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Johannesburg - The mining industry is being ambushed because it is unable to achieve the targets of the new mining charter agreed upon last year.
The targets that have to be achieved by 2014 are impossible to attain.
Failure to do so will be the excuse to nationalise mining assets, said Hulme Scholes, one of the country's most experienced mineral rights practitioners, at a presentation in Johannesburg on Friday.
The new mining charter's targets require 26% of all vote-carrying shareholding, all economic interests and net ungeared effects to be in the hands of the previously disadvantaged by 2014.
It is unthinkable that these targets will be achieved – and that will be the excuse for nationalisation, said Scholes.
According to Scholes, the debate on nationalisation of the mining industry is taking place unilaterally and is dominated by legal experts. Mining companies themselves need to become involved.
The current debate on nationalisation and state intervention in the mining industry is being conducted entirely unilaterally, without economically feasible argumentation, Scholes continued.
He has represented the industry several times in official contacts with government and was closely involved in the development of the current minerals legislation leading to the Minerals and Petroleum Resources Development Act.
The submissions on minerals legislation were totally dominated by legal experts. All comments and presentations regarding legislation were made by legal representatives, one after another.
Scholes believes it extremely important for mining companies themselves to talk to government about nationalisation.
So far there has been too much apathy on the part of the mining industry. Government does not want to be lectured to by legal experts armed with scholarly documents – it wants to speak to the mines themselves, he said.
Government regards the Chamber of Mines as a group of white men in suits from a white-dominated industry coming to speak to it about economic policy and their concerns.
The Chamber is not guilty of that, but it has become a discredited and ineffective organisation, said Scholes.
The Chamber produced six sets of commentary on the code of conduct for the mining industry .
From a legal point of view the code is a messy document, but all comments were ignored and the original draft was accepted by government and published in the Government Gazette, he said.
Scholes reckons nationalisation of the mining industry is inevitable, but this will come about as “radical government intervention in industry by a state mining company”.
The only legislation still necessary to make this possible is the Expropriation Bill, which would initiate expropriation in the public interest. It was presented to parliament in April 2008, but was subsequently withdrawn.
Scholes believes the Chinese government has declared itself ready to provide money to a state mining company to pay for the expropriation of mines.
The Chinese have a 1 000-year view on resources, he said.
The Chinese have recently also been involved in transactions in which Chinese companies bought South African mining assets.
A Chinese buyer for whom he acted, he said, had already spoken to our Minister and Director-General of Mineral Resources. The Chinese delegation arrived fully cognisant of our regulatory environment, whereas a traditional, Western investor would have started by approaching a legal representative or an audit firm like KPMG.
The Chinese choose to start at government level when they arrive in a country. That's the way they think and act, he said.
The targets that have to be achieved by 2014 are impossible to attain.
Failure to do so will be the excuse to nationalise mining assets, said Hulme Scholes, one of the country's most experienced mineral rights practitioners, at a presentation in Johannesburg on Friday.
The new mining charter's targets require 26% of all vote-carrying shareholding, all economic interests and net ungeared effects to be in the hands of the previously disadvantaged by 2014.
It is unthinkable that these targets will be achieved – and that will be the excuse for nationalisation, said Scholes.
According to Scholes, the debate on nationalisation of the mining industry is taking place unilaterally and is dominated by legal experts. Mining companies themselves need to become involved.
The current debate on nationalisation and state intervention in the mining industry is being conducted entirely unilaterally, without economically feasible argumentation, Scholes continued.
He has represented the industry several times in official contacts with government and was closely involved in the development of the current minerals legislation leading to the Minerals and Petroleum Resources Development Act.
The submissions on minerals legislation were totally dominated by legal experts. All comments and presentations regarding legislation were made by legal representatives, one after another.
Scholes believes it extremely important for mining companies themselves to talk to government about nationalisation.
So far there has been too much apathy on the part of the mining industry. Government does not want to be lectured to by legal experts armed with scholarly documents – it wants to speak to the mines themselves, he said.
Government regards the Chamber of Mines as a group of white men in suits from a white-dominated industry coming to speak to it about economic policy and their concerns.
The Chamber is not guilty of that, but it has become a discredited and ineffective organisation, said Scholes.
The Chamber produced six sets of commentary on the code of conduct for the mining industry .
From a legal point of view the code is a messy document, but all comments were ignored and the original draft was accepted by government and published in the Government Gazette, he said.
Scholes reckons nationalisation of the mining industry is inevitable, but this will come about as “radical government intervention in industry by a state mining company”.
The only legislation still necessary to make this possible is the Expropriation Bill, which would initiate expropriation in the public interest. It was presented to parliament in April 2008, but was subsequently withdrawn.
Scholes believes the Chinese government has declared itself ready to provide money to a state mining company to pay for the expropriation of mines.
The Chinese have a 1 000-year view on resources, he said.
The Chinese have recently also been involved in transactions in which Chinese companies bought South African mining assets.
A Chinese buyer for whom he acted, he said, had already spoken to our Minister and Director-General of Mineral Resources. The Chinese delegation arrived fully cognisant of our regulatory environment, whereas a traditional, Western investor would have started by approaching a legal representative or an audit firm like KPMG.
The Chinese choose to start at government level when they arrive in a country. That's the way they think and act, he said.
