JOHANNESBURG (miningweekly.com) – In light of all the downscaling activity in the local mining industry, Mineral Resources Minister Ngoako Ramatlhodi on Thursday said he was “alarmed at the rate at which retrenchments have been taking place”.

Most recently, platinum miner Lonmin announced that it was looking to scale down by about 3 500 workers, but that the process would be through voluntary separation packages.

Speaking to the media on the outcomes of a meeting of the Mining Industry Growth, Development and Employment Task Team (MIGDETT), in Pretoria, Ramatlhodi added that a subcommittee would be tasked to look into the matter of retrenchments and report to the task team.

He added that the State needed to ensure that there was a regulatory environment which allowed the industry to be sustainable, but where jobs were protected and more jobs were created. “We also need to ensure that transformation takes place in a meaningful way – today’s meeting speaks to that,” he said.

On the notion that the South African mining industry was in its sunset phase, particularly with softer prices in the platinum sector, Ramatlhodi admitted that “we are in a sick environment, in a polluted environment as an industry”.

Meanwhile, the Chamber of Mines (CoM) said in a statement that, despite the turbulent global conditions, the South African mining industry, and more specifically CoM members, had made “significant progress” on all elements of the Mining Charter – including meeting and exceeding the ownership target.

“[We] are committed to building the mining industry and helping to achieve the strategic objectives of the National Development Plan,” it said.

It further pointed out that it had not agreed to any MIGDETT-sanctioned target regarding job losses. “The chamber urges all stakeholders to play their role in managing the viability crisis, to reduce cost pressures and to manage the viability challenges the sector is facing,” it said.

NOT SITTING AROUND THE SAME FIRE
On rumours that there was strife between the Ministry, the National Union of Mineworkers and the Association of Mineworkers and Construction Union, Ramatlhodi said: “The relationship between unions and the Ministry [is healthy]", adding that he was not aware of any strange relations between the parties.

“There are areas where we will disagree from time to time and that will happen all the time, but the critical thing is that we are going to fight a common [enemy] to keep us together, [as] we represent diverse interests.”

However, the CoM made a different case in its statement, disagreeing with a number of the Ministry’s findings.

The chamber stated “unequivocally” that it was unhappy with the rushed MIGDETT process on the Department of Mineral Resources’ (DMR’s) Mining Charter progress report. “[We] have not been given the opportunity to properly interrogate the DMR’s progress report and have not even been given a copy of the report.

“The MIGDETT process has been rushed and does not adequately cover the key principles of fairness, transparency and effective stakeholder engagement, which are the traditional hallmarks of the MIGDETT process. What the chamber has seen is a truncated presentation,” it stated.

It added that it would continue to engage government on all issues that are inhibiting the growth and transformation of the mining sector. However, for the government to be “shifting the goal posts midstream and for stakeholders to continue to incorrectly accuse the industry of noncompliance is both damaging to trust and investment in the mining sector”, it said.

The DMR said that, at face value, 79% (unweighted) of submissions of the industry had reportedly met and exceeded the target of 26% historically disadvantaged South Africans (HDSAs) shareholding with a total industry simple average HDSA ownership of 30.6% (unweighted).


“However, the DMR in its own interpretation of meaningful economic participation is now of the view that mining companies have to not only do narrow-based empowerment transactions, but have to also include community and employee ownership schemes, which they say on a weighted basis only 20% of the transactions comply with.

“The chamber does not share this interpretation and is firmly of the view that 100% of its members have achieved the 26% ownership target. These interpretational differences are the reason why a declaratory order process is necessary (and was agreed between the stakeholders) to provide certainty on the matter. This in addition to the continuing consequences limitation,” the chamber stated.

“Nevertheless, on the basis of the DMR releasing its report, we have no option but to make sure that the correct facts, based on our interpretation, are on the table.

“Based on independently completed research covering 85% of the value of the mining sector, (work completed by Rand Merchant Bank and audit firm SizweGobodoNtsaluba with the Chamber), the mining sector has achieved a weighted ownership target of 38.5%, which significantly exceeds the 26% targeted level and demonstrated meaningful economic participation by HDSAs,” it said.