JOHANNESBURG (miningweekly.com) – The latest draft of the third Mining Charter is not perfect, but it is better than the “disaster” it is replacing, Business Leadership South Africa CEO Bonang Mohale told attendees at the African Mining Network event on Thursday evening.
He explained that the previous draft, which was unilaterally drafted and published by then Mineral Resources Minster Mosebenzi Zwane, had resulted in the loss of 62 000 jobs.
Further, while the latest draft published for comment by Minster Gwede Mantashe retains some of the contentious elements of the previous draft, namely, the minimum 30% black economic empowerment shareholding, and a free-carried interest in new mining rights, the Department of Mineral Resources had made several concessions, and remains open to further engagement.
He noted that the 10% free-carried interest requirement should not be a major hurdle. He pointed to multinational petrochemicals company Shell, which operates in 114 countries, and in 11 of those countries there is a free-carried requirement, implying that, while burdensome, a free-carried interest requirement will not cripple companies.
Mohale noted that there has been significant improvements from the proposed amendment to the Mineral and Petroleum Resource Development Act which set out a 20% free-carried stake, with government retaining the right to increase the stake to 30% at market rate.
“Then that changed to 20% free-carry, with government retaining the right to increase its stake, ‘at an agreed price’, which means a discounted price.”
When compared with previous propositions, a 10% total free-carried interest does not seem as onerous.
He further noted that the free-carried interest should not be a concern, because the country’s mineral wealth is meant to uplift its citizens and “contribute to a material improvement in the condition and quality of life.”
“Africa is not a poor continent, it is just poorly managed,” he stressed, adding that the continental gross domestic product is about $1.7-trillion a year.
He pointed out that the quality of political leadership and its propensity for serving narrow and short-sighted interests, is the continent’s biggest hindrance.
He noted that, given the human and natural resources the continent has, socioeconomic development should have progressed a lot further than it has. “There is nothing inherently wrong with Africans; we should be able to pull the bottom half of our population into the middle class [but] our leaders are thieves.”
Mohale called for business to continue to be engaged in policy-making, and to be active participants in civil society. “The business of business cannot be restricted to just business anymore,” he said, noting that private sector leadership should actively work to address issues of gender inequality and economic transformation, while also participating in “State-building.”
Mohale explained that where nation-building is about reconciliation, State-building is about public administration and that business, including mining, has to assist government in ensuring that the country, its provinces and municipalities, function effectively.