Fourteen years ago, I attended a sod turning ceremony at a manganese project in South Africa’s Northern Cape. The project was made possible by a R1.7-billion investment by foreigners.
These equity investors included a company with an offtake arrangement to Asia and they were prepared to pay for the development of a new mine in the Kalahari. It took an age to get to the manganese and even longer to bring it out consistently in volume.
But, because it was in good hands, and good logistics were laid on, exportation began eight years later. It took 14 years for the first dividend to be declared, thanks to an upward blip in the manganese price. But the beauty of the mine is that it has a sizeable community stake and is controlled by black South Africans at a percentage of 50.1%.
The community trust in the area has been able to do a lot of youth development and even launch a community radio station with the money received, not to talk of health services and water provision for an unserved area. It is an example of the way that South Africa’s great mineral endowment can be used for the good of the people of South Africa in the broadest possible sense.
Government has received taxes and royalties, jobs have been created, employees have paid taxes on their earnings, local manufacturers have had the opportunity to supply the mine with equipment and services, provident funds and pension funds have been replenished and dividends have been spread far and wide to the extent of billions of rands.
The point I want to make is that there is no chance of investments of the kind witnessed being repeated. Equity capital like the R1.7-billion that came into South Africa has no chance of coming in under current conditions. Although the manganese of the Kalahari is high grade and technically and geologically wonderful, it will remain sterilised in the ground, all because of the extremely negative approach of Mineral Resources Minister Mosebenzi Zwane and the Department of Mineral Resources (DMR), which is crushing the goose that lays the golden eggs.
They are depriving today’s South Africans of important economic opportunity and they are depriving future generations of economic wellbeing. The hard-earned employee contributions invested in mining stocks are under threat and, if a major decline is suffered, contributors should bring a lawsuit against the Ministry and the DMR for compensation.
They should not be allowed to get away with wanton destruction of a national patrimony that puts food on millions of tables. The Ministry and the DMR should be challenged at every turn and made to pay dearly for what amounts to sabotage of the South African economy.