SA mines still resist change

2010-04-10 07:23

A DRAFT five-year review of transformation in the mining industry

has raised questions about the ­sector’s commitment to placing a portion of its

wealth in the hands of black South Africans.

The 29-page draft, which was leaked to City Press Business, shows

continued marginalisation of blacks in the R2 trillion industry five years after

a mining sector charter was signed to redress its skewed ownership and


The mining industry was found wanting in almost all the key

indicators of transformation such as black ownership, skills development,

employment equity, preferential procurement, mining community upliftment,

housing and living conditions and mining beneficiation.

The initial findings of the review, sanctioned by the mineral

resources department (DMR), on the low level of transformation in the mining

industry are likely to ­fuel calls by ANC Youth League president Julius Malema

to nationalise mining companies.

The report, marked “strictly confidential”, shows that 9% of the

industry was in black hands last year, some distance from the 15% target set by

the mining charter.

The industry has set a target to transfer 26% of ownership to

blacks by 2014 , a daunting task unlikely to be met in the next five years,

mainly because of the scarcity of funds in the wake of the recession. The

­authors of the review recommend that the implementation period be extended to


“It is abundantly clear to us that the pace of transformation in

the mining industry is far off the mark and that we have a very long way to go

before the industry is deracialised,” said DMR spokesperson ­Jeremy


He said government would continue to engage with business and

labour to address the matter.

So far black economic empowerment deals worth R200 billion have

been concluded.

According to the review, historically disadvantaged South Africans,

which include white women or black-owned companies, got a meagre 3% slice of the

mining industry’s total procurement pie in the five-year review period. In 2008

the industry spent R199 billion on goods and services.

The report finds that roughly 26% of mining firms have achieved the

target of 40% black representation at management level. Many companies in the

sector have 33% black representation in their upper echelons. But the review

says a large number of black managers are in middle management and only very few

are in key decision-making positions.

About 26% of mining companies have complied with the 10% women

participation target. “However, less than 1% are in core management positions,”

the ­report adds.

The report also expresses concern at the lack of investment in the

development of skills among historica­lly disadvantaged South Africans. It also

notes that the industry has not fared any better when it comes to ­uplifting

mining communities.

Mzolisi Diliza, the chief executive of the Chamber of Mines,

pleaded ­ignorance of the draft report. “I have not seen the draft report and I

don’t even know which facts have been substantiated or verified,” Diliza


Industry players did not want to comment on the record about the

contents of the report owing to its sensitivity.

An insider said the report was a good starting point to get the

industry, government and labour to look afresh at the charter.

“In some instances the low targets are a reflection of the onerous

­compliance requirements of the charter,” said the insider.

“Companies are required to prove their own efforts in improving a

mining community. This has led to many companies doing the same things instead

of pooling resources and addressing a wider variety of community needs.”

Industry, labour and the ­government met last week to discuss the

report and have committed themselves to reaching a common understanding on the

contents of the report by June.

The insider said a common understanding of what was measured and

how would help the transformation process towards the 2014 review.

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