Improvement in mining sector will assist freight rail – economist

Bongani Motsa, an economist with the Minerals Council of SA.

South Africa would have to sort out regulatory impediments and policy uncertainty in the mining environment if the country wanted to keep its hopes of economic revival alive, said Bongani Motsa, an economist with the Minerals Council of SA.

Speaking at the Transport Forum this afternoon, Motsa told a packed conference room at the University of Johannesburg that Transnet Freight Rail was intertwined with the mining sector and should the latter not be protected and progressively supported, rail freight’s future in South Africa was uncertain.

Hauling out figures in support of his argument that mining remains a bedrock of the country’s economy, Motsa reminded delegates that the mining sector employed 464 670 people and its contribution to private non-agricultural GDP earnings was 6.1%.

“We have the resources,” he said.

“That’s not the problem. The issue is regulatory constraints and policy uncertainty.”

He furthermore stressed that despite the country’s coal being of a fairly high grade, “we need to look beyond coal.

“After 2030 coal is not going to be an energy option anymore.”

With regard to energy, he commented that cost was a significant determinant for the local mining sector.

“In addition to sorting out regulations and policy around mining, we have to focus on driving down the cost of production.

“Countries like South Korea, Japan and China have experienced the value of cost effectiveness in relation to energy consumption. The moment they secured surplus their economies started growing.”

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