Minerals Ministry, DMR playing with fire, destroying industry, opening way for rampant illegal mining

21st July 2017

By: Martin Creamer

Creamer Media Editor


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In its current poor state, mining and the companies that depend on it are likely to disappoint the Treasury when it comes to next paying tax.

What the Minerals Ministry and its errant Department of Mineral Resources (DMR) have failed to recognise in gazetting Mining Charter Three is that a struggling mining industry also means a struggling South Africa – politically, economically and socially.

Any government in its right mind would have been doing as much as possible to enable an industry like mining, which has catalysed more economic spin-off in the last century than any other sector, not shatter its spirit.

Any Cabinet with insight would know that allowing the Minerals Ministry and the DMR to gazette a punitive Mining Charter Three would be allowing uninitiated leadership to play with fire and open the way for eventual rampant illegal mining.

Thousands of illegal miners are already at work in the country, and putting more mines on care and maintenance will see that number multiply to tens of thousands.

To instruct the Ministry and the DMR post-gazetting to now engage in a public consultation process with civil society, labour and industry on Mining Charter Three, as the Treasury has done with its 14-point plan, is entirely the wrong way round.

Even those with the dimmest sense of regulatory procedure would know that consultation must precede gazetting and not come after it.

Also unconvincing is the setting of deadlines for the finalisation of the Mineral and Petroleum Resources Development Act Amendment Bill.

There is no piece of legislation that has had more end dates than this amendment Bill; what needs to be acknowledged is the content of this Bill, which is all important, not the end date.

Where the emphasis needs to be placed by Treasury is on ensuring that it will be very positive for the growth of the South African economy.

As the Chamber of Mines has noted, 70 000 mining jobs have already been lost in the past five years and investment in mining over the past two years has been negligible.

Along the way, the lack of trust that investors have for government has been worsening and the National Treasury’s 14-point action plan is doing little to improve matters.

Investors view Mining Charter Three as a measure that will devastate the industry. The rogue drafters of this document have shown disdain for the Constitution, the Companies Act and the World Trade Organisation.

The charter’s new rules will starve the industry of capital, shorten mine life, slash profits, raise costs and pull the bottom from under the replenishment of reserves.

Taking 1% of revenue from mining companies and putting it in an undefined DMR trust deals the biggest blow of all to companies and is a clear indication that those who drafted the charter know very little about mining.

Fortunately, the Chamber of Mines has won the first round in its battle against the revised charter.

The chamber has done well to extract a written undertaking from Mineral Resources Minister Mosebenzi Zwane that neither he nor the DMR will apply any of the provisions of the charter “in any way”, pending judgment in the chamber’s urgent interdict application.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor


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