AMN - Chamber concerns over revised industry charter - comment by Yolanda Torrisi

In a report published by Reuters News, South Africa's Chamber of Mines has expressed concerns about a revised draft for a new mining charter which seeks to establish a new regulatory agency and impose social development targets on the industry based on revenues.

Reuters’ article said: Originally launched in 2002 to redress racial imbalances that still define the economy two decades after apartheid's demise, the charter was revised in 2010 and the government has signaled its intention to redraw the targets again.

Industry concerns this time round include the fact that the chamber was only invited on two occasions to consult on the latest draft, while in the past, companies, the government and labour negotiated the terms of the charter.

The chamber, which groups several mining companies in Africa's most industrialised country, said in a statement that in its current form, the draft was ill-considered and would have “dire consequences for the mining industry and the entire South African economy.”

The Department of Mineral Resources has not yet published the draft but some of the details were presented to parliament last week.

Among the current targets stated in the charter include 26 per cent black ownership as well as commitments to provide housing and other amenities in mining communities, many of which are mired in poverty and neglect.

The chamber has expressed concern about revenue-based targets possibly being used for community development programs instead of basing such initiatives on profit and what the companies could reasonably afford.

The chamber says it has proposed that 2 per cent of net profit to be used for community development and wants the government to use the existing royalties for that purpose.

It has expressed concern about the purpose and running costs of the proposed Mining Transformation and Development Agency, which it says is contained in the new draft.

South Africa has had to contend with significant unrest on many fronts recently within its mining industry. It is the world's top platinum producer and its mining industry has been battered by depressed prices, rising costs, policy uncertainty and periodic bouts of often violent labour unrest.

-Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com