The South African govern- ment was clear on the role it had to play in normalising the country’s mining industry, Finance Minister Pravin Gordhan said last week at a Bloomberg and Business Day breakfast, in Johannesburg.

He added that, in the global context of financial markets losing confidence in the mining industry, as was recently pointed out in a report by PricewaterhouseCoopers, titled ‘Mine: A Confidence Crisis’, government had to ensure that the South African industry returned to a desirable level of productivity.

Gordhan is part of the govern- ment team led by Deputy President Kgalema Motlanthe, which brought unions and employers together earlier this month to solve the problems facing the beleaguered mining sector.

“Government had a responsi- bility to help normalise the labour relations environment and return the industry to organised collective bargaining,” Gordhan said.

However, government also had a responsibility to inform South Africans that returning the industry to its former position would be more difficult than what it had been in the past, as the migrant labour system would now also need to be addressed.

The migrant labour system was solidified by the 1913 Land Act, which formed part of an economic strategy aimed at driving people off the land, thereby ensuring that they became migrant labourers, while providing cheap labour for the mining industry, Gordhan said.

“Today, we have to confront the migrant labour system. We want South Africans to understand the conditions from which mineworkers come and the state of their ‘sending areas’. We need people to understand that we all need to invest in these sending areas to ensure that they are being developed,” he stated.

Gordhan stressed that South Africans also had to understand that there were new labour dynamics at play.
“Organised elements that differ from those of the past have emerged and it is our responsibility as government to ensure that the Labour Relations Act be adapted where necessary to accommodate the shifts that are taking place in the industry.”

He also said that government was fully committed to ensuring, through the National Infrastructure Plan, that logistics were continuously improved, enabling the mining industry to thrive.
“Hopefully, we will soon also be a step ahead with our energy requirements so that energy will not be a constraint to mining or any other part of the economy.”

Speaking during a panel discussion at the breakfast, JSE- and NYSE-listed AngloGold Ashanti CEO Srinivasan Venkatakrishnan (Venkat) acknowledged the challenges faced by the South African mining industry, but highlighted the country’s success in dealing with challenges in the past.

“From 2004 to 2007, when the royalty regime was being introduced in South Africa, there was a lot of scepticism, but careful consultation resulted in a well-balanced royalty regime being established. Then, in 2007/8, South Africa had an electricity crisis and the investment community predicted power outages at the mines for years to come; however, this was avoided.

“After this, the industry was faced with the threat of nationalisation, which also passed after Mineral Resources Minister Susan Shabangu made it clear that this was not public policy. In addition, there were issues involving tenure security and the security of licences, which have also been addressed.

“This history demonstrates the ability of the mining industry, along with its stakeholders, to successfully mitigate challenges,” Venkat said.

He said current labour relations issues centred on whether the rule of law and stability would prevail and whether mines could operate without the threat of violence was currently more prevalent than wage negotiations.

Venkat did not believe that the industry would see a repeat of the events in August last year, when 45 protesting miners lost their lives at the Marikana mine, in Rustenburg, as mining companies, union leaders and government were currently better prepared to deal with labour issues.

“More importantly. . . the entire group of stakeholders are coming together to ensure that a settlement is reached, not only in terms of wage negotiations but also in terms of community relations and. . . how law and order is enforced in terms of putting an end to violence in the mining sector,” he said.

Venkat added that the various stakeholders were close to reaching an agreement that would ensure stability in the sector, which would lead to a positive change in investor sentiment.