botswana Government on the issue of coal exports.
Implementation of this intention will require a railway line, either through the
Waterberg District to an east coast port, or through Namibia to a west coast
port, which will be the longer route. There could be considerable benefits
with regard to economic development for the Waterberg if the east coast
access option is selected. It will promote the case for additional mining
developments for exports from Waterberg District, not only for coal, but
possibly for other commodities also. The benefits for Waterberg District of
the west coast option being taken by Botswana will be much more limited.
10.4 Recommendation
It is recommended firstly that WDM should facilitate exploratory discussions
with the two other platinum producing district municipalities in Limpopo with
regard to the implications of a standardized approach towards institutional
development, infrastructure promotion and business development support for
the mining industry, as well as towards liaison with mining companies.
51
Secondly, it is recommended that WDM should encourage a relationshipbuilding process between Limpopo, North West and Mpumalanga provinces
within the context of the platinum cluster. An area of common interest is the
lobbying of national incentives to promote investment within the platinum
cluster value chain.
Thirdly, WDM should explore all the options for the export of coal from the
District in consultation with Kumba Resources and Spoornet.
Once
consensus with regard to a development proposal is reached, the
Intergovernmental Relations Forum could be used to communicate with the
Botswana Government.
52
11.
SUMMARY OF RECOMMENDATIONS
The purpose of this strategy formulation process is to provide WDM with a
policy instrument by which leadership and strategic direction can be given to
the mining industry for:
 Increased competitiveness on a sustainable basis,
 Increased investment as a basis for job creation and economic growth,
 Improvements in the quality of life of the district population, including
priorities such as BEE, as well as reductions in HIV/AIDS and poverty,
 Regional integration.
This mining development strategy is part of a broader intervention that is
aimed at accelerated economic development in Waterberg District, which
includes sectoral development strategies for agriculture and tourism.
The mining development strategy will be compiled in the following five
distinct phases:
 Policy and Geology Assessment
 Current Situation Assessment and Scenario Analysis
 Project Development Opportunities,
 Implementation Plan, and
 Consolidation
This summary covers the recommendations
Development Opportunities only.
with
regard
to
Project
11.1 The Mining Cluster Value Chain
Development gaps for value added, employment and HDSA procurement at
all the stages of the value chain should be quantified once the estimates for
the 2010 scenario have been completed in conjunction with the local mining
companies. These gaps should become the basis for annual targets for
mining development for all stakeholders over the scenario period once the
strategy is agreed upon by them.
11.2 Mineral Development Projects
It is recommended that WDM should adopt two different roles as far as
mining development is concerned. The one role is to facilitate high-impact
mining projects by major mining companies and the other is to promote
small scale mining projects among local co-operatives.
With regard to the first role, WDM needs to establish and build functional
relationships with Anglo Platinum, Kumba Resources, Anglo Coal and De
Beers. The relationship should be based on a joint agenda for mining
development in terms of which WDM facilitates the removal of infrastructure
and land-use constraints in conjunction with local municipalities in order that
53
mining companies can place new investment
decisions on a fast track.
and project expansion
The small scale mining development role will essentially be that of project
management. Communities and co-operatives will need to be assisted with
feasibility studies and business plans, with training and with access to all the
necessary resources and services.
This recommendation regarding the two roles for WDM should ideally be
replicated at the local municipality level, with a co-ordinating function being
performed at the district level.
11.3 Infrastructure Development Projects
The WDM planning and technical divisions should become more directly
involved in the water services development planning process in Mogalakwena
Municipality, because this the area where water shortages could have the
most constraining impact on mining development. Additional financial and
professional resources could also be added if necessary. Specific focus areas
are also recommended, such as water conservation and demand
management, as well as the conversion of water entitlements.
It is also recommended that WDM should consider an application for unused
MIG funding for roads and transfer this to RAL to fast-track the completion of
priority roads for mining.
Planning updates should be requested from Spoornet with regard to the
mooted railway line for coal exports from Lephalale and from Eskom with to
the mooted expansion of Matimba Power Station.
11.4 Human Resource Development Projects
It is recommended that co-ordination between the Departments of Labour,
Education, the Mining Qualifications Authority and the HR departments of the
operating mines in Waterberg District should be considerably improved.
The first objective of the improved co-ordination should be to reflect the
needs of the mining sector in the training programmes for unemployed
persons that are being managed by way of the three labour centers in the
Waterberg District.
Secondly, the stakeholders should collectively find a way to ulitilise the
learnership grants more effectively towards promoting skills that are on the
priority list.
