Miners building towers in Sandton are unlikely

Former gold-mining heavyweight Bernard Swanepoel, who as CEO of Harmony Gold had a deft turn of phrase, captured what is wrong with SA’s resources sector.

He noted that the plush new buildings constructed in Sandton were nearly all for law, auditing and consultancy firms. No mining firm has built a new skyscraper office in Sandton.

The reason, he contended, was that the complexities of mining and environmental regulations, and the need for companies to comply with reams of laws, mean junior mining is as good as dead in the water.

Who could pay for armies of lawyers and experts as laws and regulations become increasingly demanding and convoluted?

These comments were made about five years ago and they’re even more pertinent today.

There’s the third iteration of the Mining Charter that mineral resources minister Gwede Mantashe oversaw and gazetted late in 2018. It has ballooned to more than 40 pages from the original eight of 2004.

There are the proposed new regulations released suspiciously close to the end of the year, which will tighten the way the department enacts parts of the Mineral and Petroleum Resources Development act.

Lawyers welcomed the repeal of regulations on environmental compliance because they now fall under another act, but there was puzzlement at other regulations, particularly over those that dictated how companies must interact with the minister around restructuring and retrenchments.

There is also duplication of the Labour Relations Act, which strictly controls job cuts and how firms interact with unions.

As companies deal with the consequences of abysmal decisions by the governing party in the way state-owned assets have been managed and their balance sheets destroyed, this increased meddling by the state trying to manage the fallout as workforces are cut to manage costs, is an unwelcome addition.

In the wake of Sir David Attenborough’s pronouncement that climate change cannot be reversed, only slowed down, panic over its effects is making its way — sometimes forcibly — onto the agenda of corporate SA.

Climate change related questions were the defining feature of the annual general meetings of Sasol and FirstRand last week.

Sasol’s engagement with nongovernmental organisations who were permitted to ask questions at the meeting after they had obtained a proxy shareholding was more direct given that the company is one of the country’s largest emitters of carbon dioxide.

FirstRand was a different proposition, as SA’s largest financial institution’s carbon footprint is negligible compared to the Sasols and Eskoms of the world.

But what advocates were pushing for was greater transparency in relation to the carbon intensity of clients financed through the operation of its vast, R1-trillion balance sheet.

While FirstRand does not in any way dispute climate science, it says it needs more time to compile figures and intends to provide a full road map on climate disclosure in 2020.

While it can be relatively easy for boards to fob off requests from environmentalists for disclosure, the tone of the conversation changes when large pension funds raise the issue as shareholder of the business.