Shady Mpumalanga mining office shut
• Mines minister’s decision on corruption-plagued office welcomed as ‘step in the right direction’
President Cyril Ramaphosa’s attempts to clean the rot that spread under his predecessor’s regime and discouraged investment in a sector that once dominated the economy took another step forward after mineral resources minister Gwede Mantashe closed the department’s Mpumalanga office, which has been plagued by allegations of corruption.
This follows Mantashe’s earlier decisions to reopen the Mining Charter for further negotiations with industry and withdraw the Mineral and Petroleum Resources Development Amendment Bill in order to create a separate legal framework for the petroleum sector, as requested by the industry.
Mantashe’s actions are seen as crucial to restore investor confidence in the sector, which still employs about 435,000 workers. Its decline accelerated in recent years and it was hurt by incompetence and regulatory uncertainty during the administration of his predecessor, Mosebenzi Zwane, a close associate of former president Jacob Zuma and the Gupta family, who are accused of using their political connections to distort government policies to benefit their businesses.
The closure of the Mpumalanga office is “another step in the right direction”.
“Mantashe is trying very hard to clean up the Augean stables bequeathed by Zwane,” said mining lawyer Peter Leon, Africa co-chair and partner at Herbert Smith Freehills.
Much work remains, including the introduction of mandatory time limits on rights applications and an improved online application system.
Mantashe’s request to withdraw the bill also “sends the right message”, Leon said. But investors are likely to remain cautious until the final version of
the charter is published, likely in November, he said.
Sticking points remain the proposal for the 10% free-carried interest in mining companies and the payment of a 1% trickle dividend to mining communities and employees.
Catherine Horsfield, attorney and head of the mining programme at the Centre for Environmental Rights (CER), said most of the organisation’s work is focused in Mpumalanga and “it’s been very apparent there’s been a crisis in that office for some years”.
Problems extended to both the issuing of licences and accessing of information relating to licences, even when requests were granted in terms of the Promotion of Access to Information Act, she said.
Horsfield said the CER is litigating on behalf of eight civil society organisations in an attempt to set aside licences from that office that were granted irrationally.
One official in the Mpumalanga office has already been suspended for demanding payments to lift safety stoppages. The Limpopo office, which was closed in June, reopened on Monday, and the minister would “provide an update on the investigations and outcomes in due course”, the department said.
Mining companies, civil society, environmental groups and the Minerals Council of SA have had to turn to the courts in recent years to fight the department on issues ranging from the double-granting of rights over the same areas and the soliciting of “payments” and the issuing of mining and exploration rights in environmentally sensitive areas.
Backlogs for licence processing date as far back as 2010, Mantashe told parliament earlier in 2018.
The industry has “huge potential” and could create another 50,000 direct and 150,000 indirect jobs if the country was to return to the top 25% of the most attractive mining investment destinations, Minerals Council CEO Roger Baxter told a mining conference in Perth last week.