Mining a new charter together

If Mineral Resources Minister Mosebenzi Zwane had any selfrespect, he would have resigned immediately last weekend when President Cyril Ramaphosa went over his head to talk to the captains of the mining industry and agree, in effect, to trash Zwane’s pet project — the revised Mining Charter he so controversially issued in June — amid charges that if implemented it would destroy the industry.

Zwane, it seems, was not even invited to the meeting at which Ramaphosa struck a deal with the Chamber of Mines to ask the high court to postpone indefinitely its application to review the revised charter, on the basis of the Presidency’s commitment to facilitate a process in which all stakeholders would negotiate a brand-new charter.

Not only did Zwane not resign, but his officials had been busy the previous week shoring up the plunder regime that, under Zwane, has delivered rich returns for the Guptas, with mineral resources director-general Thabo Mokoena firing an Mpumalanga official who had been at the centre of serving notices of noncompliance on the Gupta mines. Mokoena is said to have been fired at the behest of the Guptas, but the plight of workers at the Optimum mine who have not been paid has served to highlight just how noncompliant those mines really are.

The upshot of last weekend’s charter talks is, however, that there is now the strong prospect that the industry, including all its stakeholders, will come up with a new charter that has broad buy-in and has the potential to restart investment and growth in South African mining at the same time as putting in a model of industry transformation that can make the industry more equitable and inclusive and enhance its socioeconomic contribution. The court permitted the postponement of the chamber’s application but it also recorded that the community groups that had intervened to challenge Zwane’s charter were “interested and relevant stakeholders”. That will ensure community interests are included in the negotiations, along with those of the government, the industry and labour.

It builds on a process the Chamber of Mines had already begun over the past difficult year by reaching out to community groups and other stakeholders to ask them what they would like to see in a new charter.

This is potentially a watershed for the industry. And it couldn’t come at a better time, given that commodity prices have picked up and there is plenty of investment that could be unlocked if the regulatory drama and uncertainty that has eroded investment and jobs in the industry over the past few years can be fruitfully tackled.

SA still has some of the world’s richest unmined ore deposits but its hostile regulatory environment has seen it drop from 53rd to 74th of 104 countries in the latest Fraser Institute index of mining investment attractiveness, the Institute of Race Relations points out. A study by the Chamber of Mines recently found R122bn of new investment could be available in a new and more conducive environment, up 84% on current levels.

Anglo American’s healthy results last week showed the benefits of its restructuring but also highlighted the happier commodity price environment, as well as the happier outlook in SA itself, with Anglo CEO Mark Cutifani hailing Ramaphosa’s intervention as evidence that the mining environment in the country could change.

Talks on a new charter need to start as soon as possible under a new and more credible and consultative minister.

Nor is it only a new minister that is needed. As the Mpumalanga incident illustrates, the rot in the Mineral Resources Department needs to be cleaned out altogether and the long road to repairing the regulatory environment for mining in SA, at regional and national level, needs to begin.

TALKS ON A NEW CHARTER NEED TO START SOON UNDER A NEW AND MORE CREDIBLE MINISTER