JOHANNESBURG (miningweekly.com) – Slow transformation in South Africa's mining industry has sparked, and is driving, the debate around the nationalisation of the country's mines, said South African Mining Development Association (Samda) chairperson Nchakha Moloi.

Speaking at the Mining for Change conference in Johannesburg, on Monday, Moloi pointed out that even though South Africa had sufficient laws in place, such as the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter, a midway review in 2009 indicated that targets for black empowerment were not being met, and that it was unlikely that the 2014 targets would be achieved.

South Africa has set a target of 15% black ownership by 2009, and 26% by 2014. Mining companies also needed to reach a target of 40% representation of historically disadvantaged South Africans at management level by 2009.

Further, the Charter requires the mining industry to improve mineworkers' housing, nutrition, literacy and employment skills.

Moloi pointed out that not one of these targets had been sufficiently met, when reviewed in 2009.

A study carried out by KIO Advisory Services, on behalf of Samda, has shown that black ownership among the JSE's top 25 mining companies was about 5% at the end of March this year.

"The realisation that we are not moving as fast as we would like to in the transformation of the mining sector has started a number of peripheral policy debates around the nationalisation of the mining sector and the establishment of the State mining company.

"We need to do something and it needs to happen very fast in terms of ensuring that transformation does happen, and that the transformation that does take place is deep and meaningful."

Currently, the Department of Mineral Resources is going through the process of reviewing the MPRDA and the Mining Charter. "The aim of the review is to fundamentally clarify the issues that were previously unclear and subject to interpretation, as well as opting to strengthen the administrative processes in government to ensure that the law is implemented, evaluated and monitored on an ongoing basis," said Moloi.

He added that it was unlikely that the review would lead to an upward trajectory of BEE targets, but it would rather opt to enforce the laws in a stricter manner and to eliminate any room for misinterpretation.

Moloi said that the drive for black empowerment was not to "create islands of wealth in a sea of poverty."

He noted that the fact that these islands have sprung up in South Africa, and in the mining industry specifically, meant that BEE policies had not been implemented correctly.

"These policies need to drive broad-based black economic empowerment which it was intended for, and, ensure that mineworkers, as well as the general communities benefit from it."

Moloi emphasised that the development of an industrial policy framework for the mining sector, which would complement the longer-term development goals of the South African government was needed to speak to broader developmental issues.

Such an industrial policy would be aimed at a growing and diversified mining industry, characterised by an expanded production value chain that would assist in absorbing the country's labour surplus and its related developmental deficits.

"This would steadily shift South Africa away from the historical dominance of the minerals and energy complex towards more diversified product and exports, needed for future sustainability," concluded Moloi.