Increased shareholding is a superficial fix
Similar deals have been done before and mainly benefit a connected few
The revised Mining Charter unveiled by Mineral Resources Minister Mosebenzi Zwane has added more fuel to the ongoing debate about radical economic transformation.
The backlash from the likes of the Chamber of Mines – which is taking legal action – has been characterised as anti-transformation by supporters of the charter.
The greatest reaction has been to the requirements on black ownership. Seemingly, the most contentious is the requirement that companies must raise black share ownership from a minimum of 26% to 30% and 50% plus 1 for new prospectors.
And this doesn’t take into account previous black shareholding that has since divested.
Mining companies are frustrated because they will have to restructure current ownership and black economic empowerment (BEE) deals.
It is easy to dismiss this as just another ploy to perpetuate the status quo. But it is important not to be triumphant too quickly.
We can’t just accept anything and everything in the name of radical transformation. Although transferring ownership of key sectors is crucial, it is not the only element.
BEE share schemes have not been broad based. They have created a black affluent elite.
Changing the face of the ownership matters, but indigenisation alone does not address the problem of deepening inequality.
Indigenisation does not arrest the decline of the mining industry, address job losses, nor improve the viability of investment in the industry.
By focusing particularly on increasing black ownership, the Mining Charter falls short of the much-needed structural transformation of the industry.
These share schemes don’t come cheap. It is no secret that the majority of black people that are supposed to benefit from such a policy don’t have the capital required. The charter is silent on how these new BEE deals are to be funded.
In such a context the cynicism about these amendments being another stratagem devised to oil the parasitic patronage network cannot be lightly dismissed.
This narrow definition of transformation only benefits those who will be able to use their proximity to political power to amass the resources to become beneficiaries of this policy.
The National Development Plan (NDP) has already outlined the steps that need to be taken to achieve inequality and unemployment-busting outcomes.
Indigenisation does not speak to harnessing new opportunities that would lead to the creation of labour absorptive activities.
These activities include developing and enhancing linkages with manufacturing and supplier industries as outlined in the NDP.
The NDP also highlights “an opportunity for specialised product development”.
The government should be focusing on opening up these new opportunities for black people and providing the support in funding and in doing away with red tape.
The revised charter was supposed to put to bed the regulatory uncertainty which the NDP has identified as a key constraint.
Increasing black share ownership without addressing structural impediments is an attempt at a quick fix which will cause more harm than good.
‘‘ Indigenisation alone does not address the problem