THE MINING charter, under which the government requires 26 percent of the sector to be in black hands by the end of the year, was a shameful document and betrayed the country’s economic needs, Duma Gqubule, the founder of KIO Advisory Services, said last week.
Speaking at the Community Bua Lekgotla in Midrand, Gqubule said it was a mistake for the mining charter to set a target of 26 percent.
There were no clear mechanisms to monitor compliance with the charter and bigger stakes should be given to communities.
This was because South Africa’s minerals in the ground were worth $4.7 trillion (about R50 trillion), as valued by Eco Partners in 2012, he said. This figure nearly doubled the previous $2.5 trillion estimate by Citi Bank, Gqubule noted. “This means that the value of these minerals is $1 million for every citizen,” Gqubule said.
“Mining is different from other sectors. Unlike restaurants, it is publicly owned because the resources belong to the state and it must benefit all South Africans.”
South Africa has the largest reserves of platinum, chrome ore and manganese ore.
Gqubule said an alternative economic vision had to be found. For example, the state should own 25 percent of mining companies, empowerment entities should own 25 percent, and 7.5 percent must be allocated to employees. He wanted employee share ownership schemes to be improved.
He suggested a 50-50 split of royalties for the communities and a state-owned mining company to benefit all South Africans. The creation of a sovereign wealth fund similar to Norway’s would be an advantage, he said.
The Norwegian sovereign fund was created to invest parts of the large surplus generated by that country’s oil sector. The surplus was generated mainly from taxes of oil companies.
The Community Bua Lekgotla was an alternative to the Mining Lekgotla hosted by captains of industry about 3km away. It was organised by the Mining Affected Communities United in Action.