Government concerned about mining companies placed under care and maintenance

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The Department of Mineral Resources has raised concerns about the number of mining companies being placed under care and maintenance. The Department’s Director-General, advocate Thabo Mokoena, expressed the sentiment while delivering the keynote address at the Northern Cape Mining Lekgotla on behalf of Minister Gwede Mantashe.

Several mining companies are being placed under care and maintenance, a move that’s often followed by the business rescue process.

The government says this growing trend is worrying.

“The Minister has made a call that for the mines that are still under care and maintenance, we need to do something about that,” said Mokoena.

In recent years it has been difficult to convince investors to put money in greenfield projects. As a result, some mining companies are forced to put their assets under care and maintenance as mining becomes more expensive and dangerous.

To reposition the sector in the economy, the department is calling for more investments in greenfield mining projects. “In as much as we also encourage mining companies to focus on re-opening and resuscitating those mines on care and maintenance so that we make a meaningful contribution to the GDP,” says Mokoena.

The mining sector currently contributes around 8% to SA’s GDP. Its share of contribution to the economy could increase to 12 %. Mokoena says the national development plan, which calls for more beneficiations, could help support the industry.

“In the Northern Cape, we’ll be extracting these mineral resources, there should be thinking of planning of what can we do with these mineral resources instead of just exporting them,” says Mokoena.