JOHANNESBURG (miningweekly.com) – Shadow Mineral Resources Minister James Lorimer forecasts that South Africa’s new minerals legislation and new charter will be “disastrous” for an industry already crippled by hugely diminished capital injection and massive year-on-year job loss.
The Opposition Democratic Alliance (DA) MP, who delivered his Budget speech earlier this week, says that despite South Africa’s sumptuous mineral endowment, capital investment in mining is half of what it was in 2007 and 31% down on 2013.
He decries the inability of South Africa’s Department of Mineral Resources (DMR) to deliver legislation and condemns the DMR’s “ridiculous decisions” that have resulted in a series of lost court cases, even against own staff.
Lack of enforcement is resulting in thousands of illegal miners operating in underground gold mines in the Free State, large numbers of illegal chrome miners illegally moving a million rand’s worth of chrome a day in Limpopo, and illegal sand miners getting away with stopping and then restarting illegal mining activities at Agate Terrace, near Port St Johns, in the Eastern Cape.
He predicts that the DMR’s attempt to make up for the flaws in the Minerals and Petroleum Resources Development Act Amendment Bill – which he describes as “still winding its way through the National Council of Provinces process”, three years after first being passed by Parliament – will probably render the entire legislation unconstitutional when it is finally passed, with two organisations already lining up to challenge it in court.
After months of ignoring the industry’s attempts to discuss Mining Charter 3 – the initial version of which would make legal mining a burden hardly worth bearing – DMR/industry contact is at last taking place, but with unknown outcomes.
The DA’s focus, he says, would be on the hugely important positives that mining delivers, like empowerment, foreign exchange, local infrastructure development, tax revenues and, most importantly, employment.
He notes that mining jobs are no longer low-paying jobs, which means that it makes sense to grow mining through fewer, clearer regulations that do not change frequently.
“If government makes it more expensive to mine, there’ll be less mining. If there’s less mining, there’ll be fewer jobs. If government makes it easier to mine, it’ll be cheaper to mine, and if it’s cheaper to mine, there’ll be more mining and more jobs,” Lorimer, a second-generation politician, emphasises.