Mines fall short on BEE – Shabangu

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ca Susan Shabangu courtney africa (File picture) Mineral Resources Minister Susan Shabangu.

Johannesburg - It was a case of too little, too late for the mining industry, which had failed to transform at the pace that had been expected of it, Mineral Resources Minister Susan Shabangu said yesterday, warning that the government would review the transformation records of mining companies operating in the country.

Shabangu told a New Age breakfast session that she could not “emphasise enough” that unless the mining industry could claim its legitimacy to all stakeholders – particularly investors, workers, host communities and host governments – “it cannot claim its authenticity”, Sapa reported.

She was speaking in the wake of the recent violent confrontations at Lonmin’s Marikana platinum mine near Rustenburg, where a week of clashes between workers and security personnel left 44 dead, including 34 workers killed on August 16 when police opened fire during an illegal strike.

“While we acknowledge the significance of the Marikana ordeal, it is apt for the industry to have a conversation about the underpinnings of such a problem, anticipate other potential challenges and recommend a concrete plan of action that will ensure responsible action from all stakeholders,” she said.

Noting that transformation was “not just a compliance issue”, Shabangu called for the building of a mining industry “that cares… [and] is proud to be part of the transformation agenda of South Africa”.

Bloomberg reported that Shabangu planned to review the performance of mining firms operating in the country as they had failed to raise black people’s involvement in the business speedily enough.

“We will… review… all the mining companies to understand” whether they “have implemented transformation as we move to 2014”.

She added that three years ago her department’s review of the sector had found that “transformation isn’t moving”.

Economist Iraj Abedian, the chief executive of Pan African Capital Holdings, said there had been a symphony of errors that had led to the mining sector’s troubles, which had culminated in Marikana.

Abedian, who was a special adviser to Shabangu until August 1, said there should instead be a “genuine collaborative spirit” in the wake of Marikana, “without political point scoring”.

The process of engagement should now be depoliticised and professionalised.

It was wrong, he believed, “to read it as if the mining companies are the only guilty parties… this is underestimating the complexity of the situation”. Business, the government and unions had all been caught napping.

There had not been a recognition that the splintering of the ANC alliance, which includes Cosatu, would lead to “uncontrollable and unpredictable outcomes”.

Peter Leon, a mining expert at law firm Webber Wentzel, called for a review of the black economic empowerment (BEE) regime which had panned out to be too narrow and favoured a narrow band of elite players.

“The promotion of BEE in the mining sector has ironically become a catalyst for the populist support for nationalisation,” Leon said, in reference to deposed ANC Youth League leader Julius Malema’s whipping up of support for state takeovers.

Leon told the SA Institute of International Affairs that when looking at how best to optimise the country’s “prodigious mineral wealth”, a significant focus had to be on those directly affected by mining.

“The issue goes much further than simply living conditions. It seeks wider recognition to the voice of the community.”

Existing BEE ventures tended to preclude broad-based share schemes with communities and workers as their beneficiaries, he argued.

Trade and Industry Minister Rob Davies told journalists at Parliament yesterday that in light of Marikana, calls for the weakening of labour rights required “critical reflection” by those who believed it fostered labour market flexibility.

Instead of making broad-based BEE less relevant, the Marikana disaster had shown it was important “to move much more expeditiously” in implementing the BEE codes.


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