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Prospects of quick mining fix fade as court case mindset refuses to go away

4th May 2018

By: Martin Creamer

Creamer Media Editor

     

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South Africa is committed to turning its mining industry into a ‘sunrise’ industry, but regrettably dark shadows keep eclipsing the brighter light, preventing it from blazing through.

One imagined that the court case era passed when the Chamber of Mines won its case against mining companies having to provide empowerment fillip on an ongoing basis in the event of their black economic empowerment partners disposing of their shares.

Initially, the indication was that Mineral Resources Minister Gwede Mantashe would not appeal that decision, especially given his reported remark that mining companies should not be penalised for empowerment partners making a buck on the sale of their shares.

But now that has done a complete about-turn with the Minister’s application for leave to appeal the Pretoria High Court’s decision on the ‘once empowered, always empowered’ principle under the Mining Charter.

Herbert Smith Freehills co-chairperson and partner Peter Leon is correct to describe the application as both “regrettable” and also “particularly disappointing”, against the backdrop of the Minister originally indicating that the judgment would not be appealed.

If Leon is correct about the appeal only likely to be heard by the Supreme Court of Appeal next year, it means more delays at a time when the South African economy and the mining industry can least afford delays.

Platinum mining is in crisis and the outlook for gold mining is that it could do with investor confidence and capital to mitigate against its growth constraints.

Mining Charter III was supposed to be dead and buried by the end of May and replaced with something that gave South African mining a boost.

That is now unlikely in Leon’s view, who believes the charter conclusion is no longer imminent and another revival opportunity has been lost.

Admittedly, the outlook did blur when the Minister indicated that not all of Mining Charter III would be jettisoned.

Are his utterances being made with an eye on the upcoming general election? One senses a possible playing of politics in all this, which could come back to bite us.

As is being pointed out by author, African National Congress National Executive Committee member and executive director of the Mapungubwe Institute for Strategic Reflection Joel Netshitenzhe, South Africa’s mineral endowments present a unique opportunity for a new industrialisation drive and advancement in the economy as a whole, across the value chain, of mining equipment and services, extraction, infrastructure development, beneficiation and skills development, as well as research and development.

Required, Netshitenzhe says, is a delibe- rate strategy to develop a mature mining cluster that touches virtually every aspect of the South African economy and political economy, including adaptation to new reali- ties in terms of the application of technology and labour sourcing.

Mining, he insists, can become a sunrise industry. “The responsibility to take advantage of this opportunity lies as much with the State as it does with mining companies, workers, mining communities and, indeed, society at large,” he adds, and Mining Weekly wholeheartedly agrees.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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