For a long time the mining industry was the well-being of our economy. It is an industry that affects all of us and has a long historical background. Its real beginning dates back to the 19th century, when the diamond and gold rushes started. While the history of gold mining is often presumed to postdate that of diamonds, the precious metal was, in fact, discovered, and the first mine established, at roughly the same time as the diamond rush, they say.
Although diamond and gold discoveries played an important part in the growth of early South Africa, beneath the surface of South Africa’s incredibly varied landscape, lies the richest mineral treasure trove to have ever been discovered in a confined region. Almost every precious stone, metal and mineral known to humans has been found here in deposits varying from mere traces to quantities of unparalleled value.
However, the mining industry is now struggling under a myriad challenges, after more than 160 years of commercial enterprise, sighting a number of temporary factors that might have contributed to the unusually low level of production. While part of that deterioration is a result of the global slump in metal prices currently threatening 32 000 jobs in the country, some of South Africa’s problems are self-inflicted. Varying statistics are reported and it is believed that mining now accounts for less then 5% of GDP whereas the manufacture and export of vehicles and components accounts for almost 12%.
There is good and bad news in these figures. It can indicate that we are not reliant so much on mining anymore and have developed other areas or, which is the more likely, costs in terms of labour remuneration and unrest have caught up with the industry and investors are looking elsewhere. Conversely the automotive industry has been relatively ‘stable’ and, along with the APDP incentive, is attracting investment and is growing. As reported in this issue, US motor company Ford’s investment of another R2.5 billion in its South African manufacturing operations brings to nearly R50 billion the total spent on, or committed to, South African vehicle production by foreign companies.
This brings me to my real point. The industry is highly diversified in terms of the number and types of models of machine tools, metals, castings, accessories and production systems it uses. It employs a highly skilled workforce of design, mechanical, sales and service engineers, as well as technicians and assembly workers. These skilled individuals are undoubtedly the industry’s most important assets and retaining them is a great challenge.
Commendably the OEMs are very active in the upliftment of skills in the industry. Both Mercedes-Benz SA and BMW South Africa have made recent announcements about training their own staff. This is a positive spinoff, but the cost of the government’s dictatorial attitude towards training in the supporting industries has been a major obstacle towards the upliftment of skills in industry and business as a whole. New legislation now proposed by the Department of Higher Education and Training (DHET) is going to be very detrimental towards the supporting industries.
South Africa still has one of the most diverse and important mining industries in the world, as well as an attractive resource base that holds much promise for future mining activities. But because of the numerous squabbles in the industry it is declining. Let it not happen to the automotive industry.