Business

No new mining boom

2018-10-07 16:38

A “better” mining charter is unlikely to spark a local mining boom as the sector faces a number of hindrances.

So said Minerals Council SA CEO Roger Baxter.

“Remember the charter is just one component of an entire legislative suite.”

In an interview on the sidelines of the Joburg Indaba 2018, held in Johannesburg this week, he said: “We think the [latest] charter is pointing in the right direction. It addresses a number of issues which are needed to promote competitiveness by not imposing undue pressure on the investor.”

Mxolisi Mgojo, Minerals Council president, said the charter, gazetted at the end of September, was “something we can build on”.

In an audience poll at the indaba, 69% said they could live with the new charter.

Baxter said although it was better it would not improve investment in the sector.

Other factors needed to be remedied, such as aspects of the Minerals and Petroleum Resources Development Amendment Bill, and the issuing of environmental permits had to work more efficiently.

Mineral Resources Minister Gwede Mantashe told the indaba: “We produced a charter that I think is going to allow us to get into the business of mining.

“The mining industry isn’t about to die. It is alive. It is growing. But it must not only grow, it must be competitive and it must be transformed. That is the essence of the charter.”

Mantashe said work on the charter was finished and the edition that was gazetted was final.

Mgojo said: “After 14 years of the [previous] charter and 24 years of democracy, the mining industry is a long way from achieving the vision created in the first charter.

“We acknowledge Minister Gwede Mantashe’s more engaging approach in his interactions with the Minerals Council over the development of this charter.”

He said he had initially been sceptical about the prospects of finding a solution to the charter.

He recalled a weekend when 1 000 people gathered to negotiate the charter.

Many were “angry” with Mantashe, the mineral resources department and the industry, he said.

Baxter told the indaba the Minerals Council had surveyed its members about what they would do if South Africa was ranked as one of the top 25% investment destinations worldwide.

“The answer was resounding – we will increase investment over and above existing plans by 84% in the next four years.”

This would result in 48 000 direct mining jobs and 200 000 jobs in total. Increased mining production would boost the country’s export earnings.

Despite welcoming the new charter, Baxter said the Minerals Council still had specific concerns.

“The guidelines will set the tone and practical implementation of the charter,” he said, adding that they would be used to provide greater detail about interpreting the charter.

The Minerals Council said it was concerned about: issues related to empowerment deals; the treatment of renewals of mining rights as new rights; the practicality of the inclusive procurement provisions relating to local content targets for mining goods; the targets for services; and the turnover threshold for junior miners.

In a panel discussion, Nicola Jackson, a Sibanye-Stillwater corporate lawyer, said a key point was to determine the legal status of the charter.

“My concern remains the legal status and validity of that document … I’m not suggesting we run back to court with the DMR [department of mineral resources]. We need to work out what type of animal [the charter] that is.

“There is a big argument that the charter is merely a policy document.”

Baxter said: “From our membership perspective, we aren’t taking a legalistic view as to whether the charter is legal or not. Or whether we absolutely have to implement it or not.”

Although the Minerals Council broadly supported the charter, the specific issues of concern meant that “we are not going to say to our members go and implement something we don’t agree with”.

“At a particular point we will make the decisions about the next steps if we don’t get any joy,” Baxter said. “Legal things are always a last resort. At this stage we are engaging constructively – especially on the outstanding issues.”

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May 19 2019