Anglo American plans to cut a third of its workforce and Lonmin has increased the number of jobs it plans to cut, show the mining industry is in dire straits in South Africa.
It is no longer good enough for government to simply blame the difficulties in mining on prevailing conditions in the world economy. It has to take positive steps to solve issues that are making mining in South Africa more difficult and less affordable.
These are limited steps that could be taken within a few days. The government simply has to provide confidence to mines that they will be allowed to operate without overly intrusive regulation.
To this end the Democratic Alliance has called on the Government to do three things immediately:
Assent to the principle of ‘once empowered, always empowered’. Government should agree that if the current 26% BEE ownership stipulated in the mining charter has been reached once, the empowerment exercise need not be repeated if BEE owners sell their shares;
Withdraw the Mineral and Petroleum Resources Development Act (MPRDA) pending a rewrite that will recognize the need for the mines to be financially sustainable, and within a framework of legislative certainty; and
Declare an intention not to raise the 26% BEE ownership level in the future.
None of these steps will cost the government any revenue.
All three are simply confidence-building measures that will show that the government recognises the crucial role in employment and foreign exchange earning played by the mines and that it values this role above its own ideological agenda.
Sectors of the mining industry are circling the drain, if government refuses to act it will have to take responsibility for those sectors disappearing. If that happens it will dramatically worsen the economic conditions for millions of South Africans.