SA miners in a significant pickle

Roger Baxter

The current CEO of the Chamber of Mines Roger Baxter is one of the most intelligent and talented economists I know.

He also seems to be a tough bloke.

Annoyingly, I was unable to attend last week’s Mining Indaba in Jo’burg, but I did read about it, and about the very bad blood between the miners and their Minister Mosebenzi Zwane.

It seems that the Chamber decided to boycott the Indaba gala dinner, as a snub to the minister.

How bad can relations have become if you turn your back on steak and chips and a glass of red wine?   Very bad, indeed, it seems.  Roger must be a very unhappy chappie.

The row seems to be over a new Mining Charter which the minister is determined to inflict on the industry, and in particular about a move to increase the compulsory minimum BEE stake in a mining operation from 26% to 30%.

I attended the minister’s announcement of the new Charter, and gained the impression that if a previous empowerment deal has gone wrong, or the BEE partners have cashed in, the mining company will still be forced to return to 30% BEE, however costly this may be.

The issue has gone to court, with no sign of either side being prepared to back down.

Yet one wonders what could be achieved were the minister a lot less aggressive, and the miners less inclined to sulk?

There is every reason to want to see more genuine BEE advancement in mining, where many past deals created very few, very rich black people, who may or may not have been related to our President or his chums.

However, mining is a business, contributing to growth, jobs, exports and – when it is done right – to the development of communities.

Wring too many black ownership concessions out of the miners, and they will flounder, you will scare off new investment, and the country will suffer.

This stand-off is too important to ignore, and we must hope that some way forward can be devised before the – real and grown up – Mining Indaba in Cape Town early next year.

John Fraser is Associate Editor of The Cape Messenger.  He has worked in the mining industry, and is a previous Resources Editor of Business Day

 

 

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