Incoming Minister of Mineral Resources, Gwede Mantshe, has impressed some observers with his business-like approach to the major challenges facing stakeholders in the industry bequeathed to him by his controversial and in some eyes discredited predecessor Mosebenzi Zwane. Mantashe recently committed himself to finalising a revised Mining Charter by no later than June this year. This is ambitious but as he himself points out the state of limbo that the industry finds itself is not sustainable given the high levels of suspicion and mistrust that characterise the industry.
Mantashe has also responded positively to the call to remedy the fact that his predecessor had chosen to ride roughshod over community interests in the mining industry. In trying to bulldoze the new Charter Zwane had invited particularly vociferous criticism from representative of mining communities. Although the new minister has announced a nine-province process of consultation with these communities, he has not escaped criticism given the lack of information regarding what form the promised process of consultation will take. Fears have been expressed that the nine-province tour is to be a superficial invitation to communities to comment as opposed to a structured engagement at a local level where the impact of mining is felt by mine-affected communities.
But the topical issue at hand right now is the news that on 4th April the High Court ruled that mining companies were not required to top-up their empowerment related equity transfer I the event of sale of equity by a BEE partner, provided that they had at least once reached the 26% threshold specified in the 2004 and 2010 versions of the Mining Charter. This stems from a time when the Chamber of Mines and the then Minister of Mineral Resources, Ngoako Ramathlodi, had agreed to have the courts make a declaratory order on the so-called “once empowered, always empowered” principle. The Chamber had argued that this was too onerous a requirement while at the time the State held the view that this should be on ongoing requirement even if an empowerment partner disposed of equity to non-empowerment entities.
Minister Mantashe has responded pragmatically to the High Court ruling saying that instead of appealing he would rather engage with the industry on the matter of how to maintain the empowerment profile of mining companies. Citing an intolerance for “speculators” and indicating that he believed mining companies should not be punished where they see their empowerment credentials undermined by speculative sales of equity, the Minister said that each case should be judged on its merits.
That the Minister has recognised that the mining industry is suffering the twin challenges of self-doubt in the face of policy uncertainty and open hostility between itself and other industry stakeholders is encouraging. His predecessor ignored this reality, seemingly focused instead on how to aid and abet those practising State Capture to carve out their own niche in the mining sector no matter the cost.
With Mantashe’s installation as Minister the industry surely looks forward to a positive engagement with government. In turn, both of these parties need to ensure that they engage meaningfully with both labour and mine affected communities for it is amongst these groups that “legitimacy” and a social license to operate are to be found. Historically, both mining companies and government have failed miserably to accurately gauge sentiments amongst mining communities in particular, often with tragic consequences. Mining companies and government both need to shift away from measuring the success of their community engagement efforts through quantum of their CSI spend in the case of the mines, or, through expenditure on social goods and services by government. Social and Labour Plan planning and Integrated Development Planning must both genuinely and meaningfully incorporate community expression if the efficacy of social spending by mines and the public sector is to be enhanced and levels of protest and conflict reduced.
Editor – If you are a member of a mining community do your best to attend the community consultations promised by the Department of Mineral Resources. At the time of writing there was no clarity regarding the scheduling of these consultations, nor where they are to take place or whether participation is open to the public or by invitation only