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Mantashe’s changes to mining legislation have provoked backlash for favouring the industry over public interest.
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Minerals and Petroleum Resources Minister Gwede Mantashe was lashed for omitting a requirement for Black Economic Empowerment (B-BBEE) participation in applications for prospecting rights.
Mantashe recently gazetted two corrections to the Draft Mineral Resources Development Bill and also nullified a provision for ministerial approval for change of control in listed companies that own mining rights.
Mining expert David van Wyk asked why the minister backed down.
Environmental concerns
“The prospecting companies make huge profits after prospecting reports are out. They sell the prospecting reports to the highest bidder.
“We have a serious problem with the change of control in listed companies. It is what ultimately allows mining companies to walk away from their environmental responsibilities and their responsibility to close and rehabilitate mines,” said Van Wyk.
“This is why we have more than 6 000 abandoned mines. When control of companies changes and the minister, as the custodian of the minerals which, according to the Act, belongs to the public, is not informed of these changes, he is unable to assign responsibility to the owners as he will not know who they are.”
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Call for state-led mining and revenue transparency
The solution to the problems of environmental and social responsibility, as well as mine closure and rehabilitation, was to establish public ownership not just of the minerals in the ground, but also of the mining process and the extracted minerals, with the state as the custodian and the revenue accruing in a sovereign fund, Van Wyk said.
South Africa does have a stateowned mining company and a sovereign fund, but the share of that company in the overall mining sector is minimal.
There was no account of how much money has accrued in the sovereign fund since its inception, Van Wyk said. Christopher Rutledge, director at the Mining Affected Communities in Action, said the organisation was concerned.
‘Pressure of elite interests’
“Following a mere signal of dissatisfaction from the mining sector, Mantashe swiftly amended the draft of the Bill, specifically the removal of the requirement for B-BBEE participation in prospecting rights and the omission of provisions for ministerial oversight of changes in control of listed companies holding rights.
“As we have previously warned, the main purpose of the Amendment Bill represents a further retreat from the constitutional mandate of transformation, accountability and justice for mining-affected communities.
“Rather than correcting the draft Bill, the minister has capitulated even further to the pressure of elite interests, in particular the Minerals Council South Africa, confirming the extent to which the state has aligned itself with industry over people.”
Rutledge said the removal of BEE from the prospecting regime was not a technical correction, but a political decision to sell-out transformation.
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Prospecting was the gateway to mining and excluding it from transformation requirements ensures the ownership and control of mineral resources remains concentrated in the hands of historical beneficiaries of apartheid-era privilege, he said.
“This opens the door to unchecked mergers, takeovers and asset stripping with no regard for affected communities, workers, or environmental responsibilities. We reject the illusion that deregulation is a form of reform,” Rutledge said.
Industry engagements
Union federation Cosatu spokesperson Mathews Parks said it was critical that legislation is in sync with B-BBEE to avoid contradictions.
“Cosatu will engage with the minister to get a better understanding of the objectives of the amendments.”
Minerals Council South Africa Allan Seccombe said the organisation would continue to review the Bill and submit its perspectives by 13 August.
“The Bill in its current form does not encourage or sustain the growth and investment that the mining industry needs.”
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