Buyelwa Sonjica, Minerals and Energy Minister, South Africa

SA govt swings left, new mines head

Allan Seccombe | Sun, 10 May 2009 19:17
[miningmx.com] -- THE mines and energy ministry in South Africa has been split into two portfolios by new president Jacob Zuma, who has extensively shuffled his cabinet, creating new posts and bringing in unionists and Communist Party members.

The make up of the cabinet announced on Sunday can be directly linked to the struggle within the ruling party for not only the presidency of the African National Congress but the country.

Zuma was swept into power with the direct and muscular support of the powerful trade union federation, the Congress of South Africa Trade Unions, and the South African Communist Party, who were disenchanted by his predecessor Thabo Mbeki.

The two groups are in an alliance with the ANC, but have never had this level of representation at the upper echelons of government.

Zuma was sworn in on Saturday as South Africa’s third president since the advent of democracy in 1994.

The most high-profile ministerial change is the posting of Trevor Manuel; the world’s longest-serving finance minister and one who was highly regarded, as minister in the presidency in charge of national planning.

Manuel was replaced by Pravin Gordhan, the head of the South African Revenue Service, a decision seen by market commentators as offering continuity and going some way towards appeasing the markets.

The mines and energy minister, Buyelwa Sonjica, who was appointed to the position in May 2006, has been moved to the water and environmental affairs ministry. It is a post that will still involve close involvement with mining companies seeking environmental approval for their projects as well as water licences.

Too much for one person

There had been criticism that the portfolio was too large and entailed too many disciplines for a single minister.

The weekly Mail & Guardian, which compiles a regarded annual report card on cabinet ministers’ performances, graded Sonjica “F” for her efforts during 2008, down from a “B” the year before.

The newspaper said the mining sector in South Africa had stagnated during a period of high commodity prices, and it lambasted the country’s power strategy.

The mining portfolio is now headed by Susan Shabangu, who in her time as deputy safety and security minister provoked a storm of debate last year over her comments that the police should shoot criminals and “kill the bastards”. She has a strong history in trade unionism.

Shabangu, who was born in February 1956, is not new to the mining sector, having served as the deputy mines and energy minister for eight years up to April 2004.

It's too soon to say what will happen to the department and where the all-powerful director general Sandile Nogxina is going. He was the power behind the throne and it will be interesting to see which portfolio he tracks. It's most likely to be mining. This is the year in which the mining charter, which governs the level of black-owned equity mining companies are obliged to have amongst other issues, is reviewed.

There is trepidation in the industry that the targets could be changed, with higher levels of black ownership demanded from the government or more onerous conditions placed on them by the state wishing to drive transformation of the traditionally white-owned sector.

It is also a year in which we are likely to see greater state involvement in the mining of minerals. The South African government is re-activating a dormant state-owned mining company to begin buying and operating assets in the mineral sector to secure stakes in strategic commodities.

The energy ministry will be headed by Dipuo Peters, a woman who was the premier of the sparsely populated Northern Cape province, where diamond giant De Beers had its Kimberley mine and which is home to South Africa’s iron ore industry.

Her history doesn’t shout expertise in the complex and critical energy portfolio. Since graduating with a Bachelor of Arts degree in social work from University of the North, she hasn’t strayed far from those interests.

South Africa’s mining sector was brought to a week-long standstill in January last year when state-owned power utility Eskom ran short of power.

The power situation has since eased, with mines using less power as well as a large swathe of ferrochrome furnaces being shut down because of a downturn in the stainless steel industry.

In this time of global economic uncertainty, is this the time for Zuma and his party to be pandering to groups who brought him to power and expanding the size of his cabinet, granting executive roles to people who have no experience of government?

Or is this a smart political move to bring his administration closer to the people supporting his party, the majority of who are unemployed and disenchanted with the ANC under Mbeki. Mbeki was widely regarded by the poor as an aloof intellectual who pandered to the party’s elite.

Whatever it is, Zuma has a real challenge on his hands. He’s got to address rising levels of unemployment, increased levels of dissatisfaction with service delivery, and at the same time ensure investors aren’t spooked by the apparent swing to the left and decide to take their money elsewhere in this time of global economic uncertainty.