Mining sector ‘in for torrid times’
SA’s mining industry is entering another turbulent year, with development on the legal and regulatory fronts needing political leadership that is absent, says Paul Miller, a Nedbank Corporate and Investment Banking mining investment banker.
This year’s finalisation of the third iteration of the Mining Charter and the amendments to the Mineral and Petroleum Resources Development Act as well as a number of court cases will pit the Department of Mineral Resources against the mining industry.
Miller said on Monday that these developments came after 2016’s setbacks for the department in high-profile court cases against AngloGold Ashanti and Aquila Resources, in which judges pointed out shortcomings in officials’ handling of responsibilities.
“I’m concerned 2017 is going to be a very, very difficult year for the industry,” Miller said.
“Ordinarily in a time of crisis, which is what we have experienced and are about to experience, we’d want political leadership. Our minister in charge of mineral resources seems very involved in the heart of what’s happening elsewhere in politics, so I’m not sure we’re going to see the leadership required to fix this,” he said.
Mineral Resources Minister Mosebenzi Zwane said last week the department was talking to the Chamber of Mines about its concerns about the charter. He expected it to be finalised by the end of March.
Worsening the problems in the industry was not so much the delayed charter and amendments, but the uncertainties embedded in those documents, Miller said.
“Problems at the department definitely go deep. Officials have been activists, interpreting vague legislation and a vague charter per their own interpretation of what transformation means. Decisions vary from one region to another — and that is just the honest officials.”