Mining expected to tackle SA's needs

2012-12-23 12:53

Johannesburg - The mining sector is faced with a choice: either actively raise its contribution to the country’s developmental needs, or risk being strong-armed by the government’s resolutions on mineral policy adopted at the ANC’s elective conference in Mangaung.

The ANC last week ruled out nationalisation as a policy option, and even though the sector still faces the prospect of more taxes and export restrictions on yet-to-be declared strategic minerals, the ruling party has said it would return the favour if the industry showed its enthusiasm towards tackling South Africa’s problems.

Apart from taxes and strategic minerals, the policies also speak to beneficiation and social upliftment. The nature and extent of additional taxes, as well as the nature of export restrictions, are yet to be decided.

“Exactly,” was how the chairperson of the ANC’s economic transformation committee, Enoch Godongwana, responded when asked whether the softer stance of the policies were intended to incentivise the industry to be more proactive.

Similarly, he said the adopted policies would also give the government the ability to enforce cooperation if it was deemed insufficient.

The view was echoed by Minister of Public Enterprises Malusi Gigaba during an earlier interview which preceded the Mangaung conference.

Speaking about the prospects of levying export taxes on coal as a way to contain power generation costs, Gigaba told Miningmx he was seeking for a compromise from coal miners.

“It would be much better to arrive at a national pact than impose a decision from above,” Gigaba said. “A national pact from a reputational point of view is better and more workable.”

Frans Baleni, general secretary of the National Union of Mineworkers, said the ANC had demonstrated it was sensitive to the concerns and objectives of investors.

“It sometimes is disappointing that business leaders don’t similarly show sensitivity to what South Africa needs as a country,” he said.

He said the government could have taken the route of Zimbabwe, where at least 51% of all mining operations have to be controlled by locals, legislation which has affected South African-based Anglo American Platinum, Impala Platinum and Aquarius Platinum.

“(In Zimbabwe) They are not crying; they’re complying,” Baleni said.

Baleni said mining companies could enhance their own public image by showing their commitment to corporate and social investment, strategic beneficiation and full compliance with the mining charter.

Baleni also said the labour union was not oblivious to the needs of the mining industry to flourish, saying it would support the industry’s call for a more efficient regulatory regime – easing the required process involved in mineral right applications.

The Chamber of Mines, meanwhile, has said the ANC’s decision to rule out nationalisation would “create some certainty among investors and once again encourage investment in the country’s mining sector”.

However, it said would seek urgent detailed discussions with the ANC on strategic minerals and taxes.

“Any discussion on resource rents should take cognisance of the cyclical nature of the industry and the fact that it is very capital intensive, only delivering returns over an extended time horizon,” read a statement.

Vusi Mabena, senior executive for transformation and stakeholder relations at the Chamber of Mines, said he accepted that large sectors of society thought “mining isn’t doing enough”, even though it provides employment, directly and through related industries, to 25% of South Africa’s working population.

“It is our responsibility to put what we are doing on the national agenda,” he said.

The investment community has long viewed the elective conference as a critical event for gaining clarity about South Africa’s mining policy.

Steve Meintjes, head of mining research at Imara SP Reid, said: “It is quite symbolically important that the ANC has decided to drop the (nationalisation) word. Why it had to take three years, I’m not sure.”

He said future discussion over taxes would also be critical, and while the demand for an increase was not without merit, it was vital to levy taxes in a progressive manner, whereby the rate increases proportional to the profitability of operations.

Peter Leon, head of law firm Webber Wentzel’s Africa mining and energy projects practice, said policy certainty would only be attained once the ANC had made its intentions clear on taxes and export controls.

  • michael.i.wright - 2012-12-23 13:28

    So, they will buy him another compound or else?

      mandla.thwala.10 - 2012-12-23 14:24

      What is your contribution leave Zuma out of this for once pls

  • moriri.mosweu - 2012-12-23 13:35

    Long over due and please keep BEE away from this, I would like to see everyone getting a fair and due share.

  • sean.bagley.50 - 2012-12-23 13:51

    Diversify the South African economy more and that will create more jobs to beat poverty.Manufacturing,agriculture,the arts & movie industry,etc all have gone on a downward spiral over the years because this current Governments overly dependence on the mining industry to provide jobs across the country.

