Mike Teke
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – South Africa’s Chamber of Mines (CoM) asserts that meaningful economic empowerment participation by historically disadvantaged South Africans (HDSAs) has been achieved over the past 12 years in the local mining sector and that its member companies – which account for about 90% of all local mining companies – have, on average, higher-than-required HDSA ownership figures.
CoM CE Roger Baxter noted during a media briefing in Johannesburg on Friday that, over the past 12 years, broad-based HDSA ownership of mines equated to 38% on average and that the sector was responsible for the transfer of about R47-billion to HDSA beneficiaries.
He highlighted that all sectors of the local mining industry had similarly met or exceeded the HDSA ownership threshold of 26% mandated by the Mining Charter.
The chamber gave a breakdown of the respective mining sectors’ HDSA empowerment percentages, with the platinum group metals sector at 38%, gold at 27.3%, coal at 47.2%, diamonds at 26%, iron-ore at 35.7%, manganese at 42.2% and chrome at 35.1%.
Baxter stated that the composition of identifiable HDSA beneficiaries in the industry that had benefited through ownership schemes, both directly and indirectly, was 63% black economic-empowerment (BEE) entrepreneurs (46 BEE companies), 22% communities (6.9-million HDSAs) and 15% employees (210 000 HDSAs).
The briefing was held in response to Mineral Resources Minister Advocate Ngoako Ramatlhodi’s pronouncements on Thursday that, on a weighted basis, only 20% of the mining industry’s HDSA empowerment schemes could be deemed as having “meaningful economic participation”.
INDUSTRY CONCERNS
CoM VP Graham Briggs on Friday said the local mining industry was under considerable pressure, particularly the coal, gold and platinum sectors, adding that market predictions for commodity prices remained bearish.
He added that if the Association of Mineworkers and Construction Union’s wage demands were met, it would likely result in the demise of many marginal and lossmaking mines in the country.
AngloGold Ashanti CEO Srinivasan Venkatakrishnan (Venkat), speaking from the floor, reiterated earlier comments that a strike in the gold sector would be damaging to all industry stakeholders.
“The mining industry is still reeling from the impact of last year’s five-month-long platinum sector strike, as South Africa’s reputation as an investment destination has been severely tarnished,” he stated.
Venkat said he believed that mining companies had to take the dialogue to a higher level, by discussing with all stakeholders, including government and unions, how to ensure the sustainability of the industry.
“This discussion cannot just centre around the matter of basic pay, it must include other issues such as productivity levels, job creation, job losses and what the mining industry regulator brings to the party in terms of infrastructure spend, tariffs and the like. This is the only way we can increase the size of the pie, otherwise, we are all going to be fighting over a shrinking pie,” he asserted.
Venkat further stressed that it was not only foreign investors that were being put off by the current uncertainties and challenges plaguing the South African mining industry, but local investors as well.
“Foreign investors will first engage with local investors to ascertain the value of investing and, if there is a lack of confidence locally, companies will have very little chance of attracting foreign investment,” he warned.
Nonetheless, CoM president Mike Teke said it was important to highlight that the chamber would continue to engage government on all issues that were 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,” he concluded.