[miningmx.com] — WHAT to make of Susan Shabangu’s reign as South Africa’s minister of mines became a regular point of discussion at last week’s Mining Indaba, after several engagements during which she attempted to assure her audience that she has her finger on the pulse of the industry’s ills.
As these things go, her forthright rejection of nationalisation and belittling of ANC Youth League president Julius Malema’s influence over policy caught the most attention.
This was not unwarranted, and judging from the continually concerned comments of prominent mining CEOs and foreign fund managers, fears of a dramatic shift from current policy show there is more to the issue than Malema being given too much airtime by the media.
Emotions around nationalisation aside though, Shabangu’s tenure as mines minister will not be judged on her winning or losing a standoff with Malema & Co but whether she succeeds in instilling some badly-needed regulatory certainty and confidence.
To this end, two key events scheduled for this year may be significant: the fine-tuning of the Mineral and Petroleum Resources Development Act (MPRDA), which Shabangu herself admitted contained too many ambiguities, and the adoption of an online rights application and processing system which, if it functions properly, may allay general frustration around the lack of transparency and efficiency in the current process.
She alluded to some of the focus areas amendments to the MPRDA will make provision for, one being to ensure local communities get a bigger slice of the wealth creation pie.
Building a village hall is not enough, she said, emphasising that government would like to see more effort going into the creation of sustainable jobs in communities.
Additional to this will be clearer definitions of what communities entail and who may act on their behalf – stipulations which may go some way towards negating an increasing trend where community factions take part in competing applications for the same mineral right.
The amended act will also close the loophole which enabled some old order rights holders to cling on to their assets, even though their new application failed to meet criteria for a new order right. This was courtesy of the stipulation that an old order right holder may not be refused a new order right.
Other issues she alluded to include stricter measures to avoid mining in environmentally sensitive areas, as well as clarity around the rights of mining associated minerals.
The full extent of possible changes will only be known around April, shortly after the department of mineral resources (DMR) submits its amendments to the cabinet. As long as the overhauled legislation does not contain any radical departures – with their own new sets of ambiguities – it would go a long way to restore confidence in the regulatory system.
SOME TRANSPARENCY
The launch of the online mineral rights application system – promised to come online as soon as the DMR lifts the moratorium on the acceptance of new prospecting rights applications in March – will also bring a degree of transparency to the rights application process, insofar as it will allow any interested party to see who owns or has applied for rights.
However, it remains to be seen whether the system will be able to make up for existing administrative deficiencies within the department. In the end, every piece of evidence submitted as part of a rights application will still have to be reviewed by a departmental official.
If the DMR hasn’t jacked up its own processes and systems since Shabangu promised to halve the application waiting times at last year’s indaba, the online system will continue to show “decision pending’, only this time for the whole world to see.
Such a predicament would expose one of the main factors that may cause Shabangu’s tenure to be a failure – a malfunctioning department that cannot execute the policies of its political head.
Trevor Manuel’s 13-year reign as minister of finance has often been lauded as a model of efficient governance. Yet Manuel made sure he had the people to get the job done, ie Pravin Gordhan at the South African Revenue Service and, before she moved on to Transnet, Maria Ramos at Treasury.
And even then it was a painstakingly slow process, spanning a good four to five years, to instil trust that the revenue collection system was relatively efficient and fair, and that it had the ability to enforce compliance.
In this regard, the fact that many senior positions in the DMR are occupied by acting managers is a big problem, but it may also be a window of opportunity.
It also remains to be seen whether President Jacob Zuma will delegate to her the responsibility of appointing a new director general in the place of Sandile Nogxina -expected to announce his retirement soon – or whether Zuma would prefer to choose his own man in this critical position (think Menzi Simelane at the National Prosecution Authority).
Shabangu may find her biggest challenge to be filling these vacancies with competent and motivated candidates. If she fails to do so, she may become known as the minister who knew what to do but haven’t had the means to do so.