Thirdly, a career guidance service by the Department of Education is
essential in order to introduce learners to the mining sector. Mintek has an
excellent programme in this regard. The provincial government of South
54
Australia has developed activity books for learners in primary school to
introduce them to career possibilities in the mining sector, which is one of
their competitive advantages.
Finally, it is recommended that a representative from operating mines in the
Waterberg District should be nominated to serve on the Limpopo Skills
Development Forum, which advises the Department of Labour on policies and
projects.
The Waterberg District Municipality has a critical role in facilitating this closer
co-operation among the different public and private sector stakeholders.
11.5 Business Development Projects
It is recommended that WDM should facilitate the co-ordination of LED
strategies in the three municipalities of Lephalale, Thabazimbi and
Mogalakwena with the social and labour plans of mines in those areas so as
to consolidate stakeholder support and resources for maximum impact and
sustainability.
Within the context of the integrated LED strategies and programmes, WDM
should champion the identification of opportunities for local BEE within the
mining supply chain. Thirdly, a campaign to provide effective local business
development support and to mobilise available resources for this purpose,
should be launched and co-ordinated by WDM in order to raise the quality
standards of local business. This campaign should include interaction with
Trade and Investment Limpopo with regard to the proposed feasibility study
for a mining input supply park(s) in the Province.
11.6 Spatial Development Projects
The preparation of a detailed spatial development framework for the Mapela
node is recommended. It should counter the misconception that settlements
can be planned at random in any part of a population concentration point.
The nodal spatial development framework for Mapela should include a landuse budget, indicating the need for and availability of land for different uses
(applications), as well as zoning suggestions for the different land-uses.
Buffer zones around high-potential mineral occurrences should be specifically
demarcated and new settlement development should not be approved in such
buffer zones. The proposed land use budget and zoning should also be linked
to service provision with anticipated costs for different service levels. It is
estimated that the cost for the preparation of such a detailed spatial
development framework for the Mapela Population Concentration Point could
amount to R200,000.
This includes the land-use budget, the zoning
proposals and the links with service provision (with anticipated costs for
different service levels).
55
A detailed spatial development framework for the urban complex of Ellisras,
Onverwagt and Marapong is also recommended. This is where the spatial
impact of mining developments in Lephalale Municipality, particularly in
terms of expanded coal mining with its downstream applications, is expected
to be the highest. Such a spatial development framework should include a
land-use budget and zoning proposals that are linked with service provision
and its associated cost. It should ideally be completed before serious
constraints emerge in terms of residential needs that are driven by new
mining developments. The cost for the preparation of a spatial development
framework for the urban node of Ellisras, Onverwagt and Marapong is
estimated at R250,000.
Thirdly, a detailed spatial development framework is recommended for
Northam town. This is where the spatial impact of anticipated platinum
mining developments in Northam Municipality is expected to be the highest.
The cost for the preparation of a spatial development framework for Northam
town is estimated at R150,000.
11.7 Social Development Projects
WDM should facilitate closer consultation between local municipalities and
mining companies with regard to the social development projects that are
contained in IDPs and in the social and labour plans of the mines. This is
particularly relevant for Lephalale, Mogalakwena and Thabazimbi
municipalities. The purpose of the closer consultation should be to select
projects that can be mutually supported by all parties to promote impact and
sustainability.
11.8 Institutional Development Projects
Due to internal capacity constraints with regard to mining development
promotion, WDM will need to consider the procurement of external assistance
in the short term to facilitate the implementation of the development
proposals. This recommendation, together with a proposal for a more
permanent institutional dispensation for the mining development process, will
be discussed in more detail in the implementation plan that will be contained
in the next report.
11.9 Regional Integration Projects
It is recommended firstly that WDM should facilitate exploratory discussions
with the two other platinum producing district municipalities in Limpopo with
regard to the implications of a standardized approach towards institutional
development, infrastructure promotion and business development support for
the mining industry, as well as towards liaison with mining companies.
Secondly, it is recommended that WDM should encourage a relationshipbuilding process between Limpopo, North West and Mpumalanga provinces
56
within the context of the platinum cluster. An area of common interest is the
lobbying of national incentives to promote investment within the platinum
cluster value chain.
Thirdly, WDM should explore all the options for the export of coal from the
District in consultation with Kumba Resources and Spoornet.
Once
consensus with regard to a development proposal is reached, the
Intergovernmental Relations Forum could be used to communicate with the
Botswana Government.
57