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Discredited DMR turns dictator as it makes ill-considered, unattainable demands on struggling industry

25th November 2016

By: Martin Creamer

Creamer Media Editor

  

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The Department of Mineral Resources (DMR) has turned into a little dictator that is making ill-considered demands that do not have a snowball’s hope of being met.

Instead of following the continent’s African Mining Vision and Zambezi Protocol, the DMR is going to find itself up the creek without a paddle.

It went out on a unilateral 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.

Insincerely, as it now turns out, it insisted that the gazetting did not cast the revised charter in stone and that it was prepared to engage with labour and business.

The Mining Industry Growth, Development and Employment Task Team (Migdett) is the structure for doing this, but it cold-shouldered Migdett and its business and labour components.

Instead it went into dictatorial mode last week and submitted an even worse revised version of the draft to Parliament.

The hurdles it lays out in it would be unsurmountable even by a fit mining industry, let alone one that last year lost R37-billion.
Despite the industry being at pains to point out to the DMR that it is in dire straits, it continued to set out to hinder rather than help, as is taking place in the other mining jurisdictions of the world.

An unintended consequence of its actions, which could be at its peril, is that it is forcing labour and business closer together, which is potentially a major plus for the people of South Africa, provided the two take joint steps to force government to foster economic growth.

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 dying industry.

It also 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.

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

The inspectorate is not saving lives, but potentially endangering them by closing mines for prolonged periods, which is no good at all for safety.

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.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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