The Chamber of Mines fights back

[miningmx.com] – Decision by Mines Minister Ngoaka Ramatlhodi to renege on an agreement with the Chamber of Mines over publication of a report on empowerment in the mining industry has triggered the most serious public rift between Government and the mining sector since the ANC came to power.

Not only is the Chamber incensed by the publication of the report but it is furious over the tone of the covering press release from the Department of Mineral Resources (DMR) which sought to paint the mining industry in the most negative light possible.

The report was supposed to be held back until the outcome of a joint approach to the courts by the Chamber and the DMR to get a declaratory order on the issue of “once empowered – always empowered’ which is an area of fundamental disagreement between the Chamber and the DMR in the assessment of the empowerment status of mining companies.

At a press conference held in Johannesburg today Chamber chairman Mike Teke and CEO Roger Baxter along with vice-president Graham Briggs spoke out against the DMR and its actions using uncharacteristically blunt language.

The Chamber also released its report on assessing its members’ compliance with Mining Charter 2014 empowerment targets which differs sharply from that of DMR. According to the Chamber 100% of Chamber members have achieved the 26% ownership target versus a finding of 20% compliance overall by the DMR.

The Chamber said in a statement that, “these interpretational differences are the reasons why a declaratory order process is necessary in order to provide certainty on the matter.’

For the past decade the Chamber – and nearly all the mining industry’s senior executives – have avoided public confrontations with government despite repeated provocation from ANC politicans.

Reason – according to one mining industry executive speaking on condition of anonymity – is that “it’s not smart to argue in public with the landlord.’

The mining executives had hoped to sort things out behind closed doors avoiding public criticism of the DMR because of concerns over possible retaliatory penalisation of their operations.

According to chamber president Mike Teke , ” we have done more (on empowerment) than any other component of the private sector in South Africa. Yet there is no proper recognition in the statement released yesterday by the DMR that the industry has made any progress whatsoever.

” Instead of being accused of non-compliance we should be celebrating areas of success and working hard to correct gaps. The fact of the matter is that the mining sector in SA – despite tough economic conditions – has created a critical mass of black economic transformation that has become self-perpetuating.’

Teke added, “I would love to have a response from the minister on why he has done this and I absolutely do not know why the DMR has taken such a negative stance.’

Baxter has long maintained there has been an underlying “spirit of co-operation and understanding between the mining sector and government’ despite the public attacks.

Asked whether that was still the case he replied, “the events of the past two days might have undermined that but, up until this recent development, we had been making quite good progress. “

Asked why the Chamber had waited until now to take a tougher public stance against the DMR, Briggs – who is the CEO of Harmony Gold – commented, ” there is more and more from the Department the threat of invoking Section 47 which is basically removal of your mineral rights.

” That is a threat to the existence of the company. I am being blunt now but every company has to look at its shareholders and stakeholders and say how do we continue operating? This is a bit of a dark cloud over us.’