Quo vadis mining sector

The mining sector and South Africa as a nation cannot afford to linger for another moment in the present state of uncertainty regarding ownership of mines, mining titles and security of tenure. What we need is a National Convention on the Mining Sector with participation from Government, the mining sector, business leadership, trade unions and political parties.

Our leaders must give leadership: the antithesis of personal attack on those with whom they differ, one line rhetorical responses, heads in the sand denials, reactive amendments to legislation, accusations of corruption and counter accusations of racism.

The ANC Youth League recently published a discussion document Towards the Transfer of Mineral Wealth to the Ownership of the People as a Whole: a perspective on nationalisation of mines.

Cosatu entered the discussion with a position paper Towards the Nationalisation of Mines and Monopoly Industry. Their position is similar to that of the ANCYL except to the extent that, in their view, nationalisation of mines on its own will not be enough to achieve economic transformation in South Africa.

Cosatu argues that there is an inextricable link between mineral wealth and monopoly industry. To achieve economic transformation nationalisation would have to be implemented in conjunction with the dismantling of monopoly domination.

These positions elicited a strong condemnation from economists, business leaders and the mining sector. The Government too was quick in its response. Mineral Resources Minister Susan Shabangu dismissively stated that nationalisation was not an option.

The ANC's secretary-general Gwede Mantashe did not hesitate in making it known that the party's position was the same as Government's. In July this year he told Reuters that nationalising mineral assets was not on the party agenda. As support for this position he referred to resolutions agreed at the ANC's Polokwane national conference in 2007, which did not call for nationalisation of mines, and reiterated that the position of the ANC has not changed.

Enoch Godongwane, deputy chairman of the ANC sub-committee on economic transformation was more restrained in his response. On 11 August he said that nationalisation of mines was not necessarily an answer but that there were areas of concern in the mining industry.

Other issues

Concurrent with this non-engagement between Cosatu and the ANCYL on the one hand and the ANC and Government on the other, the mining sector, business leaders and Government are grappling with other, although not unrelated, issues of critical importance to the mining sector and the economy of South Africa, namely the issuing of prospecting rights by the Department of Mineral Resources and the Government's handling of mining titles.

Business Leadership SA chairman Bobby Godsell has warned that the harm caused by the handling of mineral titles goes beyond the mining sector and could undermine South Africa's reputation among investors.

Fuelling this extraordinary open criticism of Government by business leaders who traditionally show restraint in publicly criticising Government, is the controversial granting of prospecting rights over part of Kumba Iron Ore's Sishen mine to BBBEE company Imperial Crown Trading 289 whose shareholders are said to have political connections.

Against allegations of corruption in the department, the Minister of Mineral Resources Susan Shabangu, in rejecting Kumba's appeal, has voiced her satisfaction that the decision taken by her officials in the department was the correct one, based on the law as it stands. Mindful that this decision and others are raising concern both in South Africa and internationally about security of tenure the Minister has promised urgent steps to amend the Mineral and Petroleum Resources Act to remove ambiguities that give rise to these concerns.

Controversially she has undertaken to declare a six-month moratorium on receiving new applications for prospecting rights pending amendments to the Act. Whether in law she is entitled to do that remains to be seen.

Economic transformation the link

Although these two controversial public spats in the mining sector, nationalisation and mining titles, are not engaging one another and appear to be unconnected, they are not. Both have as their source Government's policy on economic transformation.

There can be no doubt that Government policy on Broad-Based Black Economic Empowerment in the mining sector one aspect of its alternative and preferred policy to nationalisation of mines has contributed towards the damaging uncertainties regarding mining titles and security of tenure.

Besides there being no meaningful engagement between these two separate discourses, the quality of engagement within them is dire.

The Government and the ANC have, by and large, ignored the discussion papers tabled by the ANCYL and Cosatu on nationalisation, simply reiterating Government policy. The response from the mining sector and business leaders seems to be one of denial – let's hope this thing goes away.

The comments by Dr Kelvin Kemm, a respected business strategy consultant, as published in Engineering News on 30 July is an accurate reflection of this thinking. He said: "It is not that I think nationalisation will occur – not at all. In fact Mineral Resources Minister Susan Shabangu has said that nationalisation is not an option. I believe her sincerity. She is a person of determination and courage and has brains".

Whether this assessment is right or wrong is not the point. The issue of nationalisation of mines in South Africa is not going to go away because the current Minister says so and because she is sincere and has brains, or because those who have a different view, by implication, do not have brains. It will require much more than that.

The approach of the ANCYL is also not helpful. Without in any way wanting to denigrate the Freedom Charter, a remarkable and inspirational document for its time, the answer to the question about nationalisation should not be based on either Julius Malema's black letter interpretation of the Freedom Charter or Joel Netshitenzhe's so-called (by the ANCYL) "watered-down Freedom Charter Lite without class content" interpretation.

Issues raised are real

Leaving aside the arguments in favour of nationalisation based on the Freedom Charter, the ANCYL in their discussion document raise issues and concerns which are real and need to be addressed.

No-one can argue with the principle that the wealth of South Africa should benefit all who live in it and that the South African economy has to be transformed in a way that it is able to effectively address the housing backlog, deliver quality education, health care, safety and security and create employment.

Whether one agrees with their position or not, credit must go to Cosatu for entering the discussion, as they are often inclined to do, in a thoughtful and constructive manner, supporting nationalisation of mines but highlighting the issue of monopolies.

Where to from here? The issue of nationalisation of mines is on the agenda for the ANC's 2012 national conference. Beside the fact that this issue and mining titles deserve and demand a much broader input than just one political party, albeit the governing party, the mining sector and South Africa as a nation cannot afford to linger for another moment in this state of uncertainty regarding ownership of mines, mining titles and security of tenure.

Our leaders must give leadership: the antithesis of personal attack on those with whom they differ, one-line rhetorical responses, heads in the sand denials, reactive amendments to legislation, accusations of corruption and counter accusations of racism..

In the early 1990's South Africans from diverse cultural, ideological, political, ethnic and religious backgrounds sat down together and through hard work and great leadership jointly agreed upon a political and constitutional model that gave birth to our new democracy. As a result all South Africans today enjoy civil and political rights.

However, the same cannot be said regarding socio-economic rights. History tells us that sustained unemployment, marginalisation, poverty and homelessness will eventually result in civil and human rights violations as protests and mass action threaten law and order. We already see evidence of this.

Like CODESA a national convention on the mining sector should be an open, honest, transparent and inclusive engagement. The agenda should be discussed and agreed by all stakeholders. There should be no predetermined outcome. The objective should be an agreement on a model that will deliver a stronger and durable mining sector empowered to take its rightful place in ensuring that the wealth of South Africa benefits all who live in it.

(Article written by Brian Currin of Dewey & LeBoeuf, Specialist in Conflict Resolution and Transformation. Edited by Piet Coetzer)