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Mining Charter, BEE a failure - report

Johannesburg - The mining charter does not address weaknesses in the industry or cater to communities and black economic empowerment has failed to transform ownership patterns.

This was the view of speakers taking part in a discussion based on a report by Duma Gqubule, director of Centre for Economic Development and Transformation, which centered around how far the mining industry has come in terms of ownership.

Gqubule presented the report in Braamfontein on Tuesday to the Society, Work and Development Institute (SWOP) after undertaking research on transformation in the mining sector.

Carol Paton, deputy editor of Business Day, and analyst, and  Mbuyiseni Ndlozi, a Member of Parliament, and spokesperson of the Economic Freedom Fighters (EFF) were part of a panel to discuss the findings of Gqubule’s report.

The panelists concurred with the conclusion in Gqubule’s report that much of the wealth was still in the hands of a few when it should be benefiting a larger majority.

'Mining Charter a failure'

Ndlozi said that the mining charter was a document that was meant to ensure, along with the Mineral and Petroleum Resources Development Act of 2002 (MPRDA), the transfer of mineral wealth from a few white individuals to the broader economy through empowerment, but he said this was not implemented. 

He said that companies had failed to meet targets related to ownership, social and labour constructs, as well as environmental issues.

“At the time, the mining charter was heralded as a transformative document that would induce transformative processes, but I think if you look more closely at it, the intention was not transformation,” said Paton.

She added that the mining charter said very little about communities, workers, or industry, and had an inadequate implementation mechanism that would not aid transformation, but rather produce a new BEE elite who merely reproduce the systems put in place by colonial capitalism. 

“It’s allowed the industry to remain stuck and trapped in its present patterns both of ownership and of the way workers organise, and the way profits are shared,” said Paton.

Ndlozi pointed out that there has been a reversal of the gain made relating to of black ownership in the mining sector.

“[E]ffective black ownership fell by 50.5% to R28 billion at the end of December 2016 from R57 billion in December 2014,” said Ndlozi, quoting Gqubule’s report.

Communities out in the cold

“The way the system is organised at the moment, is not contributing to the national benefit, and it’s not contributing to the benefit of the communities who are actually doing the extraction,” said Paton.

Gqubule’s solution was a state-led transformation through a state-owned mining company and stricter regulations. He also suggested that AngloGold reinvest in South Africa.

“I believe it has to be a mixture between public, on behalf of all South Africans, ownership by communities, workers and the traditional BEE investors. We can achieve about 51% ownership by those stakeholders in the mining industry,” said Gqubule.

Ndlozi said that black ownership has not succeeded after 23 years of democracy, saying that this demonstrated not only a fundamental failure of the mining charter, but also that BEE doesn’t work.

Although he agreed with Gqubule, he said he should not push his recommendation further.

“We are arguing for the nationalisation of the mining industry in South Africa, in favour of not only state ownership, but state control of the direction of that industry,” said Ndlozi.

Paton advocated for black ownership, but asked the audience to question how much weight would be given to it considering how this would affect private investment, investors and private resources.

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