Angry uproar over BEE in mining sector
department of mineral resources (DMR) threw the mining industry into a fresh state of alarm when it released the woeful findings of the government’s BEE audit, measuring the level of black empowerment that the industry has achieved over the past decade.
Ngoako Ramatlhodi, the minister of mineral resources, indicated at the release of these findings earlier this month that should these quotas not be met − or an acceptable excuse not be forthcoming − mining rights could be withdrawn.
The country has around 1 000 mining rights holders of varying sizes.
Even though the Chamber of Mines − representing business − and government have been working with the same data from mining companies, the numbers each put out were completely different.
While Ramatlhodi said that just 79% of mining companies had met the 26% ownership target for black investment, the Chamber said that it was “firmly of the view that 100% of its members” had achieved the target laid down by the 2004 Mining Charter.
However, one of the main reasons for the Chamber’s furious response at the release of the data was that it and the DMR are currently in a legal dispute about the interpretation of the ownership element of the charter.
After the last Mining Industry Growth Development and Employment Task Team (Migdett) meeting in March, the two parties agreed to go to court to work out a middle ground on the issue. This was on condition that until this had been ratified neither party was to release its data.
The DMR’s interpretation of the charter is that meaningful economic participation has to include the three categories of historically disadvantaged South Africans, the community and workers. The Chamber of Mines, however, says that these extended demands can’t be issued retrospectively to companies that had already fulf il led their empowerment mandates.
An analysis by auditing firm SizweNtsalubaGobodo and Rand Merchant Bank corporate finance demonstrated that the industry had “met and exceeded its ownership target of 26% [of historically disadvantaged South Africans] by 2014”. The Chamber said that over 12 years, these transactions had created a net value of between R155bn and R282bn, which is equal to 25% to 46% of the entire industry value.
The Chamber maintained that the government was “shifting the goalposts midstream” and was “incorrectly [accusing] the industry of non-compliance”. This was both “damaging to trust and investment in the mining sector,” it said.
Reactions by unions also indicated deep divides in the industry. Amcu, the biggest union in the platinum sector, did not even attend the Migdett meeting on 15 May.
Gideon du Plessis, general secretary of Solidarity, walked out of the meeting. Du Plessis told Finweek that he was “so damn annoyed with the process. I could not sit with a straight face as if I concur with what was said.”
The “be and end all” of the meeting were the charter results. “We can’t zoom in on the results [...] Rome is burning,” Du Plessis stated.
Du Plessis said that, during the meeting, he had encountered a lot of hostility and no support for saying that while transformation was vital, what was needed immediately was to create industry sustainability. While resource prices could not be controlled, “let’s control what we can”. This would include issues like power prices, labour relations, health and safet y, redundancy processes and the rule of law, he said.
NUM d e p u t y g e n e r a l secretary Tshimane Montoedi said that the non-compliance by the mining industry posed a serious threat to the economy, and that the DMR had a responsibility to enforce compliance.