VUSLAT BAYOGLU: How Gwede Mantashe can broaden his vision

During his first term, then mineral resources & energy minister Gwede Mantashe had a knack of infuriating anti-coal lobbyists. At mining conferences he would make light of their criticism and proclaim himself a “coal fundamentalist”. His public stance on the coal economy — mining and associated downstream industries — remains the greatest cause of his unpopularity in many circles.

Negative assessments of his performance can be attributed to the dual role of having been the minister responsible for mineral resources and for energy. Critics saw this as a conflict of interests. As a mining minister, he supported coal mining, a sector that employs about 20% of the total mining workforce of 489,000. Yet an energy minister who supports coal was bound to cause unhappiness among proponents of alternative energy sources.

If they were fair, his critics would acknowledge that Mantashe’s first term was characterised by unprecedented approval of renewable energy generation projects since the Renewable Energy Independent Power Producer Procurement Programme launched in 2011. The scale and speed might not have been to their liking, but it is thanks to his role that many projects were constructed and others are still ongoing. Nor were his critics happy that he criticised the planned shutdown of Eskom’s power stations.

Mantashe’s draft Integrated Resource Plan also came under fire for daring to make provisions for coal and nuclear power. It was described as outdated, though much of the criticism seemed ideological and based on self-interest. Yet even a favourable assessment of Mantashe’s performance could not omit his Karpowership strategic error. Load-shedding made us vulnerable to all sorts of schemes and scams, and Karpowership was one of them.

If the load-shedding respite continues, we will be able to weigh our options calmly and rationally — keeping the lights on by running Eskom power stations properly can illuminate policy-making processes. As electricity & energy minister Kgosientsho Ramokgopa prepares to procure more renewables and nuclear, he can do so rationally rather than with a gun (load-shedding and lobbyists) held to his head.  

With President Cyril Ramaphosa having unbundled the mineral resources and energy portfolios, Mantashe can no longer be accused of being conflicted. His gaze is now firmly on mining and petroleum resources. The former mineworker can now show what he is capable of when he is not overstretched and distracted by emotional energy debates.  

There is, of course, no neat separation of portfolios. Coal being the biggest source of energy means Mantashe’s regulation of coal mining has a direct effect on our energy security. In addition, how he regulates the mining of minerals that are critical for the energy transition will also affect SA’s involvement in the energy transition value chain.

It would have been wiser if his mineral & petroleum resources portfolio had an appendage to it in the form of mineral beneficiation. A competitive mining sector and relevant trade policies could help build a thriving beneficiation value chain for our minerals. But that’s for another debate.

In his first term, Mantashe vowed to implement Ramaphosa’s vision to turn mining into a sunrise sector. A lot can be done to implement the vision. I highlight a few must-dos.  

First, he must speedily complete the transparent mining licence application system. For a long time, investors have been complaining about inefficiencies in the application process. While investment has not stopped — contrary to some fearmongers — it hasn’t been up to the potential the country deserves.

His support for mining is not in doubt. In his first budget vote speech after the 2024 elections he committed to support mining, acknowledging the importance of an efficient and transparent licensing regime. He must make sure his officials in the department share in his vision to restore and boost investor confidence through the efficient processing of applications and adjudication of disputes.  

The recently procured cadastral system must be fully implemented with speed. He has set a deadline for June 2025 to migrate to the new system. While the implementation of the system is pending, the industry would like to see some improvements to the current system. 

Mantashe would do well to set a realisable deadline to clear mining application backlogs. Regular and actual reporting on progress that the various regions of the departments are making would go a long way in boosting confidence.

Second, he must develop regulations to help compliant mining companies deal with community-related instability and disruptions. Companies have a responsibility to build sustainable stakeholder relationships with communities. However, even those that have demonstrated good corporate citizenship are not guaranteed peaceful operations.

Extreme poverty, high unemployment rates, crime and poor local political leadership often combine to heighten political risks for mining investments. The failure of some municipalities to deliver basic needs has put pressure on mining companies to play some role as service delivery providers.

In some cases municipalities take time to approve local economic development projects that mining companies are expected to execute as part of their compliance requirements for the legislated social and labour plans. Mantashe should collaborate with the new co-operative governance & traditional affairs minister, Velenkosini Hlabisa, as well as municipalities that host mining operations to tackle these challenges.

Third, he must foster collaboration between the departments of environmental affairs and water & sanitation. The government’s licensing processes and systems are misaligned. While mineral resources has been good at following up on mining activities once licences have been granted, it hasn’t always considered the licensing delays that investors encounter in attempting to secure environmental and water licence approvals. The government’s 90-day licensing period is often breached.  

A central joint departmental tracking system across all the regulators and relevant departments would go a long way in improving efficiencies and transparency, and boosting investor confidence. Departments such as social development and employment & labour should be given access to the progress of applications and be allowed to comment as they would have better appreciation of the urgent need to encourage economic development and employment that would reduce dependence on state support.  

Importantly, Mantashe acknowledged in his budget vote speech the need to cut bureaucratic red tape. He said he would initiate a review of the Mineral & Petroleum Resources Development Act to improve efficiency. It would be helpful if he could also leverage work done by business person and mining entrepreneur Sipho Nkosi, who has served as the president’s adviser on reducing bureaucracy.

Fourth the minister must develop technical and legal capacity in the department to shape favourable mining jurisprudence. SA is under relentless legal attack from well-resourced and foreign-funded anti-mining interest groups. They are strangling new mining projects, preventing the exploration of oil and gas fields and ultimately enforcing SA’s economic regression.

Using their constitutional rights to litigate, they are shaping jurisprudence to achieve yet another aim: to undermine SA’s global economic competitiveness. However, with improved decision-making, improved legal capacity to tick all the legislative boxes and proper collaboration with mining investors, the government can thwart the threat and defend its constitutional obligation to lead economic development in the country for the benefit of its citizens.

Fifth, an inclusive consultative approach must be developed. Mantashe’s consultative meetings with the mining “industry” must be exactly that — meetings with the “industry”. Mantashe’s championing of the industry’s broad interests is not in doubt — for example, he acknowledged the importance of increasing mining’s share of GDP beyond the current 6%.

But he needs to broaden his consultations with stakeholders. One industry body doesn’t constitute the whole industry. An inclusive, broader platform for consultation could aid his policy-making and boost the legitimacy of his work among all investors, including those that don’t have the capacity or willingness to shout the loudest when they are unhappy.  

• Bayoglu is MD of private mining investment company Menar.