Bodies back mining bill
SA Chamber of Mines and Black Business Council rally behind amendments to legislation
Despite widespread media criticism of the proposed amendments to the country’s mining legislation, the intended law the has support of at least two influential business formations.
The SA Chamber of Mines has said it was “broadly” in support of 36 proposed amendments to the Mineral and Petroleum Resources Development Act, but stressed it wanted to work closely with government to eliminate unintended consequences that may put investors off.
The Black Business Council (BBC), the mouthpiece of black business in South Africa, has also expressed support for the mooted changes, provided blacks, workers and poor communities were given a bigger slice of mining concessions and the procurement pie.
The proposed amendments to the act are aimed at boosting beneficiation of the country’s minerals, protecting the environment and ensuring security of coal supply to power supplier Eskom, which is spending billions of rands to build new power stations.
Anton van Achterbergh, head of legal services at the SA Chamber of Mines, said the organisation would hold discussions with the department of mineral resources, which drafted the bill, to iron out potential unintended outcomes of the proposed legislation.
“We are broadly in support of what the bill is trying to achieve. However, we need to engage the department of mineral resources on how they want to achieve these goals because the current proposals could have unintended consequences and may not be the best way of achieving the broad aims of the bill,” he told City Press.
One of the aspects of the legislation that has drawn fire from mining analysts is the requirement to get written permission from Mineral Resources Minister Susan Shabangu if a company wanted to buy a majority stake in another company.
There is fear that this may give the minister unlimited, discretional powers that may derail potential investment. There is also unhappiness about the proposed clause in the legislation that deals with listed companies having to declare their intent to buy shares in a mining company which has a licence from the department of mineral resources. This clause is seen by the analysts and mining law experts as impractical and possibly contravening the laws of the JSE.
One observer told City Press that the clause, if passed with the legislation, may limit the trading of shares in mining companies.
But the BBC wants the state to press ahead with its plans to promote beneficiation in the mining sector as this would result in the further industrialisation of South Africa instead of raw minerals being exported offshore and returned as high-value imports.
Due to the strong rand and the influx of cheap Chinese imports, South Africa has experienced a significant deindustrialisation and massive job losses.
Xolani Qubeka, the chief executive of the BBC, said he welcomed the amendments as long as they led to the creation of black industrialists, and the upliftment of workers and poor communities where mining took place.
“Entrepreneurs who mine are wealthy, but in communities where mining takes place there is high unemployment, and the majority of people are poor and depressed,” he said.
He called on the government to put limitations on foreign ownership of mining rights in favour of locals, particularly black investors, workers and communities.
“There must be meaningful local ownership and the beneficiation should be linked to the Black Economic Empowerment Act. We believe that about 50% of mining rights should be locally owned,” Qubeka said.
He also said that 50% of procurement spending in the mining sector must be targeted at South African firms unlike the current situation where more than 70% went to foreign companies.