Zwane goes rogue as he seeks to bulldoze through new BEE mining regulations
(Bloomberg) — South Africa’s Chamber of Mines said it will refuse to attend a last-minute meeting with the government on Thursday as the mines minister prepares to release revised regulations for the industry.
A process to review and amend South Africa’s mining charter “has been concluded” and Mineral Resources Minister Mosebenzi Zwane will hold a press briefing at 10:00 am in Pretoria, the capital, on Thursday, the Department of Mineral Resources said in an emailed statement on Wednesday.
The Chamber of Mines, which represents the nation’s biggest operators including Anglo American Plc and Sibanye Gold Ltd., received an invitation on Wednesday afternoon for a meeting with the ministry that is scheduled for an hour before the start of the press briefing, the industry lobby said in an emailed statement.
The chamber “will not be co-opted into participating in an attempt by the department to provide any support into what we believe has been a flawed process,” it said in the statement. The ministry has “not seen fit” to engage properly with stakeholders about the content of the charter, the chamber said.
Deterring Investment 101: Zwane wants to up BEE mine rule despite warnings
In what could be the final kicks of a dying horse, the Zuptoid faction in the ANC continues to push through poorly cobbled together regulations as part of their ‘radical economic transformation‘ rhetoric. Bloomberg is reporting that Mines Minister Mosebenzi Zwane (of the famed 2016 bank probe saga and a close Gupta ally) wants to up black ownership of mining assets from 26 percent to 30 percent. This is despite criticism from the industry and even some parts of his party. If the ANC boots out Zuma at its NEC meeting this coming weekend, one hopes that it will be the end of days for Zwane. Transformation must happen – but it must be realistic and shouldn’t harm what is still one of South Africa’s most key sectors. – Gareth van Zyl
(Bloomberg) – South African Mines Minister Mosebenzi Zwane has proposed raising the mandatory black ownership of mining assets to 30 percent from 26 percent, drawing opposition from some ruling-party officials who fear it will deter investment, two people familiar with the situation said.
The proposal is part of a long-delayed draft mining charter outlined by Zwane, an ally of President Jacob Zuma, to the African National Congress’ economic policy committee on May 13.
Senior party policy officials warned of the potential negative consequences of his plans, said the people, who asked not to be identified because Zwane hasn’t formally proposed the changes for public comment before they become binding.
Zuma’s cabinet on Wednesday approved the draft mining charter, which will be released for public comment once it has been gazetted. ANC spokesman Zizi Kodwa didn’t answer calls seeking comment. It’s unclear whether the cabinet demanded changes.
South Africa’s Chamber of Mines said this week that the government needs to finalise its mining regulations if falling investment in the industry is to be reversed. Zuma, who’s due to step down as leader of the ANC in December and as the nation’s president in 2019, has called for “radical economic transformation” to more fairly distribute the benefits of South Africa’s economy among the black majority.
Colin Collard: Reading between the lines of Mosebenzi Zwane’s Mining Charter
JOHANNESBURG — South Africa is one of the world’s best-endowed countries in terms of mineral wealth. Yet it ranks only 66th in the world for its attractiveness as a destination for mining investment. In 1986, the industry employed 832,000 people. By last year that figure had dropped to 485,000. Then, as now, the industry is a huge employer of largely unskilled labour. Of course, mines have closed because ore has run out. But investors blame government meddling – and the hostile labour environment – for the industry’s continuing downward spiral. On June 15 the Minister of Mineral Resources, Mosebenzi Zwane, released his new Mining Charter. Is it yet another instance of government interference? Will it be benefiting the poor and jobless or, once again, is it simply a tool to enrich the chosen few in the ANC’s elite, including their friends? Here we delve into the mining minister’s thinking. In italics, how he presented it to the nation – and in Roman type, what we really believe goes through his mind. – Colin Collard
“The mining industry has been the bedrock of the South African economy for over 100 years. The sector has made many positive contributions to the development of our economy, and some of the infrastructure and industries thriving today are as a direct resulting of mining.
“We cannot deny, however, that there have been some undesirable effects, brought on by decades of colonialism and apartheid.
“Unemployment, inequality and poverty have been growing over the years, creating an untenable situation.
“Of course, people like to blame the ANC for the widespread unemployment. They say we lack ideas, are anti-business, don’t know what we are doing, etc. But we’ve been in power for, what is it, just under a quarter of a century—that isn’t long, is it?
“What is comforting is that today a poor rural shack dweller visiting the city can see many blacks who are rich, indeed some who are very rich. So, even though it is taking a little bit longer than we wish, we are getting there, aren’t we? Anyway, we’d like to spread this type of wealth around a little more. And that’s the purpose of this Mining Charter.
“The birth of South Africa’s democracy in 1994 brought about political freedom for all. Vast economic imbalances remain a challenge, particularly when the majority of South Africans have yet to see meaningful economic participation or ownership of these minerals.
“Naturally, I am not discounting the 40% of earnings the mining industry contributes to government in tax, a rate which many say is among the highest in the world. And I am not denigrating the mining industry’s contributions by way of licenses or its royalty payments to communities. Or that mining employs half a million people who in turn pay taxes to the government. I am also not unmindful of the dividends the mining companies pay to the state’s Industrial Development Corporation and to the government employees’ pension fund. Or even the R200 billion that has already been transferred to black individuals or organisations in empowerment deals. We, as government, see none of these contributions as a problem.
MINISTER DEFENDS NEW MINING CHARTER
Johannesburg – Mineral Resources Minister Mosebenzi Zwane has said that the controversial 2017 Mining Charter gazetted last week was meant to be a catalyst that provides practical expression to the country’s goal of a more inclusive economy.
“We encourage the young people who are the future of this country to embrace the Mining Charter by exploiting the opportunities to be unleashed by this instrument of change,” Zwane said.
“We will be embarking on provincial roadshows in the next two weeks to raise awareness and to take the Charter to the people.”
Zwane said this when he was tabling the R1.779 billion Budget Vote of the Mineral Resources Department in the National Council of Provinces on Wednesday.
The reviewed Mining Charter has caused a lot of uncertainty for stakeholders and the markets by setting new black ownership targets for the industry.
The Chamber of Mines vehemently rejected it, saying that the department had not held meaningful consultations before the introduction of some of the items, and thus it would approach the courts to interdict its implementation.
The targets include new mining rights, holders having 30 percent black ownership to be shared among employees, communities and black entrepreneurs. Mining rights holders who have complied with the previous target of 26 percent have to “top up” to 30 percent within 12 months.
Those applying for prospecting rights would be required to have a “minimum of 50 percent plus one black person shareholding”. These shareholders must have voting rights.
The National Union of Mineworkers (NUM), on the other hand, welcomed the reviewed Mining Charter, saying that it appreciated the increase from the initial 26 percent to the 30 percent minimum BEE shareholding in the industry.
Zwane said the majority of the people of South Africa who make up 90 percent of the population remained excluded from the economy. He said the economy remained lopsided, unequal and non-inclusive because of the legislative framework.
Zwane said this was a huge detriment to South Africa’s socio-economic growth efforts, adding that the need for radical economic
transformation was more imperative than ever before because it sought to redress the institutionalised monopoly of the economy.
“Economic reforms are needed to ensure broader and inclusive participation to enable the attainment of a far more inclusive and competitive economy,” Zwane said. Read More ….