The release of the Mining Charter is proof that the South African government does not care about long-term and sustainable transformation in the mining sector.
In presenting his new rules, which amount to a massive giveaway of mine value to the ANC’s favoured groups, Minister Zwane has opened the doors to more crony enrichment.
Share schemes for miners that are structured to benefit the workers and are economically viable is what is needed for the mining industry.
One way of diversifying the mining sector would be to bring mine workers into mining schemes. It’s pointless to try and diversify if it leads to the collapse of companies.
But this is not what the government is proposing. Instead, the Mining Charter proposal wants to make cronies and insiders richer, as they open up new opportunities to get in on mining deals.
We have seen the devastating impact of how connected cronies, like the Guptas, prey on deals like this and how they facilitate capture of resources.
The reality is that only 8% of ownership will ever make it into the hands of mineworkers under Zwane’s proposal.
Zwane’s proposal also seeks to win back the favour of the National Union of Mineworkers (NUM) who are unhappy because of State Capture and a declining industry.
“We believe that the requirement announced by Minister Zwane that all prospecting rights must be 50% +1 BEE inclusive, will mean the virtual death of prospecting.
The BEE sector is perennially short of cash, particularly for speculative actions like prospecting. The amount of prospecting will plummet. Even if there are new finds, capital will be extremely difficult to raise,” said James Lorimer from the DA.
Almost 450 thousand South Africans work directly for the mines. At least as many again work in associated industries. The future of their jobs is now in doubt.