Zwane blun­der: min­ing bleeds

Min­is­ter re­treats on rights

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

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.

In­vestor jit­ters

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.

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