Nobody is happy as tale of two indabas unfolds

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The extraction of South Africa’s mineral wealth seems to be making nobody happy. Mining executives and shareholders are unhappy about the “uncertain” regulatory environment.

Employees, contemplating garnishee-gouged payslips and difficult working conditions, seem easily lured into strike activity. And community members struggle to cope with the environmental damage wreaked by mining activity.

And then there’s the government looking increasingly uncomfortable between these groups. Mining executives suspect the government is too close to labour and labour and communities are absolutely certain that the government is operating hand-in-glove with big business.

The one thing all seem to agree on is that the government is overly willing to pander to the demands of elites. In their determination to promote the interests of these elites the government seems unconcerned about the damage that can be done to the interests of business, labour and communities.

Attending the two mining indabas in Cape Town this week brings home the divide separating big business from labour and communities.

Mining companies want a stable regulatory and labour environment as well as some tax breaks; workers and community members are wondering if there are any benefits to be had from mining activity.

“Externalising benefits and internalising costs” is a common refrain heard at the Alternative Mining Indaba. When asked if they fear the adverse impact on the economy, if mining companies are chased away by labour and environmental demands, the delegates at this indaba respond: “This is not our economy, workers are on survival wages and the environment is so degraded that even living is becoming difficult.”

Even for those who don’t follow the mining activities the implications cannot be avoided. There is probably a line connecting the grim story facing this sector and African Bank’s dismal outlook. page 18

Ringing the changes

Vodacom has raised the noise on its impending challenge of the new mobile termination rates, making it likely that its threat to take the industry regulator to task will spiral into action.

The matter of mobile termination rates is about as contentious as the issue of soured race relations, more so now that the Independent Communications Authority of SA (Icasa) has also favoured fixed-line operator Telkom in addition to juniors in the telecoms industry such as Cell C, Telkom Mobile and Huge Telecom.

If the industry were a school playground then Vodacom and MTN have been forced against a wall by a contingent of long-suffering rivals – or so they claimed in comments on the rate cuts late last year.

Icasa introduced what is known as the “glide path” in 2010 at the behest of the then minister of communications, Siphiwe Nyanda, who determined that a benchmark study showed up South Africa as a country with the highest telecoms costs aside from Asian markets and Brazil.

He ordered that termination rates be reduced from the R1.25 a minute operators charged before regulatory intervention.

The rates have declined since then and last month Icasa proposed that Vodacom and MTN will charge 20c from March 1 compared with 40c previously.

These companies will in turn pay smaller rivals 44c.

“The announced rates include an even higher degree of asymmetry than the original proposal published on October 4.

“Vodacom is supportive of a mobile termination rate glide path which should be determined in accordance with the procedures as set out in the Electronic Communications Act, which requires that the rates be cost-based. Cost-based rates are important to sustain our ongoing investment strategy,” Shameel Joosub, the Vodacom chief executive, said.

Analysts were not keen to comment on whether Vodacom’s challenge was wise.

Perhaps Icasa, once referred to as a toothless regulator, may yet bare its might.

Edited by Peter DeIonno. With contributions from Ann Crotty and Asha Speckman.


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