Zwane blunder: mining bleeds
Minister retreats on rights
MINERAL Resources Minister Mosebenzi Zwane last week suffered another setback when he was forced to backtrack on his plan to implement a moratorium on the processing of any new applications for prospecting and mining rights.
Industry players described the retreat on the moratorium as “humiliating”.
“I think this is a humiliating albeit sensible climbdown by the minister under the circumstances,” Peter Leon, a partner and Africa co-chair at Herbert Smith Freehills, said on Friday.
“The fact is that the moratorium notice should never have been published by him in the first place as the Petroleum Resources Development Act (MPRDA) simply does not give the minister the power to impose a blanket ban on all licensing applications throughout the country.”
The moratorium was the latest in a series of blows to the mining industry and had dimmed any chance of reviving confidence, according to mining industry players.
Nearly 70 000 jobs have been lost in the mining industry in the past five years.
Mining companies have recently outlined plans to shed as many as 20 000 jobs in the industry with Sibanye Gold announcing on Thursday that it would retrench 7 400 workers as it planned to restructure its loss-making Beatrix West and Cooke operations.
Zwane said he would not implement the moratorium he announced last month, saying he changed his position after receiving submissions from stakeholders. He also said the use of alternative means to comply with the agreed undertaking on the Mining Charter should be explored.
“The department will instead opt for other legal instruments at its disposal, in line with the Minerals and MPRDA and other applicable legislation, to achieve its objectives of socio-economic development,” he said.
However, Zwane was not off the judicial hook, Leon cautioned.
“He is now obliged to file his outstanding answering affidavit within the next two weeks and may well face an adverse costs order.
“None of this augurs well for him and the Department of Mineral Resources when the chamber’s interdict application against Mining Charter III is heard in Pretoria next month,” he added.
Zwane suffered a backlash across the board after the gazetting of Mining Charter III, which saw R51 million being wiped off mining houses listed on the JSE on June 15.
The charter was aimed at addressing inequities in mining, however it contained ambiguities and unrealistic targets for the Chamber of Mines which represents 90 percent of mining by value.
The chamber approached the courts to have the charter reviewed and set aside.
The investor jitters following the gazetting of the charter necessitated Finance Minister Malusi Gigaba to call for Zwane and the industry to find each other outside of the courts.
ANC secretary-general Gwede Mantashe also said that Zwane needed to create an environment for the mining industry to perform.
Even the National Union of Mineworkers (NUM), the biggest union in the mining industry, on Monday showed disdain for Zwane.
The NUM said it had the worst relationship with Zwane out of all mineral resources ministers since 1994. The union also said it planned to request that President Jacob Zuma remove Zwane from office.
Patrick Molophegi, chairperson of South African Mining Small Business Forum, blamed Zwane for retreating on the implementation of the charter.
“When you know that your plan to introduce a charter to help the disadvantaged would put you on a losing side with our courts, why go for it?”
THE High Court in Pretoria was unimpressed on Friday by Mineral Resources Minister Mosebenzi Zwane’s failure to submit an answering affidavit in the Chamber of Mines’ application for an urgent interdict against him.
Judge Ramarumo Monama lambasted Zwane for “disrespecting” the court processes at a time when millions of jobs are in the balance in South Africa’s volatile mining sector.
“The minister has to give an explanation as to why, from the July 25 to today, nothing was communicated to me, and why nothing was communicated in terms of exchange of documents to the applicant.
“No response has come from him and this is one of our important sectors. It is so important a sector that foreign people are investing in it,” said Monama.
“What message is he communicating? In my view, this is just disrespectful. It is disrespect for the constitution. I want to tell you why this concerns me... we live under the rule of law and this matter involves legality and the rule of law.”
The Chamber of Mines told the court that Zwane, without telling them, took to Twitter to announce that he was not implementing the recently gazetted proposal to freeze the granting of new mining and permitting rights, as well as the transfer of mineral rights between companies.
“We had sought a written undertaking from the minister that he would not take the action contemplated in the Government Gazette (of July 19) and that was never given... last night we discovered that the minister had tweeted that he was not going to take steps contemplated in that notice.
“That was then followed by a media statement issued this morning to the same effect that they ...,” said the Chamber of Mines’ attorney Chris Loxton SC, before Monama interjected.
“Sorry to interrupt you, but is that how the legal process operates in this country?” Loxton replied that Zwane’s
‘Actions reminiscent of Trump and maybe it’s catching on.’
conduct was “unusual”.
“We got no formal communication by way of a letter, nor did we get an affidavit. What had happened was that my colleague Mr Motau (Advocate Terry Motau SC, counsel for Zwane) was in contact and we were attempting to make sense of the process.
“We met this morning and I confirmed with Mr Motau that it seems as if indeed the minister had stated that he would not be taking the steps contemplated in the notice,” said Loxton.
“The chamber’s objective, which was to prevent the issuing of the restrictions by the minister preventing the consideration of applications for new (mining) rights, renewals of rights and transfers of rights has now been achieved based on the media statement, though he has not communicated to us,” said Loxton.
Monama remarked that this trend was “very prevalent in the United States of America”.
Loxton responded: “Well, this was very reminiscent of Mr Trump and maybe it is catching on.”
In the end, the court endorsed an agreement between the Chamber of Mines and the Department of Mineral Resources, which noted that Zwane had formally stated that he did not intend to take any of the steps contemplated in the notice published in the Government Gazette of July 19.
“The DMR has therefore formally agreed not to pursue the contemplated suspension of the processing of section 11 applications, new mining and prospecting rights applications and renewals of existing rights,” said the Chamber of Mines in a statement after the court session.
“Given that a media statement (issued by the department of mineral resources) does not in itself constitute a formal withdrawal, the parties reached an agreement setting out the minister’s undertaking, which was made an order of court this morning (Friday).”
The court has, however, asked Zwane to submit an affidavit, within 14 days, explaining his failure to file the answering affidavit.
The Chamber of Mines said while the court order was satisfactory, it did not take away the fact that “significant damage has been done to the confidence of the industry as a result of the minister’s reckless actions”.
Minerals and Resources Minister Mosebenzi Zwane could face a legal costs order.
Mosebenzi Zwane, South Africa’s Minister of Mineral Resources, failed to submit an answering affidavit in the Chamber of Mines’ application for an urgent interdict against him.
Mineworkers at Sibanye Gold Mine’s Ya Rona shaft, level 33 in Carletonville, are exposed to silica dust as they drill.