JOHANNESBURG - Afrikaans business lobby group Sakeliga, formerly AfriBusiness, said on Monday that the 2018 edition of the draft Mining Charter would continue an economically harmful and counterproductive mining policy in South Africa.
This comes after Sakeliga last week submitted comment on the draft Mining Charter of 2018 as Friday marked the last day for the department of mineral resources to receive written submissions on a draft mining charter which was gazetted for public comment in June.
The draft charter has a requirement of 10 percent "free carry" interest for mining communities and employees on new mining rights as part of the proposed 30 percent black equity ownership target, something that the industry opposes even though it acknowledges that the current document is an improvement on the previous one.
Piet le Roux, chief executive of Sakeliga, said the Charter was likely to deter new mining investment and solidify economic inefficiency in mining at the cost of the broader economy.
"(Minister Gwede) Mantashe's Mining Charter continues the folly of an economically detrimental mining policy and will most likely be a disastrous brake on new mining investment." le Roux said.
"By proposing, among other follies, the transfer of a sizable 10 percent shareholding in new mining projects to qualifying employee and community schemes on a non-transferable free carried interest basis, government will raise the risk exposure of financial capital in mining companies. This increased risk is certain to restrict important capital investment in new mining projects."
Le Roux criticised government’s presumption, evident in the Mining Charter and other policy documents, which is to dictate how businesses should be spending their procurement rands.
In its submission, Sakeliga said economic efficiency required businesses to produce as much output of products and services as possible with minimal state interference in markets.
"Government will effectively reduce procurement competition in the mining sector at the cost of the efficiency of mining output. At worst, the draft Mining Charter will solidify rent-seeking in mining supply chains," le Roux said.
- AFRICAN NEWS AGENCY (ANA)