Why DA’s Mmusi Maimane would “rip up” the Mining Charter

Mmusi Maimane, federal leader of the Democratic Alliance

MMUSI Maimane, leader of South Africa’s Democratic Alliance (DA), would “… rip up the Mining Charter” in favour of identifying new, 100% black-owned mining companies entering the sector – a move that could be supported by “modern investors”.

A redraft of the Mining Charter has set down a provision for an increase in black economic empowerment targets of 30% from 25% for new mining licence applications, among other demands. The Chamber of Mines is taking the redrafted document on review in the High Court in December. In a separate legal action, the Chamber is seeking a declaratory order from the High Court on whether certain previous transactions can be recognised or if existing licence holders must continue to empower – an outcome that could see some firms potentially having to empower in perpetuity.

Maimane said the approach of increasing empowerment targets was the wrong one. “The problem with setting targets is that you are always – in the interest of popular rhetoric – having to change the goal posts,” he said. “Why can’t we rather frame the question differently and say: ‘Can we not have 100% black owned mining houses that are new entrants into the market?'”.

“That’s a different way to look at it, that’s the conversation we ought to be having,” said Maimane. “In the new entrants’ space, there would be majority black ownership just by virtue of what it is,” he said.

“So when we look at the industry in its totality, we can then build more companies and diversify ownership on the stock exchange rather than taking the narrow view of saying: ‘Let’s take what currently exists and chop it up,'” he said. Maimane was speaking in an interview with media on the sidelines of the Joburg Indaba, a mining conference.

He also said the African National Congress was unable to correct its approach to the mining sector because it was ideologically set against doing so.

“If you look at the recent [ANC] policy conference, you can draw the conclusion that the ANC is simply not going to get a plan for mining – regardless of who leads it – because the ANC’s mantra is that of the replacement of one racial elite for another. So regardless of who leads it, that is always going to be the fundamental [approach],” he said.

Earlier at the conference, Maimane outlined a number of steps the DA would take in respect of the mining sector.

In addition to “ripping up the new mining charter”, he recommended a re-write of the Minerals & Petroleum Resources Development Act (MPRDA,) which is South Africa’s keystone mining legislation. He also recommended acknowledging previous empowerment deals so that the regulatory environment was more sympathetic to “modern investors”.

“We must provide regulatory certainty,” said Maimane. “It must be simpler and clearer. And interpretation [of mining legislation] cannot depend on goodwill of a government official.” Maimane was referring to shaft and mine closures by officials from the Department of Mineral Resources where an injury or fatal accident had occurred.

South Africa’s mining sector has reported heavy losses in mining production owing to mine closures for sometimes minor ‘safety transgressions’. “There can’t be shut downs for 48 hours. It should not depend on the goodwill of that official,” he said.