Mining Weekly

The Department of Mineral Resources (DMR) is making ill-considered demands that have little hope of being met.

Instead of following the continent’s African Mining Vision and Zambezi Protocol, the DMR is going out on a dictatorial limb.

In April, when it gazetted a revised version of the Mining Charter outside the usual consultative process that characterised the first two charter iterations, it promised to engage with labour and business, but failed to keep that promise.

Instead, it cold-shouldered the Mining Industry Growth, Development and Employment Task Team, known as Migdett, which has been the three-part labour, business and government structure used to move South African mining forward.

The DMR now says it will gazette what is an even more threatening charter version before year-end.

The hurdles of its latest charter iteration will be unsurmountable by an industry that last year lost R37-billion.

Despite mining being at pains to point out the ongoing challenges, the DMR is hell-bent on continuing to hinder rather than help, which is in sharp contrast to what has taken place in the other mining jurisdictions of the world, not the least of them Botswana.

The positive side of the DMR’s errant behaviour is that it is having the effect of pushing business and labour closer together, which is potentially a major plus for the people of South Africa, provided the two take joint steps to force the DMR into line and foster economic growth in a country that is battling worrying levels of unemployment.

In the meantime, the DMR is making things much worse. Out of the blue, it has popped up with the Mining Transformation and Development Agency (MTDA), the new acronym for retrogressively squeezing more cash out of a struggling industry.

It wants multinationals supplying goods and services to pay 1% of turnover generated from local mining companies to the MTDA, which multinationals will simply pass on to local mining companies in the form of higher prices, rendering the South African mining industry even less competitive than it already is.

The cumulative effect of all the DMR’s proposals, combined with existing corporate taxes and royalties, skills development levies and more, will materially affect the viability of an industry already in crisis, says Chamber of Mines CEO Roger Baxter, who with Chamber of Mines senior executive public affairs and transformation Tebello Chabana this week warned that the mining sector's future viability would be placed in serious jeopardy if the revised charter is gazetted.

All the DMR's new blows are being delivered against the background of a Labour Court finding that its inspectorate has been acting “outside of the bounds of rationality” in enforcing mine safety legislation.

All this is placing a huge burden on the people of South Africa, who are being disadvantaged to a point where other countries in Africa are beginning to beckon as far better mining investment destinations than well-endowed South Africa, which is being hamstrung by the absence of good governance.