development. Additionally, while an
average employment target of 40%
black South Africans had been
exceeded, it was in lower level jobs. The
industry remained dominated by white
males.
The industry, represented by the
Chamber of Mines, reacted furiously,
claiming that 100% of its members had
achieved the 26% ownership target.
“The government is shifting the
goalposts mid-stream by incorrectly
accusing the industry of
non‑compliance, which is damaging to
trust and investment in the mining
sector,” the chamber said.
The issue has become more clouded
with the government saying that
empowered status was granted to some
companies as a result of empowerment
deals done before the legal start date of
the Mining Charter or not strictly
within the provisions of the charter. The
government is now claiming that these
deals cannot count in assessing a
companies’ status, ignoring arguments
that these deals were done in the true
spirit of empowerment before it became
legally necessary.
The Department of Trade and
Industry is now seeking a High Court
ruling on the issue. Theoretically, the
South African government has the
authority and ability to suspend mining
licences if miners fall short of
empowerment targets, although the
practical problems associated with this
would probably be a major deterrent to
it taking such action.
Union on-side
Coming down on the side of the
industry on the issue of meaningful
economic empowerment, the National
Union of Mineworkers (NUM), which
has historically supported the
government but is now becoming more
critical, went as far as not ruling out
mass protests against the proposed
changes. Echoing the view of many
South Africans, the union said the
move would not help workers, only
further enrich the growing
government-supportive black elite,
many of them politically engaged. “We
are not going to allow workers to
continue enriching monopoly capital
and DTI-sanctioned black elites,” the
NUM said. Empowerment is an overall
programme for all industry and
therefore under the auspices of
the DTI.
To some surprise,
Ngoako Ramatlhodi, the Minister of
Mineral Resources, said he had not had
notice of the statement relevant to the
issue of ‘once empowered, always
empowered’, issued by the DTI, but
added: “mining companies may have
to brace themselves for more stringent
black economic empowerment
requirements [then] the ownership
targets set out in the [original] mining
charter,” he said.
Commenting on the decision to seek
a High Court ruling, Ramatlhodi said
only that the outcome would definitely
set out what needed to be done. “We
must look at loosening and tightening
some aspects. For all intents and
purposes, we want investment but it
must be sustainable – in other words, it
must be done in such a way that black
people are taken fully into account,”
he said.
No forward play
Noting that the Chamber of Mines had
expressed concern about the merits of
resolving the issue through the courts,
he said: “we are engaging all parties
and considering concerns, including
[those of] the NUM and the
South African Mining Development
Association (SAMDA).” Asked about
progress with the application to the
High Court, he said: “it is early days,
I’m not going to go into details.”
Analysts were later to comment that
presumably he expected international
investors and markets to go on hold,
while the issues were sorted out.
One of South Africa’s top mining
analysts, David McKay, said that if
Ramatlhodi took a practical approach
to the issue, he would first avoid being
tied up in a backward-looking court
contest and win time and space to give
forward-looking pointers on where
black empowerment ought to be
moving and how. A DTI spokesman
said the application was still being
finalised. Such is the mood that
another commented: “it’s all a waste of
time. If the ruling goes against it, the
government will change the rules.”
Strategic smokescreen?
If the issues over empowerment and
the general condition of the mining
sector were not enough, the
government has also revealed that a
decision has been made to declare coal,
among some other minerals, a strategic
resource. This means production will be
monitored and prices and marketing
controlled. Some see this as no more
than a move to be able to divert export
coal to state-owned generating utility
Eskom, which is running out of both
coal and money. Others hint at a
creeping form of government control.
Ramatlhodi told Parliament he
intended for a state-owned African
Exploration, Mining and Financial
Corp. (AEMFC) to play a much bigger
role in the South African economy. “It
will have the same authority as any of
South Africa’s state-owned
enterprises,” he said. The corporation's
General Manager, Sicelo Sikakane said
he was looking to expand its coal
portfolio.
Some analysts anticipate that this
company could be somehow slotted
into the strategic mineral issues as sole
trader in them or in a similar capacity.
Others worry over a resurgence of calls
for nationalisation of the mining
industry. An opposition group calling
for nationalisation formed itself into a
political party to fight last year’s
general election and took 10% of the
vote. It is now repeating its calls that
government take over the industry. The
party is led by Julius Malema, who says
that South Africans are increasingly
disillusioned by the failure of the ruling
African National Congress (ANC) to
deliver basic services and the growing
corruption by government officials.
New coal policy
Ramatlhodi has also revealed that the
urgent development of a coal policy
framework was underway to ensure
policy clarity. He gave no details
beyond saying: “the key objective of
this process is to develop a framework
for ensuring the security of coal supply
for local consumption and the
promotion of sustainable employment,
amongst others.” This is being taken as
support for the declaration of coal as a
strategic mineral.
18
|
World Coal
|
June 2015