  • Mbuso Siera - 2012-12-23 14:06

    The ANC must decide because these minerals belongs to every South African....Natural Resources cannot benefit few individuals.....its either they propose what Zimbabwe did or what the Australians did on many tons of gold were dug out of Gauteng mines but still those black surrounding communities are very poor...but few individuals with their children became multibillionaires....the oil that is under the Russian soil belongs to the Russian government.....African is very poor today yet very rich in Natural Resources investors see Africa as a ground to make themselves rich but black Africans poor.....the ANC must make decisions in the mining sector that will benefit all South Africans not few individuals.....

      colin.dovey - 2012-12-23 17:48

      Whilst you are correct that South Africa belongs to all South Africans, together with the minerals contained therein, the scenario in the real world is much more sophisticated than the simplistic view expressed. Any business venture, worldwide.....Russia included, involves investment, and the profitable extraction of minerals is high risk for the potential investor. Some simple examples of failed "investments" in our local scene are: Telkom, SA Airways, Eskom.....and you (If you pay taxes) are paying the price today in the form of taxes. Where we are falling down when it comes to the mining sector, is that we should have the minerals beneficiated locally, instead of exporting them to be worked on in Europe, China etc. THAT would provide jobs for our people. Also, locals in the mining environment should be called upon to provide some of the services, such as Safety equipment, Medical facilities, Lime, Power (yes, locally).....and, oh yes - Training, Education etc.

      jesibelle.krueger - 2012-12-23 22:31

      @Mbuso Siera, If the minerals belong to you then why do you not take a spade.., no wait a spade is a European invention.., take your 'knobkierie' and go and start digging around that hill at Marikana (you know the one where the rabbit was running around - there where they make muti that makes bullets bounce off you) for YOUR minerals... That is what your kind cannot fathom - the minerals belong to those who have the ability to create the technology to extract the minerals. It is like saying all the minerals in the Asteroid-belt belongs to me. If beings from another planetary system come and mine the minerals, I cannot say to them give met the minerals that you mined, because I was here before you - it is the ramblings of an idiot, the reasoning of a child..!! The reason that Africa is poor, is Africa's own fault - while Africans were eating each other, Europeans educated themselves, they showed the discipline to develop and eventually after millennia they understood physics-, engineering, chemistry and alike, then they developed the means to mine, extract and use such minerals. Europeans did sit around and mope all day and demanded things for doing NOTHING, while they were breeding like rats, yet they had nothing. Sack your ENTITLEMENT and get with it - else you will be poor forever. How many of the modern mining- and extraction methods were invented/developed by black Africans..? NONE, NADA, ZILCH, NOTHING, ZIP. And if anybody tells you anything else they are LYING..!

  • carol.paterson.923 - 2012-12-23 19:02

    Don't believe the ANC when they make any promises. They made promises to the previously dissadvantaged 18 years ago and haven't met those promises. You can't trust a government who consist of liars and thieves.

  • kevin.moxham.3 - 2012-12-23 19:07

    Time to get all the facts out in the open - forget all the politics - this way we shall see how the mining industry already contributes significantly to the country - employment, purchasing, taxes and skills. It is said tht for every mine worker there is 10 others who benfits eg - secondary industries ect. The real issue that needs to be openly corrected is the corruption, incompetence and waste from the cadre deployments, stop this and the deivery to all our people will accelerate - has the ANC the will to do this.....???

  • Getrude - 2012-12-24 14:40

    I'm positive the policy will yield positive results. At least we are talking of 18 years of democracy unlike more than 100 years of oppression marked with hatred and brutality in the apartheid era benefiting only the minority. ANC has made an impact in that 18 year period. Bravo! ANC. You will have turned this country around positively more than your counterparts in the next 100 more years. You idiots! Buckle up for you've got a long way to go. Good luck-).

  • Getrude - 2012-12-24 15:24

    @jesibele.krueger keep on digging, mine on behalf of the blacks, inherit debts but PLEASE share the proceeds with us. We want that money. NOT NEGOTIABLE. Did you hear what my beloved ANC said? Don't make me loose my temper.

  • thatoadam.ndlovu - 2012-12-25 15:31

    The agresive ruling party wants 2 continue building malls @ inkandla rural areas with our taxes while neighbours r sufuring

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