President Cyril Ramaphosa will have his work cut out for him restoring trust to the country’s fragile mining sector. In his first State of the Nation address Ramaphosa’s intentions became clear when he stressed the importance of mining to the South African economy, committing government to re-engaging in talks with industry over the Mining Charter. Expressing his opposition to the implementation of the charter in its current form, Ramaphosa called on industry to postpone court action brought by the Chamber of Mines at the end of 2017 after a complete breakdown in talks with Minister of Mineral Resources Mosebenzi Zwane. “If his statements are genuine, and not mere politicking, then there is cause for hope,” said Jonathan Veeran, a partner at Webber Wentzel. He told FTW that Ramaphosa’s sentiments, coupled with a commitment to a more efficient and less corrupt administration, would result in great interest and more investment in South Africa’s mining sector which is currently on the brink of disaster. But, said Veeran, mining was not out of the woods yet. “Right now, the industry is poised on a knife’s edge. So much depends on what government and the newly installed ANC management team do in the weeks and months ahead,” he said. Mining has suffered tremendously from policy uncertainty in the past few years. With the Mineral and Petroleum Resources Development Amendment Act, 2013 still not finalised, industry felt it had no other choice but to head to court when Zwane unilaterally pushed through with the Mining Charter – despite widespread opposition. “We welcome the president’s intervention and his commitment to engaging meaningfully with stakeholders in the industry and others on a new Mining Charter,” said Chamber of Mines president, Mxolisi Mgojo. “Ultimately, a new Mining Charter must be developed and resolved through negotiation, with representation by a broad range of stakeholders – government, business, labour and communities. For the Chamber of Mines, and the industry, legal recourse was always a last resort, intended to get the parties to the table, and the sooner we do that the better for the industry and our country.” In a statement Ramaphosa said it was regrettable that there had been insufficient consultation on the issue of the postponement, stating that government would ensure that the matter was corrected in engagement on the Mining Charter going forward. “In its current form, the Department of Mineral Resources' charter will jeopardise the viability of an industry that is already under significant economic pressure, an industry which contributes significantly to transformation, and an industry which contributes overwhelmingly to the economy of South Africa,” said Roger Baxter, CEO of the Chamber of Mines. He said the Chamber had agreed to postpone its court application on the basis of the Presidency’s commitment to resolving the impasse over the Mining Charter and to facilitate a process of developing a New Mining Charter by way of negotiations. According to Veeran engagement between Ramaphosa and industry stakeholders is critical. He said early indicators were positive such as the marginalisation of Zwane from the first talks with industry. “The president knows the issues and is very familiar with the mining industry,” said Veeran. “Mining is the bedrock of this country. Engaging with the stakeholders is critical. The best solution to overcome the impasse is to sit down, formally, agree on the vision, and then approach the practicalities of how this can be achieved.” Mining houses have previously warned Zwane that South Africa is not the only country in the world with minerals and that investment will simply move elsewhere unless it addresses the controversial pieces of legislation it wants to introduce. Making sure they stay is now squarely in the hands of the president.
INSERT
A new Mining Charter must be developed through negotiation, with representation by a broad range of stakeholders. – Mxolisi Mgojo
