South Africa needs a dedicated agency to award mining licences and monitor implementation of transformation in the mining sector, KIO Advisory Services and black-economic empowerment analyst Duma Gqubule said on Tuesday.
Gqubule, who was speaking at the Mining for Change conference in Sandton, said the mining industry could not continue to do things the same way and expect different results.
Research conducted by KIO on behalf of South African Mining Development Association indicated that black representation in mine ownership among the leading 25 JSE-listed mining companies has shown that less than 5 percent is actually in black hands.
Comparing the Broad-Based Black Economic Empowerment Codes of Good Practice with the Mining Charter and the Mining Declaration, the joint stakeholders' declaration on the mining industry strategy for sustainable growth and meaningful transformation released in June this year, Gqubule said that the mining-dedicated transformation documents carried just four numerical targets.
"The weakness of the charter is vagueness and the absence of numeric targets," Gqubule said, adding that there was also a lack of a rigorous measurement system to gauge progress.
This failure to develop a robust system to monitor implementation and the inability to measure and value attributable to black shareholders could be part of the reasons the Mining Charter has not midway through its life achieved the transformation targets set out by the sector in 2004.
The Mining Charter set a target of 15 percent black ownership by 2009, and 26 percent by 2014 but an interim review in 2009 showed that targets were not being met and in fact fell way short of the government's expectations.
Gqubule said part of the problem was that many mining companies felt that signing a black economic empowerment deal was the conclusion of the deal when it was just the beginning.
He said the problems did not lie in the structuring of the deals but the need for a broader macroeconomic policy.
"If we are really serious about transformation we need to get our economy working properly and then put monitoring systems in place to ensure delivery," said Gqubule, who advocates state involvement in the mining industry.
"We shouldn't be debating whether to have state ownership but how to have state ownership," said Gqubule.
He said case studies provide unambiguous evidence that state ownership substantially increases government intake or rents.
"Income from state ownership is higher than taxes from the industry," Gqubule said. - I-Net Bridge