Business Day

Zwane wants young to make use of ‘opportunit­ies’ in mines charter

- Bekezela Phakathi Parliament­ary Writer phakathib@businessli­ve.co.za

Mineral Resources Minister Mosebenzi Zwane plans to popularise the new mining charter among young people and would embark on provincial roadshows in the next two weeks “to raise awareness and take the charter to the people”.

Speaking in Parliament during his budget vote debate in the National Council of Provinces on Wednesday, Zwane continued his defence of the controvers­ial latest version of the charter, saying that young people “must exploit the opportunit­ies to be unleashed” by what he called “this instrument of change”.

The roadshows come as the Chamber of Mines prepares to interdict the charter and have it placed under legal review.

Released last week, the charter has caused panic and fury in the industry.

Among other measures, it plans to increase black economic empowermen­t (BEE) ownership in mines from 26% to 30% within 12 months.

The chamber and various stakeholde­rs inside and outside the ANC have accused Zwane of pushing ahead with the contentiou­s regulation­s without much consultati­on.

The chamber, which represents SA’s biggest mining companies, is looking to challenge the charter in court.

In his speech, Zwane said mining would remain the mainstay of SA’s economy for “100 years to come”.

The continued growth of the sector thus offered government the opportunit­y to “break systematic poverty and inequality”.

“The 2017 [mining charter] is meant to be a catalyst to build a more inclusive economy … it provides opportunit­ies for young people … we encourage them to embrace it,” he said.

The requiremen­t that mining firms prioritise procuring equipment and other goods from black-owned enterprise­s will result in the localisati­on of supply chains and the growth of small and medium enterprise­s in townships and rural areas, Zwane said.

“The majority of people in SA remain excluded from the economy to the detriment of our inclusive growth efforts. Radical economic transforma­tion is more urgent than ever before,” said Zwane.

The charter also instructed all companies to pay their BEE shareholde­rs 1% of revenue before they pay any distributi­ons to shareholde­rs.

Furthermor­e, the mining firms must acquire 70% of goods, up from 40%, and 80% of services (from the previous 70%) from BEE companies.

These requiremen­ts would add to operating costs for those miners not already in compli- ance if such new suppliers meeting these requiremen­ts were to charge higher prices, ratings agency Moody’s said.

Moody’s warned on Wednesday that the charter would worsen the credit ratings of SA’s miners because most of them would need to fund the increase in black economic empowermen­t shareholdi­ng with debt.

Trade union Saftu said on Wednesday “the hostile and hysterical reaction of the Chamber of Mines to the new Mining Charter … highlights everything that is wrong with the capitalist mining sector.”

It called for the mining industry to be taken out of the hands of “white monopoly capitalist­s”.

THE 2017 MINING CHARTER IS MEANT TO BE A CATALYST FOR A MORE INCLUSIVE ECONOMY CHARTER REQUIRES MINERS TO PAY BEE PARTNERS 1% OF REVENUE BEFORE OTHERS

 ?? /Reuters ?? Effects: Moody’s warns that the charter would worsen credit ratings for mining companies.
/Reuters Effects: Moody’s warns that the charter would worsen credit ratings for mining companies.

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