Johannesburg – Finance Minister Malusi Gigaba wants the Chamber of Mines and the Department of Mineral Resources to settle their differences on the amended Mining Charter outside court.
Gigaba was speaking at a briefing at the JSE on Thursday about a 14-point action plan to revive the economy. Gigaba made the announcement following engagements with the president and several ministers, as well as stakeholders such as ratings agencies and investors.
The plan is meant to address concerns related to the technical recession and its impact on the fiscal framework, the financial position of state-owned enterprises, policy uncertainty and low business and consumer confidence.
Each action plan has a minister assigned to it, along with a short-term deadline. The amended Mining Charter is an action item and Mining Minister Mosebenzi Zwane is responsible for finalising the bill in a way that reflects inputs of civil society, labour and industry through public consultation. His deadline is December 2017.
Industry players criticised Zwane for not engaging with relevant stakeholders on the transformation targets listed in the charter. Mining companies have to adhere to a 30% black ownership target. The charter was gazetted in June 2017 and the Chamber of Mines, which represents 90% of the industry applied to have its implementation interdicted.
The ANC still has not endorsed the charter and the matter will be revisited. Deputy President Cyril Ramaphosa called for renewed discussions on the matter.
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Gigaba raised concerns that the litigation process could delay the implementation of the non-controversial or undisputed parts of the charter.
“The parties should engage to find one another. Restoring confidence in the mining sector is important for us,” he said. Zwane also indicated that he is open to engagement on the issues raised, said Gigaba.
The mining sector has been a significant contributor to economic growth. “I would be keen that parties involved in the Mining Charter dispute find one another to resolve the issues outside court so that they do not have a prolonged impact on investor confidence in the mining sector.”
Mining and agriculture are equally important to growing the economy. Government is taking further steps such as engagements with the CEO Initiative and focusing on areas like tourism to achieve a rebound in economic growth.
The latest mining production figures released by Statistics South Africa for May indicate a 3.6% year-on-year increase.
Investec economist Kamilla Kaplan said that increased global growth and the uptick in commodity prices could support mining production. “In the year to date to May, mining production increased by 5.2% year-on-year compared to the decline of 4.9% year-on-year in 2016.”
But Kaplan noted that improved economic activity has not translated into investment. “High operating costs as well as continued regulatory and policy uncertainty remain a constraint on the performance of the sector,” she said.
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