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Let’s use coal to power up empowerment

Published Mar 5, 2019


Mineral Resources Minister Gwede Mantashe has thrown two challenges at the mining industry.

The first is a general call to all sectors to facilitate the entry of young, black entrepreneurs. At the opening of Khanye Colliery last year, Mantashe said mining needed more black millionaires. I agreed quietly as he lectured on the importance of diversifying ownership of the economy.

Mantashe made another call, specifically to the coal mining sector, in January. He said the industry needed to respond factually to the negativity about coal. He was concerned that false pronouncements by lobby groups could become universal truths.

What can we, as an industry, do about the challenges thrown at us?

Many mining companies have focused on getting their BEE credentials right. Many are empowered. That is a huge achievement.

Some of the deals could have been structured better to yield value for empowerment players. Empowerment policies would be facing less criticism had empowerment deals been structured in a way that encouraged black people to become entrepreneurs.

Industry leaders must ensure empowerment policies are instruments for inclusive growth. Companies could give young people who have knowledge and experience in various specialities of mining, small stakes in new projects and restructured entities.

Multiplication of a few stakes could become solid portfolios in the long run. Another advantage is that it could be relatively easy and less risky to vendor-finance small stakes rather than big ones. Over time, we should see more experienced black people organically growing their shareholding.

In the coal sector, it should be easier to introduce junior black miners. For example, Eskom implemented a good procurement programme for the benefit of junior miners. Besides Eskom, there is an export avenue that could lift black junior miners.

Big companies with bigger shares at the Richards Bay Coal Terminal should grow their support to small miners to boost their export earnings. The big opportunities are when companies restructure or sell their assets.

On the second challenge regarding the negativity about coal, the sector can comply with environmental laws and make it known how it subscribes to regulatory prescripts. Regulations have to be sound enough to attract investment and create jobs.

The industry can ensure one or two cases of non-compliance do not tarnish the entire industry. We should also follow international compliance standards. It’s important that we regain public trust. What is important is to make sure the benefits of mining outweigh the negative.

When coal companies craft and implement social labour plans, consult meaningfully with communities, create jobs for communities and are good corporate citizens, it will become apparent that the coal industry is a national treasure.

Coal will remain our primary source of energy for many years. While we mine it, let it be a boon and not a cause for concern regarding wealth distribution and the environment.

* Mudogwa is a director at Sibambene Coal and Kalyana Resources. He is also an environmental management specialist.

** The views expressed here are not necessarily those of Independent Media.

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