There is less success with the DMR, however, which is pushing for the amendments in an effort to further the country’s industrialisation strategies.
By declaring certain minerals strategic, such as coal, the minister would be able to either enforce quotas on exports; and control the price of coal to Eskom. The consequence of controlling the coal price would be to keep escalations in electricity under control, and encourage investment, Government argues.
Anglo and BHP, two of SA’s largest coal exporters, claim stemming exports would stop investment in new mines.
Behind the scenes, the chamber has established ‘a committee of principals’ with industry worthies on one side and the DMR on the other. There has been progress on technical aspects of the amendment, such as section 11, which legislates a requirement to inform the minister of changes in shareholdings, but the big issues, such as strategic minerals, have been stonewalled.
“Government is not budging,” a legal source told Finweek.
Roger Baxter, head of the CoM’s strategy and its senior economist, declined to comment on specifics. “We’ve had a constructive engagement. We’ve basically said the mining industry is in ICU and that the amendments may kill the patient.” The process now is that the DMR will sit to discuss the public feedback at the portfolio committee ahead of delivering its own public comments on October 11 and 12, along with Business Unity South Africa (BUSA). On October 30, parliament will deliberate on the amendment bill itself.
“In general, I think the process has been useful in terms of the stakeholders having an opportunity to air the views, but I would be surprised – and delighted – if it resulted in any marked changes being made,” said another legal source.
One concern has been the manner in which objections by business to the Labour Relations Amendment Act, which spoke to Cosatu’s interest in stricter enforcement of employment equity, were rejected by Government out of hand.
“Aside from the importance which the labour component plays in the growth and success of the mining industry, the fact that the labour law developments have occurred despite impassioned pleas from business to the contrary during that consultation process, can’t help but leave one with a question mark around the extent to which the MPRDA amendments are a foregone conclusion irrespective of the presentations given by the mining companies and the market analysts,” said Bruce Falcon, an attorney with Brink, Falcon & Hulme Inc.
There’s hope, however, that with parliament due to rise on 8 November, the bill won’t get passed until next year by which time national elections will start to occupy the mind of Government. “The days in which parliament will sit will become very truncated,” says a source. This could mean the bill is delayed into its fourth year.
Will stemming exports stop investments in new mines?