Minister Gwede Mantashe: NUMSA National Bargaining Conference

Programme Director,
Leadership collective of NUMSA led by President Andrew Chirwa and the General Secretary, Mr Irvin Jim
Ministers and Deputy Ministers that are present here
Distinguished Guests
Delegates to the Conference
Members of the Media

Let me start by expressing our gratitude to the leadership collective of NUMSA for inviting us to participate in this important conference.

I have been asked to speak about the “Industrial policy, with a particular focus on the current challenges of smelters that are closing as a result of high electricity tariffs, future of PGMs and their impact on the motor & auto sectors and how petrol margins can be used to improve workers’ wages and to benefit employers in the sector.”

This meeting takes place when the South African political and economic landscape is facing stubborn local and international headwinds.

We meet during a new political environment in which no political party has a majority to form a government on its own, hence, we now lead a government of national unity (GNU) with nine other political parties that are represented in the National Assembly.

It is not just the coming together of political parties, but a coalition of contending forces who almost disagree on all aspects of policy but agree on stability and governance of the republic. Whereas some may argue that forming a GNU with these parties was a sell-out position, the truth of the matter is that the outcomes of the May 2024 elections were a strategic setback which required an effective response to safeguard the National Democratic Revolution (NDR).

It is within this context that we agreed on governance with concrete benefits to society that is based on three aspects: economic, social, and developmental.  

When tabling the 2025 Budget, the Minister of Finance, Mr Enoch Godongwana pointed us to the reality that the South African “economy has stagnated for over a decade, and that the Gross Domestic Product (GDP) growth has averaged less than 2 percent”.

In the statement of the monetary policy committee, the Governor of the South African Reserve Bank, Mr Lesetja Kganyago further pointed us to the difficulties that the world economy is facing including the escalation of trade tensions and the abrupt shifting of longstanding geopolitical relationships, hence “the global economic outlook is unpredictable”.

For over a century, the South African mining industry has played a pivotal role in the advancement and modernisation of the country’s infrastructure, fostering economic growth and job creation.

Notwithstanding the depressed mining export basket and the elevated global trade uncertainties, in 2024 the South African mining industry contributed R451 billion to the country’s GDP, amounting to 6% of the total GDP, marking an increase of 1.4% from R444 billion in 2023.

Regrettably, during the fourth quarter of 2024, the South African mining industry contributed -0.2% to the GDP due to weaker production levels for manganese ore, iron ore, gold, chromium ore, nickel and copper. This is despite the positive contribution of coal and platinum group metals (PGMs), which raises the importance of the cyclical behaviour of commodities.  

Despite the decline in gold mining which has been in existence for more than 100 years, there is a strong case emerging out of the study on the state of mining that the South African mining industry is diversifying from the gold era to an industry where minerals such as, inter alia, PGMs, chrome, and manganese are poised to play a catalytic role in the growth of the South African economy.

As the world’s largest producer of PGMs, accounting for 73% of platinum, 38% of palladium, and 81% of rhodium supply to global commodities market in 2023, our nation stands to benefit from the exploitation of these minerals for the foreseeable future. Despite the pressure for the world to transition to a cleaner economy and its impact on the motor and auto sectors, the expected upsurge of hybrid vehicles means PGMs will remain essential for the automotive industry and thereby sustain the jobs in the industry.

The expected demand for green technologies, including batteries, means the South African manganese and chrome sectors will also play a significant role in the global automotive and construction industries. These resources, if used wisely, can drive inclusive economic growth, industrialisation, and sustainable jobs.

At the center of these opportunities lies beneficiation - the process of adding value to minerals close to the point of production. However, we are facing a set of serious challenges that require coordinated action among all stakeholders. Our ferroalloy industry that was once globally competitive and a source of pride for our economy, is facing a myriad of challenges with the chrome industry being the hardest hit. Currently, at least 30 out of 59 chrome furnaces in our country have been placed under care and maintenance, whereas some have been completely shut down and in so doing contributing to job losses.

These closures are not only affecting jobs; they are diminishing our country’s capacity to beneficiate minerals and secure long-term economic growth.

To enable local beneficiation and stop the exportation of jobs and profits, we are engaging with the manganese and chrome producers to promote the creation of value-added products close to the point of production. Key proposals that are emerging out of these discussions include, but are not limited to:

• Ensuring consistent, reliable, efficient, and affordable electricity supply. Despite the recent setback regarding the electricity interruptions, government’s interventions are beginning to yield the desired results as evidenced by the 10 months of uninterrupted electricity supply.
• Introduction of incentives and policies, including export tax to restrict the export of non-beneficiated minerals.
• Introduction of quotas to restrict the amount of raw minerals that can be exported from our country.  

We continue to engage with investors, including Chinese investors, to bring beneficiation, technology, and industrial capacity into South Africa - to help build a sustainable ferroalloy sector that supports local jobs and development. These matters are not just words — they are being formalised as part of a Memorandum of Understanding under discussion with the Chinese government, where we are actively seeking more balanced cooperation that supports South Africa’s industrialisation goals.

To address the crisis at home, we have a Ministerial Task Team that brings together key Departments - Trade, Industry and Competition; National Treasury, Electricity and Energy, and Transport — to urgently develop a plan to revive our smelting sector and ensure its long-term sustainability. Our work focuses on several areas: reviewing electricity pricing models; improving rail and port infrastructure; incentivising local beneficiation; and modernising our legislative tools to give government the power to intervene where necessary.

As part of our concerted efforts to reduce the cost of living in South Africa, we are undertaking a comprehensive review of the fuel price formula at the centre of which is a question: is it sustainable to have the general fuel levy and the Road Accident Fund (RAF) levy directly linked to the pricing formula?

Whereas the pump price of unleaded petrol 95 octane in Gauteng is R22.34 per litre, the actual fuel price excluding these levies is R16.20, of which 3.1% of the total pump price goes to workers’ wages at the forecourt. Over the past five years, this component of worker wages has increased cumulatively by 29%. The critical question confronting all of us is maintaining a delicate balancing act between workers’ wages, industry margins and the impact on the consumer.

In closing, let me wish you successful deliberations on these matters with the hope that you will give us solutions to our challenges.

I thank you.

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