Mining revenues ‘end up funding large rural estates for presidents’ – Ramphele

Academic Mamphela Ramphele told a mining conference to “just wait patiently” when asked whether she was to launch a new political party, following a speech during which she put forward her criticisms of South Africa’s mineral dispensation.

Her remarks on the new party were a response made in jest to a question from a delegate at the annual Mining Indaba in Cape Town, but she nevertheless used the opportunity to launch a thinly veiled attack on the track record of the ruling ANC.

Deploring the fact that the majority of the world’s citizens tend not to benefit from their countries’ mineral resources, Ramphele – who is chairperson for mining group Gold Fields – said taxes from mining revenues “vanish in the black hole that is the central fiscus and end up funding large rural estates for presidents”.

Ramphele said South Africa was increasingly showing signs of suffering from the so-called resource curse where political elites were seen to be the sole beneficiaries of a non-transparent licensing arrangement with established mining firms.

“Extractive industry approaches are often inextricably linked to extractive political systems driven by patronage networks that take home the greatest spoils,” Ramphele said.

“In such circumstances higher royalties and taxes do not necessarily benefit ordinary citizens who continue to live in grinding poverty.”

Ramphele said the outcome of black economic empowerment transactions have demonstrated how new black elites have been seduced to become part of an existing closed patronage system.

“Very few BEE deals have really achieved what they set out to do – namely empower the many and not the few,” Ramphele said.

“If we could go back to the drawing board I would make employees the largest beneficiaries together with neighbouring communities as well as communities in labour-sending areas that provide the mines with their manpower.”

She said the events in Marikana and protests by agricultural sector workers of the fruit and wine farms in De Doorns, in the Western Cape, were a wake-up call alerting South Africans to the many time bombs waiting to explode.

She said mining houses as well as the government have to accept responsibility for addressing the negative legacies of the industry, including silicosis, HIV/AIDS, acid mine drainage as well as dusty and uranium-contaminated environments.

“Government must provide incentives for the mining industry to invest in clean-up operations which would also provide alternative livelihoods and jobs for ex-mine workers and local communities,” she said.

“Investors would also have to refocus their mindsets away from the short-termism that has driven the extractive industry mode.”

She said change was possible, but it would take a willingness to take risks and engage in tough conversations between the government, private sector, workers and civil society.

“It is possible to leverage the mineral resource wealth into a catalyst for re-industrialisation of our country, continent and other parts of the world,” Ramphele said. “But we must heed Einstein’s words – we cannot solve today’s problems by using the same thinking that created them in the first instance.”

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