Mining declaration ‘very important step in right direction' – Leon

Mineral Resources Minister Susan Shabangu’s mining declaration is seen by regulatory lawyer Peter Leon as a “very important step in the right direction”. Camera work and editing: Darlene Creamer.

30th June 2010

By: Martin Creamer

Creamer Media Editor


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JOHANNESBURG ( – The joint mining declaration over which Mineral Resources Minister Susan Shabangu presided on Wednesday was "a very important step in the right direction", regulatory lawyer Peter Leon told Mining Weekly Online in a video interview.

Leon, who has an intimate knowledge of what it takes for a country to be competitive in mining and who coheads the law firm Webber Wentzel's mining practice group, said that the important aspect of the historic 13-point declaration was that it was a government, labour and business joint venture.

"The big change is that, in the past, the Department of Mineral Resources has simply told mining companies what to do through legislation and regulations. This is the first time, since the Mining Charter was agreed back in those difficult days of 2002, that the key players in the industry, including labour, have got together and agreed a way forward," Leon told Mining Weekly Online.

Leon commented minutes after he personally witnessed the Minister, the National Union of Mineworkers (NUM) president Senzeni Zokwana, the Chamber of Mines (CoM) president Sipho Nkosi, Solidarity president Steve Scott, United Association of South Africa (UASA) COO Leon Grobler and South African Mining Development Association chairperson Nchakha Moloi agree to grow and transform the industry that mines a natural endowment valued at R18-trillion by Citibank.

"We do differ, but ultimately there is progress, and a way forward," Shabangu said.

The declaration commits the stakeholders to:
• promote investment;
• establish a long-term infrastructure planning mechanism;
• innovate;
• accelerate exploration;
• add value through beneficiation;
• promote the country's ranking as an investment destination;
• develop skills;
• advance employment equity;
• boost near-mine communities;
• convert hostels into family units by 2014;
• develop enterprises through procurement;
• realise 26% equity ownership by 2014; and
• monitor and evaluate the implementation of the joint declaration.

NUM's Zokwana advocated that what could become a "resources curse" be turned into a resources blessing. He backed the Minister's contention that the hostel system should be brought to a speedy end, and said: "We're committed to walk the talk. The world is watching."

CoM's Nkosi said that the endorsement of the declaration was yet another example of the capacity of South Africans to overcome differences and to arrive at positive conclusions.

"This amounts to a fundamental acknowledgement that the future prosperity of South Africa is inseparably linked to the ongoing successful operational imperatives of this country's world-class and dynamic mining industry."

Nkosi joined the Minister in reiterating that US financial institution Citibank had identified South Africa as having the largest in-situ resource value of any country in the world, worth US$2,5-trillion.

"Growth and transformation are interdependent and the successful achievement of these two vital objectives will ensure that South Africa is well-positioned when the next global commodities boom is upon us," Nkosi added.

Scott said that the Solidarity labour union saw the declaration as a starting point for a country with incredible mining industry possibilities and that past wrongs should be corrected.

Moloi said that he would like to see more junior mining development and far more emphasis on exploration investment, and he believed that the multi-stakeholder group had erred in not involving the financial sector, which was at the heart of investment flow.

Grobler said that the declaration process had been a tremendous opportunity for UASA to be part of the emergence of a credible strategy for sustainable growth and meaningful transformation.

"This should allay investors' concerns, and the economic growth of the industry that results from this will reflect positively on South Africa's gross domestic product," Grobler said.

Shabangu's economic adviser Dr Iraj Abedian said that the transformation of the mining industry could not take place without growth, and that South Africa had to capability to regain its global competitiveness through the collaboration of government, labour and business.

"All the stakeholders have to collaborate and deal with the issues, both soft and hard, in order to regain our global competitiveness and be among the top quartile," Abedian added to Mining Weekly Online in a video interview.

Leon said that the declaration confirmed that the Mineral and Petroleum Resources Development Act (MPRDA) would be "significantly amended" during the Parliamentary session next year, in order to give effect to the joint declaration.

"One of the very important things that this document recognises is that the architecture of the MPRDA, and not just its implementation, is defective. There is now an admission by everybody, including the government, of the need to go back to the drawing board and fix the issues in the Act, like Ministerial discretion and lack of compulsory time periods for licensing," Leon said.

While the Mining Charter review would be agreed only in August, the declaration had already set in stone the Charter-related housing and living standards as well as 26% equity in mining companies by black economic empowerment partners.


Edited by Creamer Media Reporter



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