Legend tells of a rich man who became so stingy that he died of hunger with money in his pocket. The man would wake up each day and admire his treasures, resisting the temptation to spare a penny for his sustenance, until he succumbed to starvation. His heirs lived to enjoy the inheritance for generations.

This story resembles that of the Xolobeni community on the Wild Coast of the Eastern Cape, in the impoverished Mbizana local municipality. The community is embroiled in a decade-long dispute over the mining of titanium on the land they’ve inherited from their forebears. Like the stingy man, the community seems to naively sit on a pot of gold while surrounded by a sea of poverty and underdevelopment. Yet it has remained steadfast, opting to live off the land rather than succumb to the lure of underground riches as it fears the possible contamination of water, soil, air and pasture that is common to mining operations.

Investors and outsiders may view the conduct of the Xolobeni community as economically unwise. Why would a community ravaged by high levels of joblessness and poverty object to employment opportunities, they ask?

Environmentalists and conservationists laud the conduct as refreshingly reformist and particularly considerate to the needs of future generations. But ultimately, mining-related decisions must balance competing interests, be they commercial, social, environmental or related to sustainable development. Regrettably, and as is always the case, vested commercial interest tends to eclipse other equally important developmental imperatives.

Rural mining towns across SA know all too well the unrelenting pester and excessive influence of vested commercial interests when driving a profiteering agenda. Xolobeni withstood mounting pressure and internal conflict for years,  fomented in part by those driving the agenda for mining within and outside the community. Calm is yet to prevail in the community as it continues to wage legal battles against the government’s decision to issue a mining licence to an Australian company.

Interestingly, the battle lines have shifted from between the community and the mining company, to between the community and the government. A battle between two parties that are both custodians of the land and supposedly share similar interests raises disquiet.

Why is the government determined to pursue mining development against the wishes of the community, rather than supporting whatever development path they have chosen? Could this be an indication of the government flexing its muscles to protect its regulatory responsibilities, or capitulating to commercial interests, or is it simply oblivious to the legitimate concerns of the community? Clearly, something is amiss.

Granted, the Minerals and Petroleum Resource Development Act  accords the government the power to issue mining licences wherever mineral deposits exist. This licensing regime is intended to regulate title to the ground and other important considerations such as health, safety, environment and responsible extraction. Other implicit considerations relate to broader economic development, job creation, tax revenue mobilisation and rent extraction. However, the recent court judgment on the matter has established that mining licensing powers are not the sole preserve of the government. The community must be consulted and give its consent to the government before mining companies can be granted licences.

Residents of Xolobeni in the Eastern Cape say mining in the area would destroy their way of life. Picture: ROGAN WARD
Residents of Xolobeni in the Eastern Cape say mining in the area would destroy their way of life. Picture: ROGAN WARD

Mineral resources minister Gwede Mantashe has rightly argued that mine licensing cannot be left to the whims of communities alone. “We may end up with excessive corruption or no mining at all,” he says. Predictably, the government has indicated that it intends challenging the court’s ruling on the basis that the requirement for community consent may erect insurmountable hurdles in the licensing processes and prevent necessary economic development, especially if the community is as polarised as Xolobeni.

This enduring standoff, however undesirable it may seem, points to a need for reform to the mining licensing regime. The government is narrowly focusing on protecting its regulatory territory and dispensing permits or mining rights through an application process fraught with maladministration. Meanwhile, the people of Xolobeni are simply highlighting that the mere existence of mineral deposits does not necessarily mean a mining licence should be granted just because the government has the powers to do so, or wishes to drive a certain developmental agenda. Some of the mineral deposits need to be preserved for the benefit of future generations and to guarantee sustainable security of supply.

The mineral rush that has dominated SA’s economic development over the past century was driven in part by indiscriminate licensing and lax regulations. Land parcels that were once regarded as useful quite apart from the mineral riches that lay beneath the surface are lying depleted and unproductive due to years of irresponsible mining and uncontrolled output. At one point SA produced more than 90% of the world’s diamonds, but this has declined to 7%  now. A similar fate is likely to befall other strategic minerals where the country still hold significant reserves if licensing processes and output targets are not well planned and managed.

The world titanium market is relatively new and prices are not so attractive that the government needs to adamantly push extracting the Xolobeni reserves. Furthermore, SA lacks the industrial and research and development capacity to process titanium and beneficiate to produce chemicals, medical products and components for the aerospace and maritime industries, among others.

Besides, countries such as Australia, Canada and China have taken the lead in meeting global demand. SA could use its strategic position as the second-largest producer of titanium concentrates to influence global output for the benefit of its economy, through planned licensing controls among others.

Objecting to the licensing of mining in Xolobeni should not be seen as disruptive, ignorant and antidevelopment. Clearly, there are many communities where mining activities have brought nothing but devastation, reinforcing the view that mining operations benefit mining companies, investors and government alone.

What is required is for the government to adopt a people-centric, conciliatory and collaborative approach to resolving disputes. It should heed the call for suspending the licence in the medium term while building the industrial capacity to capture a substantial portion of the titanium value chain within SA.

More importantly, it must reform the mining licence regime and align it with the country’s long-term development agenda. This would ensure that our natural resources are not rapidly depleted and will continue to meet the needs of future generations.

• Rakabe is an economist, writer and researcher.