Mining Indaba: The struggle continues
Strain between companies and government over legal challenges to the industry’s mining charter drags on
Though rising tensions between the mineral resources department and the SA mining industry dominated some corners of this week’s Investing in African Mining Indaba in Cape Town, in other corners junior miners were dusting off mothballed projects in the hope that rising prices would attract funding.
In a vague and stumbling speech opening the conference, mineral resources minister Mosebenzi Zwane said the long-awaited amendments to the Mineral & Petroleum Resources Development Act (MPRDA) are being finalised “urgently” and should be completed by June. Government will also gazette the new mining charter for the industry (the original draft of which has alarmed companies) by March, he said.
We cannot encourage a situation where courts take the place of government. We should be able to move decisively as governmentGodfrey Oliphant
Zwane insisted at a media conference that his department consulted at least 60 different stakeholders on the new charter and held six sessions with the chamber of mines. The chamber is not the only stakeholder that matters, he said.
“At the end of the day government will take a decision and gazette it,” he said.
Deputy minister Godfrey Oliphant said the charter is not a voluntary agreement but has legal force under the MPRDA.
Peter Leon, a partner at law firm Herbert Smith Freehills and co-chair of its Africa practice, said it is hard to see how the minister could gazette the charter by March when it has been so strongly contested by the chamber, which still seems to have issues with it.
In the same week that court action by law firm Malan Scholes to challenge the constitutionality of the charter begins, Zwane and Oliphant took aim at mining companies that resort to court to settle issues they do not agree on with government.
“We cannot encourage a situation where courts take the place of government,” Oliphant said. “We should be able to move decisively as government.”
Anglo American CEO Mark Cutifani said the next three to four months will be the most critical in SA mining’s past 150 years.
He said the biggest owners of mining assets in SA today are ordinary individuals of all races through their pension funds, not the randlords of the past, so the personal motives of those who continue to ignore these changes have to be questioned. “Capital has no colour today and it can create a better country for all,” he said.
Corporate presentations at the conference highlighted last year’s surge in commodities and share prices which, after a lengthy period of cost-cutting by mining companies, is starting to attract investors back to the sector. Base metals such as zinc and battery metals like lithium were among the most talked-about commodities and there was no shortage of gold bulls on fears that US president Donald Trump’s stimulatory policies could reignite inflation.
Economist and author Dambisa Moyo said there is a 35%-40% chance of recession in the US by the end of next year. She also warned that the consequence of interest-rate increases in the US will be a stronger dollar. That, and the raising of trade barriers, will put commodity-producing countries in Africa with high sovereign debt under pressure.
The Mining Indaba, which is owned by Euromoney, is in its 23rd year. This year it attracted about 5% more registrations than last year and fees for mining and exploration companies were cut by up to 50% to achieve a better balance between mining companies, investors, governments and service providers.