Adding to the chorus of executives decrying the third version of the Mining Charter, outspoken Royal Bafokeng Platinum (RBPlat) CE Steve Phiri said the "shabbily" drafted document could bring the industry to its knees if implemented.
Speaking at the release of the company’s interim results, Phiri said the charter, which Mineral Resources Minister Mosebenzi Zwane has suspended pending an interdict and judicial review started by the Chamber of Mines, had come at the worst possible time, particularly for the platinum sector, where 65% of mines were unprofitable.
News about corruption and wrongdoing by government ministers "with monotonous regularity" was forcing investors to "think deeply" before putting money into the mining industry.
"Besides the contents thereof, which are scary to say the least, the charter is a shabbily drafted, confused and ambiguous document. It was clearly drafted with no modicum of expertise in draftmanship.
"You cannot transform at the expense at the downfall of the economy of the country. It should not be used as a populist football," Phiri said.
"We should not produce an unrealistic and unachievable piece of work and sugarcoat it as transformation when it is so bitter and unpalatable to the core. It will implode on us. The industry will fall flat, the economy will further falter and capital will be chased away."
His comments follow similarly stinging comments from the heads of Kumba, Anglo American Platinum (Amplats) and Anglo American, which were summed up by the latter’s CE, Mark Cutifani, who said the document needed a complete overhaul through a collaborative process of all stakeholders.
The ANC appeared to have cut Zwane down to size, though he has remained unapologetic and unwilling to enter into further talks. ANC secretary-general Gwede Mantashe said this week mining had to be dealt with in a way that was not seen as punitive and that parts of the charter needed to be reworked.
The National Union of Mineworkers, which endorsed the charter when it was released, has since taken umbrage at Zwane’s plans to impose a moratorium on new mining and prospecting rights, as well as the transfer of mineral rights, calling on Monday for Zwane’s departure.
Phiri said this was heartening. "We hope … wisdom will prevail and a realistic charter with realistic targets will be achieved through honest and meaningful engagements."
RBPlat is suspending work at an unprofitable area, shedding 636 employees, 213 of whom are contractors. The entire shaft would be mothballed at the end of 2018, but if prices improved the company could easily restart mining there, Phiri said.
RBPlat posted a R32m loss for the six months to June compared with a R193m profit in the same period a year earlier.
Revenue was dragged 10% lower to R17.7bn, because of the decline in rand platinum prices as the currency gained strength.
RBPlat, which is building the new Styldrift mine, has started talks with neighbouring Platinum Group Metals, a Canadian company that has run into difficulties at its Maseve mine.
Chris Griffith, the CEO of Amplats, the partner in Styldrift, said last week the interest in Maseve was purely in the surface infrastructure.