Leaders must inject hope into mining to unlock jobs and investment waiting in the wings
Cyril Ramaphosa’s ‘bright future’ message is music to the ears of firms that have sufficient risk appetite to invest
In the late 19th century, when reports emerged of the discovery of gold in the Witwatersrand, Paul Kruger, the president of the Transvaal in colonial South Africa, was dismayed.
"Pray and implore Him who has stood by us [Afrikaners] that He will continue to do so, for I tell you today that every ounce of gold taken from the bowels of our soil will yet have to be weighed up with rivers of tears," Kruger lamented.
Fast forward to the early part of the 21st century and the president of democratic SA, Cyril Ramaphosa, says mining should be seen as a "sunrise" rather than "sunset" industry.
"We will revitalise our mining sector [and] with a revival in commodity prices, we are determined to work with mining companies and with unions and communities to grow this sector to attract new investment to create jobs and set the industry on a new path of transformation and sustainability," Ramaphosa promised.
Between the time when Kruger took a dim view of mining and the time when Ramaphosa saw a bright future in the industry, so much happened. Kruger’s fears were not misplaced. The English and Afrikaners clashed on South African soil in a war that left wanton destruction in its wake. It was sparked by the desire of the likes of Cecil John Rhodes and colonial representative Alfred Milner to expand the British Empire — a move that would tamper with the "independence" of the Boer republics including Kruger’s. British interests in SA were in mineral resources.
At the time, the Afrikaners were mainly concerned with farming. Kruger and his people saw the discovery of gold as an incentive for British expansion and the trouble foreign speculators and dealers would bring.
The English and Afrikaners had no regard for the interests of blacks. They used blacks as cheap labour in the English-controlled mines and on the Afrikaner-owned farms. The wealth of industrialisation spawned by mining was not shared with blacks.
After SA secured its hard-won democracy in 1994, the mining industry opened up to black people. There are now black millionaires and billionaires, but much more still needs to be done to reignite local and foreign investor interest in what has increasingly been seen as a sunset industry plagued by policy uncertainty.
Ramaphosa’s message is music to the ears of entrepreneurs and firms that have sufficient risk appetite to invest and hopefully get returns in a manner that is beneficial to all.
How mining can benefit all is a function of the government’s policy choices, the vision of mining entrepreneurs and the active participation of workers and communities. It is also about balancing the need to attract investment with the need to create jobs, improve salaries, ensure safety, expand ownership and care for the environment. This balance must be reflected in the government’s policies, including the Mining Charter currently under discussion between the industry and Mineral Resources Minister Gwede Mantashe.
The charter must take into account the size of mining firms. It must not be a one-size-fits-all. A charter for all should have flexible application to junior players, whose operations tend to be more labour intensive.
The abundance of resources must never amount to a curse. In an environment characterised by improving commodity prices, resource endowment should be a boon, notwithstanding the rand’s recent strengths.
The exchanges between the two groups in the community meeting chaired by an independent facilitator gave me a clear indication of the need to move SA towards economic justice
Backed by a president who promotes a social compact between business, labour, government and the community, Mantashe has an opportunity to inject confidence into the industry. If the minister listens carefully to what all role players have to say, he might find it easy to convert competing interests into mutual interests.
The bottom line is that anything that undermines business confidence would be a betrayal of the hope so many people have in Ramaphosa’s new dawn. If business people do not advise a government that is willing to listen on the best possible way to create jobs, we would be failing in our responsibility to society.
In a recent public consultation process with a community in Springs on the East Rand, where my company is in the process of opening a new mine, I was struck by the extent to which communities were divided along race and class lines. On the one hand, those from the townships made it clear that they wanted the mine to start operating urgently. They forcefully wanted local people to be employed.
On the other hand, those from the suburbs were speculating about social ills that would result from mining operations and expressed concern about possible farming disruptions.
The exchanges between the two groups in the community meeting chaired by an independent facilitator gave me a clear indication of the need to move SA towards economic justice.
To all communities that need jobs, mining must signify a sunrise, and not a river of tears.
• Bayoglu is executive chairman of Canyon Coal.