‘Once empowered, always empowered’ principle still centre stage

THE most topical — and contentious — of the many issues concerning South Africa’s mining policy at this year’s Mining Indaba will be the long-awaited review of the industry’s transformation charter and how it relates to the “once empowered, always empowered” principle espoused by the Chamber of Mines.

The industry, backed by the chamber, insists that miners have met their empowerment obligations — no matter their success — under deals struck at the turn of the century.

The government, however, wants those deals invalidated when black ownership falls below 26%.

Mineral Resources Minister Mosebenzi Zwane is set to release the final draft at the end of March, and companies are already calling for regulatory certainty.

Ajay Lalu, MD of Blacklite Consulting, said Zwane was under significant pressure to meet the deadline for the final draft — especially as it had been extended several times.

The Chamber of Mines took the Department of Mineral Resources to court to demand clarity on the issue, and then decided to continue engaging with government until an amicable solution was reached.

Lalu said the industry would continue legally challenging the matter but the government was unlikely to ever endorse the once empowered, always empowered principle.

“There is no precedent for a principle like this, and if you set it for the mining industry what makes financial services or media companies or manufacturing companies any different?

“What would stop them from demanding the same recognition for having done empowerment deals? I think government would be setting an extremely dangerous precedent by acceding to the once empowered, always empowered principle,” Lalu said.

This would defeat the purpose of economic transformation.

Ayanda Bam, founder of Kuyasa Mining, said the use of shares to facilitate the entrance of black people into the mining industry was problematic.

“Selling people shares as a form of changing the face of the economy is self-defeating and will not work,” Bam said.

He said facilitating the tangible involvement of black people in the economy by all parties — government, companies, investors, banks and communities — is more sustainable.

The bid to transform the industry had not failed because black shareholders had sold their stakes — that was what shares were for.

Black miners such as Sipho Dube, chairman at Endulwini Corporation, insist the 26% black ownership empowerment rule is not restricting investment in South African mining.

Dube blamed those in control of the industry for restricting the entrance of black players in to the sector.

He said that if Zwane accepted the once empowered, always empowered rule the decision would be challenged.

If other industries accepted the decision they would not be supporting transformation.

Selling people’s shares to change the face of the economy is self-defeating