JOHANNESBURG (miningweekly.com) – The South African government is clear on the role it has to play in normalising the country’s mining industry, Finance Minister Pravin Gordhan said on Wednesday.
He said that, in the global context of financial markets losing confidence in the mining industry, as pointed out in a recently released PricewaterhouseCooopers report 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 government team led by Deputy President Kgalema Motlanthe, which last week brought together employers and unions to resolve problems facing the beleaguered mining sector.
Speaking at a Bloomberg and Business Day business breakfast, in Johannesburg, the Finance Minister said that government had a responsibility to help normalise the labour relations environment and return the industry to organised collective bargaining.
However, government also had a responsibility to inform South Africans that returning the industry to its former position would be more difficult than it was 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, providing cheap labour to the mining industry, Gordhan said.
“Today, we have to confront the migrant labour system, we want South Africans to understand the conditions that mineworkers come from and the state of their ‘sending areas’. We need people to understand that we all need to invest in the sending areas to ensure that development takes place there,” 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 within 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 also soon get a step ahead of 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 that the South African mining industry faced, but pointed out the country’s success in dealing with challenges in the past.
“Between 2004 and 2007, when the royalty regime was being introduced in South Africa there was a lot of scepticism, but through careful consultation a well-balanced royalty regime was established. Then around 2007/8 South Africa experienced a power 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 around 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 that the current labour relation issues were centred on whether the rule of law and stability would prevail and whether mines could operate without the threat of violence, rather than on wage negotiations as such.
Venkat did not believe that the industry would see a repeat of the events last year when 45 protesting miners lost their lives at the Marikana mine, as mining companies, union leaders and government were now better prepared to deal with labour issues.
“More importantly we are seeing the entire group of stakeholders coming together to ensure that a settlement is reached, not only in terms of wage negotiations, but also in terms of community relations and in terms of how law and order are dealt with 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.