Mineral Resources Minister Gwede Mantashe has noted that the free-carried interest stipulated in the latest draft of the Mining Charter would result in workers deriving immediate value, thereby fostering diligent performance and loyalty towards employers, as workers strove to enhance and improve “their” mine.
“It is the workers who convert every investment into wealth . . . without workers, there would be no dividends; hence, the issue of the 5% free-carry for workers.”
He said at the official opening of Sasol Mining’s Secunda-based Shondoni colliery last week that the free-carry stipulation had far more implications than just monetary ones, noting that it effectively amounted to companies investing in their relationship with their employees and affected communities.
Mantashe pointed out that communities would be unlikely to embark on violent protests against mines in which they were actively “invested”, while more workers would be more cognisant of the factors and challenges facing the company if they were shareholders.
He noted that companies that believe that they need only enrich and answer to shareholders were employing a “backward way of thinking”.
Mpumalanga Finance, Economic Development and Tourism MEC Eric Kholwane agreed on the importance of the free-carried interest, stating that it would prevent communities from becoming “restless.”
He stressed that it was evident that the “good policies” in place did not seem to result in meaningful benefits for the people in the Mpumalanga province. He reported that his constituents had expressed a desire to have some sort of ownership or stake in the mines within their communities. Additionally, he suggested that government look into assisting small-scale miners, instead of ‘relegating’ them to illegal mining by ensuring that the industry did not preclude artisanal miners.
While lauding Sasol for the role it had played in the province, and the contributions it had made in terms of assisting the province in meeting its socioeconomic goals, he added that he “hope[d] that the free-carry increases the quantum of their assistance”.
Mantashe said transformation was not a compliance issue, but a business imperative.
On the issue of ‘once empowered, always empowered’, he stated that no one, and especially not the Department of Mineral Resources (DMRs), could find fault with a successful black shareholder or black economic empowerment partner taking his or her investment elsewhere, but that the problem lay in those black shareholders who were pushed out. “In that case, you cannot say they are empowered.”
Mantashe noted that the DMR had been approached by shareholders who had been pushed out of empowerment deals.
He stressed that, in drafting the revised charter, the DMR strove to ensure that it remained cognisant of employing measures that would not hinder competitiveness or growth, “because a competitive industry will lead to growth and meaningful transformation.”
Mantashe noted that the country could not grow its economy by focusing on the macro level, stressing that more emphasis should be placed on micro factors.
He reiterated his distaste for mining companies placing mines with economic deposits on care and maintenance, noting that these companies were contributing negatively to production and employment figures. He suggested that larger companies should enter into operating agreements with smaller companies with smaller overheads, which might be able to generate better margins when mining such deposits.