THE long and possibly torturous road in getting the South African government to renegotiate the third draft of the Mining Charter began in earnest today after the Chamber of Mines met the African National Congress (ANC).
The Chamber said in an announcement that its office bearers expressed their dissatisfaction with provisions in the Charter “… in terms of both the flawed process and content”.
The Chamber also advised the ANC on court actions that are being prepared which include taking the Mining Charter on review and implementing an interim interdict whilst the court decides on the merits of the review. The Chamber is also setting in motion its High Court application for a declaratory order on the matter of ‘once-empowered, always-empowered’ which the new Mining Charter would appear to deny.
Roger Baxter, CEO of the Chamber of Mines, said in the announcement that the Mining Charter had ‘failed’ to set workable targets and guidelines in the context of a competitive market.
The meeting with the ANC comes against a backdrop of discontent among some of the ruling party’s representatives with the Mining Charter, principally the economic transformation committee which is concerned about the impact on jobs as a result of the increased empowerment targets to 30% ownership from 26% currently.
Analysts believe political infighting, including the struggle for the future of the ANC itself, may be playing itself out in the Mining Charter discussion as indeed it is in other government departmental matters.
“The industry will no doubt be engaging with Government wherever it can find an audience,” said Nedbank Securities analysts Leon Esterhuizen and Arnold van Graan in a recent research note.
“The botton line is that the industry will have to fight hard to get Government back to the negotiating table. History tells us that it is previous Government policy to hit the market hard with the crazy case, and then deliver a more workable but still heavily dilutive case further down the line,” they said.
Said Andrew Snowdowne, an analyst for Investec Securities: “Mining companies are possibly being caught in the cross hairs of local politics and posturing ahead of the ruling African National Congress’s leadership conference in December”.
Esterhuizen and Van Graan believed, however, that damage had been done. “So although we do not see this Charter in its current form ever taking full effect, in the end we believe our mining industry has taken a body blow that will result in its early demise,” they said.
According to BusinessLive in a report on June 19, the ANC delegation was to consist of mines minister, Mosebenzi Zwane as well as former finance minister, Pravin Gordhan, the current finance minister, Malusi Gigaba, and ANC national executive committee members Enoch Godongwana, Ebrahim Patel and Gugile Nkwinti.
