Mining a 'sunrise industry' with many opportunities - Zwane

Cape Town – South Africa’s mining sector is a sunrise industry presenting many opportunities, said Mineral Resources Minister Mosebenzi Zwane on Wednesday.

He was presenting the Department of Mineral Resources’ (DMR's)budget vote to members of the National Council of Provinces, and said his department will continue to use policies and legislation to meet the country’s radical economic transformation objectives.

The South African economy, Zwane said, is “lopsided” with 90% of South Africans excluded. “The need for radical economic transformation is more imperative than ever before to address the monopolised nature of the economy.”

The new Mining Charter gazetted on June 15 is a catalyst for a more inclusive economy, Zwane said. “I therefore encourage youngsters to exploit the opportunities presented by this instrument of change.”

GAZETTE: Read the full Mining Charter 

Zwane said he and the DMR will host roadshows in the country’s nine provinces to make South Africans aware of the new charter and the opportunities in the mining sector.

He believed that the changes proposed in the new charter are to the benefit of workers, such as decent standards for housing, the provision of economically integrated human settlements and a sustainable health system. "We thought we were very reasonable for the workers," Zwane said. 

He also questioned criticism levelled at the decision to increase black ownership of mines from 26% to 30%. "The mining sector is not the only industry with a 30% black ownership target. Tourism also has 30% and no one said anything." 

Zwane assured MPs that government would keep a close eye on black entrepreneurs who are to benefit from the new provisions in the charter. "We will constitute a database of all South Africans and make it available for as long as they’re black and South Africans. The criteria we use will be set out for all of us to see." 

The announcement of the new Mining Charter by Zwane last week sent the rand and mining shares diving.

The currency, which was touching on R12/$, before its release, has weakened significantly to below R13/$ while more than R50bn of mining companies’ market value was lost.

READ: Mining Charter sees bloodbath resume on JSE

Analysts, legal experts and even ratings agencies Fitch and Moody’s have warned that the new charter would have a negative impact on investment and the financial sustainability of mining companies.

Even the ANC expressed concern over the contents of the charter, saying it is concerned about the effect it could have on employment in an already fragile industry which has lost thousands of jobs in the past five years.

The ANC’s economic transformation committee met with the Chamber of Mines on Tuesday, following allegations that it had not been properly consulted before the gazetting of the new regulations last week.

READ: Rand jumps as Moody's warns SA about Mining Charter 

The Chamber of Mines has in turn said it would take the matter to court over lack of consultation, and to get clarity on the issue of past empowerment transactions.

The new Mining Charter stipulates that mining firms need to restructure their ownership to ensure they have 30% black ownership within 12 months. It will also require a 50% plus one black shareholding in all new prospecting licences.