JOHANNESBURG - President Cyril Ramaphosa said that urgent structural reforms were needed in the logistics sector to avoid the continued downward spiral of the country's economy.
Operational and financial challenges at Transnet have impacted the state-owned company’s ability to efficiently run the country’s rails and ports, throttling businesses.
The mining industry is among the hardest hit by inefficiencies in the logistics sector, as exports take a knock.
Ramaphosa told delegates at the Mining Indaba in Cape Town on Monday that deliberations at the annual meeting needed to include solutions to the ongoing structural challenges.
He warned that failure to turn Transnet around could spell trouble for the mining industry and the economy.
"As goverment, we are alive to the reality that without bold, transformative reforms to the logistics sector, mining cannot flourish. And as government, we've been very open, very cooperative and very willing to work with the key roleplayers in this sector. By introducing competition in freight rail operations, while maintaining state ownership of the routes, we will unlock massive new investment in South Africa’s rail system. This will support jobs in every sector in the economy, from mining to manufacturing to agriculture."
SEALING ABANDONED MINE SHAFTS
Ramaphosa also said that plans were afoot to seal off over 350 derelict mining shafts across the country in the next three years in a bid to suffocate the illegal mining trade.
Ramaphosa’s comments come as the mining industry continues to lose out on billions of rands in export earnings as a result of illicit mining.
The black-market trade is also believed to have impacted negatively on investor sentiment.
The ongoing Mining Indaba in Cape Town is expected see government, policymakers and industry leaders weigh their options on how to address crime in the sector.
Ramaphosa said that the public and private sectors needed to come to the table.
"The Department of Mineral Resources and Energy, through our research entity, Mintek, continues to seal ownerless and derelict mines. And these are mines that major companies operated, extracted minerals from and then abandoned, without doing the necessary rehabilitation and without sealing the mines and they just packed their bags and left."
Despite his concerns, Ramaphosa said that headway had already been made.
"Since 2019, the department has closed and sealed 251 derelict holes and shaft. Over the next three years, the department intends to close a further 352 shafts."