Marikana tragedy dubbed a “massive policy failure”

[miningmx.com] – THE slaying of 34 protesting miners at Lonmin’s
Marikana platinum mine in August has been labelled “a massive failure of government
and corporate policy’.

Speaking at the Junior Mining & Exploration conference held in Johannesburg,
prominent mining industry players said the failure of local government, national
government policy on mining and corporate policy had combined into social discontent
that was not a surprise.

“The worst thing about Marikana is that it was so completely predictable,’ said Mike
Solomon, executive director of J&J Group and a former CEO of Wesizwe Platinum, who
was also involved in helping to formulate South Africa’s minerals legislation in the
Nineties. “South Africa was 10 years ahead in its mining policy, but now it finds itself
overtaken,’ he added.

Peter Leon, head of Africa Mining & Energy Projects at Webber Wentzel, an firm of
attorneys, said the social discontent currently expressed in the wave of strikes in the
mining sector was rooted in the way minerals legislation, the Minerals and Petroleum
Development Act (MPRDA), was framed.

“The legislation did not promote broad-based empowerment. It is quite possible for a
mining company to sell shares to a group of wealthy black business people, but there
is no obligation to broaden it,’ he said. “Broad-based BEE should be mandatory.’

Both Solomon and Leon warned about the perils of significantly altering mining
legislation as contained in a government-backed State Intervention in Mining (Sims)
report, completed about a year ago and which recommended steps such as a resource
rent tax.

However, Nchakha Moloi, executive chairman of Motjoli Resources, and who was a
member of the minerals resources department shortly after promulgation of the
MPRDA, said South Africa should take the lead of other African nations where more
sweeping legislative changes were underway.

Zimbabwe had implemented its indigenisation programme in which 51% of companies
operating in the country were sold to Government, employees and the community,
while the Democratic Republic of Congo was mulling proposals allowing its
government to take a 31% stake in new mining projects.

“Compromise and consensus has weakened South Africa,’ said Moloi.”We need a new
approach and agreement that dispenses with the feel good factor of compromise as
that doesn’t deal with the real issues,’ Moloi said.

Michael Spicer, vice-president of Business Leadership SA, said there had been too
much blame-mongering in the wake of Marikana and disputed Moloi’s call for the
abandonment of compromise.

“Compromise and consensus is part of the social compact,’ he said, recommending
improvements in productivity as a means of retaining and growing jobs, providing
Government greater access to rents, and improving the trading margin for mining
companies.

Policy uncertainty in South Africa’s mining industry was systemic as there were
competing economic policies more broadly in the South African Government, he said.

“The mines minister has a view but her colleagues are operating in a different
universe, nevermind a different world,’ Spicer said.