Mantashe lacks vision of how mining can benefit SA

6 April 2018 - We are told that representatives of the mining industry came close to walking out of the first round of new negotiations over the Mining Charter, chaired by the new minister. It’s a pity they didn’t.

 David Christianson

We are told that representatives of the mining industry came close to walking out of the first round of new negotiations over the Mining Charter, chaired by the new minister. It’s a pity they didn’t. The issue was Gwede Mantashe’s insistence on using the sorry third version of the charter, produced by his disgraced predecessor, as a starting point for the process.

Mantashe has promised to deliver a mining charter agreement within three months. He evidently believes the way to do so is to negotiate the many points of difference between the government and industry.

This week’s high-court ruling that empowerment deals do not have to be topped up once they reach the specified level (rumoured likely to be raised to 30%) makes a successful compromise between his department and the Chamber of Mines more feasible.

But another part of the ruling has to make us wonder why we are bothering with a charter at all. The high court ruled that the requirements of the charter are not legally binding, only aspirational. But aspirations for the industry should be much higher than simply dividing up a fixed, indeed perhaps shrinking, pie.

 What is nowhere near the negotiating table is the idea that an explosion in mining investment and activity is possible and would be good for SA.

Of course, if miners are required to carry an additional 30% cost, that requirement will render SA’s mineral deposit more expensive to mine. For it is only those who cannot access the industry — through lack of capital, skills or experience — who need such legislation. Any competent black-owned mining company does not need this sort of assistance.

Walking out of negotiations last weekend would have sent a very clear message to the new minister. It would have told him that Ramaphosa-style fudging and compromise is not a viable way to realise the great potential of SA’s resource wealth.

What is needed instead is a completely new vision from the government that revolves around investment, jobs, profits and the development of new mines. Instead, we are observing the spectacle of petty trade-offs for a better seat on the deck of a foundering vessel.

Sadly, Mantashe appears to have neither the inclination nor the mental apparatus to produce the required vision. He is an old socialist and trade unionist who seems to have little grasp of the transformative potential of capitalist investment. He did write a master’s thesis on mining but its subject is trade union responses to the decline of the industry. He has so far shown no inclination to rise above this partisan viewpoint and consider mining from a national interest perspective.

The third version of the charter is riddled with special-interest politics all seeking the rentals mining can offer. Black business interests, trade unions, traditional leaders and communities all seek to benefit through some sort of largely passive interest. One has to ask what a bunch of wannabes such as the South African Mining Development Association brings to the process? The answer is "nothing". But they, like so many other hangers-on, are hoping for a handsome return on their negligible and risk-free contribution.

The entire charter process has done what it is capable of doing and should now be folded up and packed away. As a vehicle for special interests it is damaging the interests that should count most — those of the nation as a whole.

In any case, the idea that publicly listed companies can be categorised as "black-" or "white-" owned is increasingly looking like the nonsense it always has been. Shares in listed companies are mostly owned by institutional investors who are entirely colour blind.

The minister should not be fudging into a compromised future. He should be clearly articulating a vision of what it could be and what that could mean for the country.

• Christianson is a policy fellow at the South African Institute of Race Relations.