Johannesburg – Corruption and the failure to comply with regulation plagues the mining sector, former finance minister Trevor Manuel said on Wednesday at the Joburg Indaba held in Sandton.
Discussing what can be done to ensure the sustainability of the mining sector, Manuel highlighted the challenges that threatened this.
“If we do not have this conversation we will shoot future generations in the foot,” said Manuel. He was referring to infrastructural challenges, environmental depletion caused by mining operations, corruption in the sector and regulatory uncertainties.
The landscape of the mining industry is different from that of other sectors, which requires different things to be done to deal with challenges in the industry. Water licensing was one of the issues he raised. “There are ongoing environmental issues long after mines have closed,” he said.
This stems from corruption in the sector in that operational permits are granted without the issuance of water licences. “What I hear is that sometimes people do not get through the door unless they have paid.”
He made reference to the phosphate mine in the south of Langebaan which was granted a permit, despite the presence of an ecosystem in the area. “How was a permit to operate granted when no water licence agreement had been in place?” he asked. “We need to clean up our act, we cannot deal with the absence of policy.”
Enriching the few at the cost of many livelihoods
There is a need for legal procedures and negotiations for the enforceability of contracts, he said. The sector requires capital to be committed for long periods and this is impossible to do in an environment when there is uncertainty.
If there is no regulation, then there will be no mining industry in the future. “We can’t conduct ourselves this way, enriching the few while destroying the livelihoods of many.”
Manuel added that mining is at the heart of the economy and will remain there for the future. However, there have been changes on the employment front. Furthermore, tax revenue from mines has decreased to only 2% of the state’s total tax.
Foreign direct investment in mining has fallen by $0.2bn to $12.1bn - less than FDI in Brazil, Asia and China. “We have slipped from being the number one producer to number seven [in the world].”
“There is too little energy from all players,” he said. It is necessary to establish more certainty and that can be done through the finalisation of the mining charter.
“There are too many voices of discord.” Manuel added that there should be harmony between government and business and other stakeholders. He added that issues should be dealt with and no longer ignored.