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South Africa’s image improving as mining investment destination, local university mining school gaining progressive global recognition

29th March 2019

By: Martin Creamer

Creamer Media Editor

     

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South Africa’s image as a mining investment destination is improving, one of the country’s mining engineering schools is being globally acknowledged as a progressive place of learning, mineworkers have become the effective controlling shareholders at a local coal mine, Mining Charter III is bearing fruit for workers and communities in the form of free equity, court action by strikers is leading to out-of-court discussion and new resolve is emerging to end illegal mining.

This month’s Fraser Institute’s mining survey has lifted South Africa from the nether rungs of investment appeal towards the middle of the list; QS World University Rankings has elevated the University of the Witwatersrand School of Mining Engineering to 13th place from 22nd place only two years ago; the Arnot coal mine, which was closed so ignominiously under the previous Eskom regime, has come out of care and maintenance with 55% effective worker control; judges are rejecting old incidents to bolster new striker court action; and Parliamentary questions about the loss to the economy from illegal mining are being raised by a very unexpected but welcome source, the Economic Freedom Fighters.

Fraser’s yearly survey, which has elevated South Africa from close to the bottom of the pile towards the middle, is affording the country greater investment attractiveness, which will give mining students a better chance of being able to remain in the study of their choice once they graduate.

When it was announced that Wescoal was acquiring half of Arnot in a 50:50 joint venture (JV), Mining Weekly failed to realise immediately that this transaction was a wonderfully historic one. This is because the way Arnot’s former owning company, Exarro Resources, facilitated the transaction enabled former employees of Exxaro Coal Mpumalanga to gain an effective 55% control of the JV in Mpumalanga. Under CEO Mxolisi Mgojo, Exxaro was willing to transfer the asset to the mineworkers at no cost, with Wescoal coming in to provide proven operator control.

Interestingly, the mining rights are in the hands of the Arnot workers and, given the stipulations in Mining Charter III, those workers will gain another free-carried 5% stake in the operation, which means that the coal mine will be 55% worker-owned – a South African first!

In another coal transaction, more Mining Charter III fruit will be dished out. This will happen officially on April 4 when the Menar group, which has acquired Kangra Coal, hands over a 5% free-carried shareholding to Kangra’s 1 300 workers and another free-carried 5% to near-mine communities.

On the industrial action front, the Labour Court this month unexpectedly dismissed the application made by the Association of Mineworkers and Construction Union (AMCU) to interdict the Section 189A restructuring process at Sibanye- Stillwater’s gold operations. Encouragingly, the court dismissal was followed by Sibanye-Stillwater CEO Neal Froneman urging AMCU and other stakeholders to participate in a joint effort to arrive at viable alternative measures to mitigate job loss – another welcome moment.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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