Minerals Council members guilty of uneven disclosure

IS the South African mining industry withdrawing from public engagement?

There was a time when the vast majority of South African mining production was represented by public companies listed on the JSE, with all the necessary public disclosure that a listing entailed. It was these companies that were the members of the old Chamber of Mines and it was these companies that negotiated the 1998 white paper that morphed into the MPRDA in 2002 and the related Mining Charter of 2004.

Interim and final results announcements were routinely published in the business sections of daily papers, in at least two languages. Annual reports were posted to thousands of individual shareholders all over the country. CEOs lived in Johannesburg and a large community of equity analysts poured over the details of any disclosure. Public disclosure was simply a given, and it probably never crossed anyone’s mind that mining wasn’t a broadly transparent industry. It may be for this reason that there are no meaningful ongoing transparency obligations on industry participants in the MPRDA or Mining Charter.

The 2023 edition of the Joburg Indaba mining conference was held this week. The successor to the Chamber of Mines, the Minerals Council (MCSA) was represented. But what is telling is how things have changed. Some companies like Anglo American, Sibanye Stillwater and Harmony are present and involved and publish ever increasing reams of disclosure, even if it is now digital and not in print.

But there are also large mining companies operating in South Africa who now disclose nothing at all. Or they concentrate on disclosure in their foreign home markets where they may be listed, and where the South African operations might not be financially material. To their credit some are participating in the conference, but many are not.

Back in 2004, 90% of South African coal was produced by listed companies. Now less than half is. The majority of chrome mining in South Africa now happens in the dark. Likewise manganese mining. The South African mining industry is undoubtedly increasingly opaque. And repeated failed promises, multiple court cases and allegations of endemic corruption and incompetence in the DMRE suggests that the industry’s regulator is maliciously anti-transparency.

But the villain of this piece is the Minerals Council of South Africa itself. They have a much vaunted Members’ Compact that all members are required to sign up to. This Members’ Compact virtuously requires all members of the council to commit to transparent engagement with stakeholders, but in a breathtaking case of hypocrisy the Members Compact sets precisely no standards for this disclosure, making the transparency undertakings of the compact entirely meaningless.

So the fairly recent Damascene conversion by the MCSA in favour of a transparent mining cadastre must be juxtaposed against their own manifest failure to embrace transparency themselves. At a bare minimum all operating mining companies, regardless of whether they are listed or not, should be required to publish a sustainability report to South African stakeholders. That should not be too much to ask of companies which have been licensed to exploit South Africa’s mineral resources with all the impacts, positive and negative, that this has on the environment, the economy and society at large.