New-look mine charter is a win-win for all
MOSEBENZI ZWANE: Why investors should embrace the new Mining Charter
South Africa needs a radical economic transformation push that will act as a catalyst for economic growth, writes Mosebenzi Zwane
We have spent the last 14 months engaging a wide range of stakeholders.
The process of consultation was arduous. The views of all stakeholders were carefully considered against each other and against the mandate of government.
We believe the final version is a true reflection of the views of the majority.
There has been some anxiety in the industry since the first draft was published. It was published at a time when uncertainty existed over the notion of "once empowered, always empowered" in relation to empowerment deals in the sector.
With this final charter, we are creating the certainty that has been sought by the broader investment community. We believe that such certainty comes at a time when South Africa needs it most. We have a responsibility as government to address the historical imbalances that have prevented black people from benefiting from the development of the country's mineral resources. We are but a custodian of these resources on behalf of all South Africans.
The Mineral and Petroleum Resources Development Act of 2002 was a pioneering piece of legislation that vested the custody of all mineral and petroleum resources with the state. Coupled with the Mining Charter, it has led to the emergence of new black captains of industry, including the likes of Patrice Motsepe of African Rainbow Minerals, Daphne Mashile-Nkosi of Kgalagadi Manganese and Bridgette Radebe of Mmakau Mining.
What we seek to do with the 2017 charter is to expand on this success by broadening the participation of black people in the mining industry as shareholders with much larger stakes, giving them shares that allow real ownership of these assets over a prescribed period of time.
For this, we offer no apology. South Africa needs a radical economic transformation push that will act as a catalyst for economic growth, job creation and broader participation in key sectors.
The Mineral and Petroleum Resources Development Act empowers the minister to "substantially and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the mineral and petroleum industries and to benefit from the development of the nation's mineral and petroleum resources".
I would be failing in my mandate if I did not give full effect to this important provision of the law, using the charter as an instrument of much-needed change.
Those who have made it their mission to preserve middle-class interests at all costs will oppose attempts to deepen transformation in the mining sector. Investors who are serious about the development of the local mining industry and are not just interested in extracting profits for short-term gain have every reason to embrace, rather than fear, radical economic transformation.
In the long run, a transformed mining sector that embraces ownership and employee diversity is more at peace with the communities it serves, allowing it to operate in a stable environment that is conducive to sustainable business.
South Africa's mining industry faces many challenges, the latest being the slide of the country into a technical recession. In the 2009 recession, government ramped up spending on infrastructure to grow and create jobs.
This Mining Charter will assist the mining industry, which is facing internal and external pressures, to open up to broader participation through the entrance of new players, and through greater empowerment of mineworkers.
Have we consulted enough with all the parties that are affected by the revised charter?
After formulating the new charter, the Department of Mineral Resources published the draft for public comment in April 2016 and gave interested parties 30 days to submit comments. The department also consulted stakeholders in the industry, including labour, business, mining companies, public interest groups, research institutions, financial institutions, suppliers and trade associations.
What is the department's obligation in terms of public consultation? The department sought advice on this question.
While the Mineral and Petroleum Resources Development Act does not sanction a consultation process when the minister develops or reviews the Mining Charter, he is still obliged under the Promotion of Administrative Justice Act to consult the public when making or reviewing legislation delegated to him - such as the Mining Charter.
Given that the department has consulted broadly with stakeholders, it must be kept in mind that such consultation does not automatically translate into an obligation to accept all submissions and suggestions, especially those that object to provisions of the charter which we deem fundamental to advancing radical economic transformation or those that conflict with the mandate of the government.
We have given due consideration to the submissions made and we will not be held ransom to those views that seek to derail transformation in the minerals sector. As with any legislation that has far-reaching implications, it is almost impossible to please all parties.
We expect that some of the aggrieved parties might take their objections further, including an approach to the courts for review.
Should this happen, we are hopeful that the judiciary - recognising the separation of powers doctrine - does not usurp the role of the executive in exercising its power. Judges must refrain from making morality calls because today's judgments, if not challenged, become precedence tomorrow.
What is not in dispute is that genuine transformation deals have to take place in mining if a broader section of the society is to participate in an industry that is the bedrock of the economy. Our engagement with stakeholders, including the Chamber of Mines, has led to compromises that hopefully address disputes such as the "once empowered, always empowered" impasse.
Where a mining company had achieved the 26% threshold, but black shareholders exited before 2014 when we assessed compliance, those companies would have been deemed not to have complied. We have since changed this to say they will now be recognised as having historically complied until 2017. They will be given an additional 12 months to remedy the percentage drop and increase black shareholding to 30%.
The reviewed Mining Charter is an instrument of positive change that will result in genuine transformation in the ownership, employment and spending patterns of the mining industry.
It's a win-win for all of us.
• Zwane is the minister of mineral resources