WAS it coincidence that led the Chamber of Mines (CoM) and the Department of Mineral Resources (DMR) to hold separate press conferences following yesterday’s annual general meeting of the CoM?
Even if it weren’t, the likelihood is that, notwithstanding public comments to the contrary, the sides are not substantially close on matters of detail in the mining charter negotiations.
It does seem, however, that the CoM has regained its composure after the initial shock of the new charter’s appearance on April 14 in parliament, where it was gazetted.
“It was unusual because normally the government doesn’t make a draft public,” said Roger Baxter, CEO of the CoM. “It’s normally discussed,” he said, although he added that the relationship with the DMR was “back on track”.
To be fair to the government, the appearance of a new charter shouldn’t have been the surprise it was widely depicted to be in the media.
DMR director-general, Mosa Mabuza, briefing parliament on the Mining Charter Assessment Report in August last year, said a new charter would be ready by the end of the fiscal year.
(He also raised the prospect of increasing sanctions for non-compliance with a new charter. At the moment, economic sanctions for failing to meet charter goals are quite light. The maximum fine is R500,000. “We’re going to align the sanctions with those of the Competition Commission whereby we’ll take 10% of you income – that will be a good deterrent,” said Mabuza at the time).
However, the fact the government gazetted the charter at it did shows relations between it and the mining sector weren’t in a particularly good place.
Firstly, the government was forcing the attention of the mining industry away from the High Court, where it is contesting the original charter, back to the negotiating table. Secondly, the government was aggressively making the point that this time around, it intends to set the tone of the new charter debate, and even its limits.
(Remember, at the time the last charter was written, it was the private sector that suggested the 26% target. For its part, government was on the back foot following the leak of its proposals which were tantamount to nationalisation of the mining sector).
“We have said to the chamber: our duty is to legislate; that is our duty. As we have legislated, we now call upon for engagements,” said Mosebenzi Zwane, South African mines minister, in his press briefing yesterday.
As for negotiations around the document, the CoM and the DMR are clearly still at odds regarding the key government-backed element of perpetual empowerment.
Government wants the mining sector to always make sure 26% of equity is in the hands of previously disadvantaged South Africans (HDSAs). The industry may be able to insist on lock-ins of HDSA partners so as to protect its future, but doesn’t help those companies that may have to re-empower themselves.
This is certainly what the minister wants. He called on Mike Teke, president of the CoM, to nominate 10 new HDSA entrants to the mining sector over the next few years.
Asked by Miningmx what he meant by this, Zwane said the 10 HDSAs issue was a hypothetical number plucked from the skies to make the point that the government wants more transformation, and for it to be measured.
“It would be nice if we could measure this transformation,” he said, implying that the previous charter was a failure of criteria rather than of endeavour and achievement.
“Let’s be measured on where we are going. I don’t see that as a sticking point. We just have to structure the sticking points,” he added. Negotiations were at the nitty-gritty stage, he said.
It’s clear Zwane is sticking to the idea that the industry has to embark on an entirely new process of re-empowerment, and that he wants to be the agent to bring it about; himself personally.
“I said to the chamber, I am not Ngoako Ramatlhodi or Susan Shabangu [former mines ministers]. Allow me my space; let’s turn a new page,” he said.
The question Miningmx put to Baxter is whether the chamber would seek a political resolution to the charter impasse; that in agreeing to certain charter demands it could extract concessions elsewhere in the complicated relationship between state and private sector.
Might the chamber drop its High Court challenge, which could be highly embarrassing for the government as it normally loses in court over issues of the flimsily written mining charter, in return for new charter concessions for instance?
“Court processes take a very long time,” said Baxter who added that the two sides were making good progress. The answer is never: the courts are the private sector’s last (and best) resort when being asked to do the impossible, as they now are.