South Africa’s mining industry would go a long way in addressing many of the issues it faces if the relevant communities were treated as important partners by mines and accorded tangible benefits from the mines' business operations.

Lucas Moalusi, director in mining and advising also traditional communities at legal firm Bell Dewar, says while some mining communities have been given a nominal stake in the mining operations, the business operations in question are not structured in a way that adequately benefit the communities.
Moalusi maintains that one of the keys to creating mining industry labour harmony is dialogue and meaningful business partnerships with local communities.

“If the commercial arm of the community is formalised and is functioning, this will make it easier for mining houses to have commercial inter-action with the community.”

He cites the Royal Bafokeng Nation as an example of best practice following a strategyto create a business arm in the form of a company, Royal Bafokeng Holdings (Pty)Ltd (RBH) that, either directly or through other legal entities,  owns shares in mining companies. The shareholder in RBH is a trust (Royal Bafokeng Nation Development Trust) that is run by a board of trustees, some  of whom are independent. The trust is chaired by the Kgosi Leruo Molotlegi. RBH is responsible for the commercial activities of the community.

The other Bafokeng entities include Royal Bafokeng Administration and Royal Bafokeng Institute. They are each responsible for administration affairs of the community, social and health services and education respectively.

In terms of the arrangement, the Bafokeng is currently the single largest shareholder in Implats and, through subsidiaries of RBH has stakes in industrial and financial concerns.

Moalusi recommends that the community around a mine should act as the anchor for empowerment transactions involving mining houses instead of outsiders being used as majority partners in BEE transactions – as is often the case with other mining companies. 

Reflecting on his experience in advising traditional communities involved in mining transactions, Moalusi has found that the percentage provided to the community is no more than nominal.
“Indeed, it is often ineffective, because it is too small to effectively involve the community in the company’s operations.”

Moalusi cautions that creating a commercial entity for the communities to manage their stakes in the mines is by no means a silver bullet for solving all the problems on the mines.

“But it will go a long way to effectively managing the commercial affairs of both parties at a professional level.”

Fasken Martineau, a leading international business law and litigation firm, recently merged with Johannesbug-based law firm Bell Dewar