Mantashe has to keep several balls in the air
SA is likely to get its first look at the highly anticipated new Mining Charter this week.
Mineral resources minister Gwede Mantashe says his team at the department of mineral resources will have a final version ready to hand over to President Cyril Ramaphosa ahead of Wednesday’s cabinet meeting.
Assuming the document, which governs transformation of the mining sector, is approved by the cabinet, the charter will be gazetted by the end of the week and usher in a new set of rules for mining companies.
What is clear is that Mantashe has to be seen to be listening to the demands of the governing party’s constituency in communities and labour by upping the black ownership levels of mining companies to 30% from 26% in a prescriptive formula that sees those two groupings sharing 16 percentage points of that ownership.
The department has tried to find a way to ensure that benefits flow quickly to communities and labour, with a 1% trickle dividend deducted from the operating profit level. Also that 10 percentage points of the 16% are carried free of charge or payment and equally split between the two groupings.
The Minerals Council of SA has opposed the two clauses as being problematic and unlikely to foster investment in the troubled mining sector. Mantashe has invited the council to come up with alternative proposals instead of just being firmly opposed to the draft clauses.
It is not far-fetched to say that the future of SA’s mining industry depends on the new charter and how skilfully the minister and his experienced team manage to juggle divergent and competing interests. N ew players in the financial services sector seem to understand the low-income market better.
Perhaps it’s because some started their operations when it became apparent that the emerging black middle class and low-income households offer new growth opportunities for financial services firms.
Capitec was one such disruptor when it came onto the scene in 2001. Now, depending on whose figures you are looking at, it is ranked as the biggest or second-biggest bank in SA.
Funeral insurance firms are not folding their arms either and are tailoring products specifically to cater for the low-income market. Hollard is one player that has revised its strategy in order to operate across the financial services value chain.
The insurer has piloted a bundled life and funeral cover product that is proving popular with clients. Using funeral cover as the selling point to its client base is a smart move.
As group CEO Saks Ntombela said last week, the group recognises that funeral cover is more valued by this market than life insurance.
Bundled products can be complex and pricey, so Hollard must be given credit for not simply pushing expensive nonunderwritten insurance.
Instead the company is giving its customers an option to choose underwritten policies to reduce premiums.
It has also piloted a savings and transactional card with a digital focus. It remains to be seen how that product will be received given that the market Hollard serves predominantly transacts in cash.