AFRICAN Rainbow Minerals (ARM) chairman, Patrice Motsepe, has sounded a dire warning over the “highly politicized” interaction between the mining sector and the local communities where mines operate saying this situation has become critical.
In a hard-hitting assessment – delivered during the ARM interim results presentation in Sandton today – Motsepe said that: the mines could expect no help from the South African government in dealing with communities; that the communities were being advised by political activists who “can’t even fasten their shoelaces”; and that he would shut a mine down rather than agree to unreasonable demands from communities threatening civil unrest campaigns.
Motsepe was speaking against the specific background of ARM’s troubled Modikwe Platinum mine near Steelpoort which has been hit by technical mining problems and by civil unrest from the local communities, but he indicated this was an industry-wide problem.
ARM took an impairment charge amounting to R734m after tax against Modikwa in the six months to end-December during which Modikwa increased its headline loss to R54m (2015: R47m headline loss) while the mine is continuing to make losses because of a slower ramp-up of production at South 2 shaft. Overall, ARM reduced its loss for the six months to R283m (2015: R1.27bn loss).
Motsepe recently paid a visit to Modikwa to attend a mass meeting with workers and talk to the local communities. “I needed to sit down and listen personally to what employees and community members had to say. It’s a very important learning experience,” he said.
Commenting on community demands, Motspee said: “They want more equity; they want dividends to flow from that equity even when dividends should not be paid because you are investing for the future; they want more contracts and tenders to be awarded to locals and they want more senior positions to be occupied by locals.
“We have to engage very seriously with the communities, in particular because the capacity of the business constituency in this country to influence policy making is zero at best.
“The business community must understand that the politicians will throw us in front of any bus or any train that comes along if their choice is between the votes they get from the communities and the business community that we represent which is seen to have made lots of money”.
Motsepe added: “Twenty to thirty years ago the entire South African mining industry operated in an environment where workers and communities had no vote, but we are now living in a democracy. We are learning the new rules, but the answer is to educate the people and build trust and credibility.
“Nobody will get a job on principals other than that you are the best person for the job and if you train the local people then they will get those jobs.”
But Motsepe took a hard line on politically-motivated community action such as civil unrest aimed at interrupting mine operations. “I will threaten to shut them down. This is important. If we don’t work together and make the mine successful then we are going to close the mine.
“There are others who are misleading the communities for political reasons – saying ‘let them close the mine because we will run it ourselves’, but they can’t even fasten their shoelaces. I don’t want to mention names of those political people because I have to work with everybody,” he said.