Johannesburg - President Jacob Zuma’s appointment of a new mineral resources minister unfamiliar to the sector but known for his views on black empowerment adds uncertainty to prospects for ending a crippling four-month-old platinum strike that is hurting growth.
The stoppage at Anglo American Platinum, Impala Platinum and Lonmin is already the longest in the country’s history and has damaged the economy.
It is also showing signs of descending into violence. Five miners have been killed in the past two weeks as some seeking to return to work face strike pickets. The latest round of wage negotiations to try to end the dispute, mediated by a Labour Court judge, has made little headway.
This will mean a baptism of fire for Mineral Resources Minister Ngoako Ramatlhodi, who was named as part of Zuma’s new-look cabinet on Sunday.
By contrast, the promotion to finance minister of Nhlanhla Nene, who takes over from Pravin Gordhan, was taken as a sign of continuity in the shuffle, which follows the ANC’s re-election on May 7.
The president says that the priority of his second five-year term will be to advance the National Development Plan – generally viewed as business friendly – to create jobs and boost growth. As he announced his new cabinet, Zuma stressed the need to breathe new life into the flagging economy.
The mining industry, already hurting from the platinum strike and facing expected job cuts and restructuring, may find a tough government interlocutor in Ramatlhodi. He has a reputation as an often gruff African nationalist who believes the economy remains too heavily concentrated in white hands.
“Ramatlhodi is someone who will put the mining industry’s feet to the fire in terms of black economic empowerment and the mining charter,” said Richard Calland, a political commentator and associate professor in the public law department at UCT.
Mining companies have been scrambling for years to meet the targets set out in the mining charter, including one that calls for 26 percent black ownership by this year.
“He will be a more robust minister than his predecessor and the mining companies will have to prepare for some quite tough negotiations with him,” Calland said.
Outgoing mineral resources minister Susan Shabangu, who opposed calls to nationalise the industry, was seen in boardrooms as someone who tried to balance the ruling party’s political agenda to redistribute ownership with the need for companies to make a profit.
“Everyone will be holding their breath for the next month,” Peter Major, a fund manager at Cadiz Corporate Solutions, said. “An unknown is never a plus, especially coming into a high-profile ministry that generates more than half of our foreign exchange and with the longest, costliest and messiest strike we have ever had on our hands.”
In contrast, investors have appeared more reassured by the promotion of the affable Nene from deputy finance minister to the top Treasury post, seeing him as a steady pair of hands who will maintain the economic strategy followed by Gordhan.
But some commentators question whether Nene has the same political clout within the ANC as Gordhan to be able to demand discipline from other government ministries and so rein in their spending and the budget deficit. – Reuters