Mining firms exceed 2014 charter calls

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IOL BR Kumba 13-0371 (42749366) SUPPLIED Houses Kumba Iron Ore built for its staff at the new Kolomela Mine in Postmasburg. It is a model for compliance with the mining charter.

Johannesburg - Despite criticism that mining companies will not meet their obligation to the mining charter targets, some have exceeded their targets in various elements, according to a snap survey by Business Report.

The issues in the amended mining charter of 2010, including the provision of housing to employees who live in squalor, lay at the root of the labour unrest in mid-August 2012 that resulted in the killing of 34 people in Marikana.

President Jacob Zuma said the mining industry would be held to account to comply with the charter scorecards by the end of the year.

Mining companies were expected to convert or upgrade hostels into family units, attain the occupancy rate of one person per room and also aid home ownership options for mine workers, Zuma said.

“We urge the companies to meet the 2014 deadline for these targets and extend this right to dignity to mine workers,” Zuma said.

While mining companies were positive that they had met, and even exceeded, some elements of the charter, the Department of Mineral Resources said that all would be revealed in its report on compliance expected later this year.

“The report will illuminate the findings to this extent when the minister releases it during the course of the financial year,” Ayanda Shezi, the department spokeswoman, said.

Mining right holders were required to submit an annual report detailing their compliance to the charter and Social and Labour Plan to the department, which made routine inspections to monitor compliance, Shezi said.

“Where there is non-compliance, directives and orders are issued for the right holder to take immediate rectifying steps within a reasonable stipulated time frame.

“Should the holder not implement rectifying steps, this may lead to the minister cancelling or suspending the [right] in terms of Section 47 of the Mineral and Petroleum Resources Development Act.”

The mining charter provides a framework for addressing the legacy of apartheid through the transformation of the 100-year-old industry and the empowering of previously disadvantaged individuals. It requires that 26 percent of ownership should be in black hands by the end of the year.

It also compels the industry to uplift mineworkers, host communities and mineworkers from labour-sending areas through the provision of services, including housing.

Most mining firms were on course to meet the charter’s targets, and there were some mines that had exceeded some elements of the charter, Vusi Mabena, the Chamber of Mines’ head of stakeholder relations, said on Friday.

Mabena said companies who had hostels had converted almost 90 percent of these into single rooms or family units, and some companies had helped their employees buy their own homes through various housing schemes.

“As at 2013, most companies who are members of the chamber exceeded their requirement of procurement expenditure, where they were expected to spend 30 percent of procurement on capital goods, 60 percent on procurement of services and 40 percent on procurement of consumables, all on the previously disadvantaged,” he said.

Kumba Iron Ore is a model for compliance to the mining charter, and Envision, its successful share ownership scheme, is a case in point. Through Envision, 6 200 employees below management were paid out R2.7 billion at the end of its maturity date in 2011.

“For us it is not about ticking mining charter boxes, but about the successful broad-based transformation of the industry,” Yvonne Mfolo, the executive head of corporate affairs at Kumba, said.

Kumba met the 26 percent empowerment target since listing in 2006 when 20 percent of the equity in its operating company, the Sishen Iron Ore Company (SIOC), was transferred to Exxaro, 3 percent to the Envision Trust and 3 percent to the SIOC Community Development Trust (SIOC-cdt).

“More than 80 percent of employees are local – recruited from the areas around our mines – and the few hostels were converted into high-quality family and single-occupancy accommodation a few years ago,” she said.

“We annually spend around 1.3 percent of net operating profit after tax on community development – against the mining charter’s requirement of 1 percent.”

AngloGold Ashanti, the country’s biggest gold producer, said it had exceeded the 26 percent black economic empowerment target.

“We are currently standing at 26.8 percent, with the majority comprising asset sales to African Rainbow Minerals, an employee share ownership scheme and a small stake to our empowerment partner, Izingwe Holdings,” spokesman Chris Nthite said.

About 99 percent of hostels were converted into single rooms, and 100 percent of residences were converted into two and three bedroom units.

Harmony Gold has also exceeded the 26 percent target and has 28 percent black ownership. It has also has exceeded employment equity and procurement targets.

Harmony needs to catch up on housing, as it has not met its targets to convert and upgrade hostels to reach the occupancy rate of one person a room. It has committed to converting three hostels into 1 000 family units by the next financial year.

Meanwhile, Lonmin was talking to the Bapo Ba Mogale, its host community, about an empowerment transaction, spokeswoman Lerato Molebatsi said. “By all accounts we should have finalised this by the end of September or so,” she added.

Molebatsi said the group was also in the final stages of completing its hostel conversion, and this work would be finalised by the end the year and would remain compliant with the charter requirements.

Lonmin committed to eliminating single sex hostels by the end of the year. It converted 23 hostels into family or single units last year, and 21 conversions remain.

However, the Bench Marks Foundation found that Lonmin had planned to build 5 500 houses for its employees living in informal settlements by 2011, but had built none.

Impala Platinum said its conversion of hostels had been completed, and it was accommodating one person a room in advance compliance with the charter’s requirements.

Business Report



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