JOHANNESBURG (miningweekly.com) – Reality would get in the way of the implementation of most of the proposals for the South African mining industry made in the State Intervention in the Minerals Sector (Sims) document, Business Leadership South Africa VP Michael Spicer said on Wednesday.

Spicer told the National Policy Crossroads conference organised by the FW De Klerk Foundation that it was unlikely that the country would see the implementation of many of the Sims proposals, “if any at all”.

That was because of the importance to the South African economy of mining industry growth and the preconditions for that growth becoming clearer as the industry's engagement with government proceeded.

“That, of course, does require the robust involvement of the industry and the robust involvement of the rest of civil society and a public education, because many of the facts and figures of mining's contribution simply aren't understood, even by the people who should know better, like business people who are not associated with the mining industry,” Spicer said.

It was incumbent on the mining sector, as well as business as a whole, to lobby and communicate better.

Rather than clarifying matters, last month’s national policy conference of the ruling African National Congress (ANC) in Midrand had confused matters further.

Spicer noted that part of the difficulty of debating economic policy options in South Africa was the need to deal with two fundamentally different belief systems.

On the one hand were those who believed that economic growth was of paramount necessity in the elimination of inequality and poverty and on the other were those who believed that poverty and inequality should be eliminated through the redistribution of wealth, with little heed paid to the need for growth.

Against that background, it was particularly incumbent on the mining industry to speak to the aspirations of all South Africans in explaining mining’s existing developmental contribution to society and how that could be best expanded.

Both the politicians and the business community had mismanaged the so-called mine nationalisation debate, which in reality was often the uttering of loose populist slogans.

That resulted in ANC commissioning the Sims document, which accused the private-sector-led mining industry of failing to capture and retain the maximum value of South Africa’s large minerals endowment and also of failing to pay enough tax in good years.

While Sims rejected wholesale nationalisation of mines, it advocated greater State intervention, including increased taxation, export duties on raw strategic mineral exports to incentivise miners to beneficiate locally and the mandatory delivery of strategic minerals by private mining companies to the domestic economy at whatever quantity was required and at prices to be capped by regulation.

Sims also recommended the introduction of mandatory local-content requirements on mining inputs and supplies and the expansion of the State mining company to develop strategic mineral deposits.

Spicer criticised Sims’ lack of focus on mining-industry growth and its redistributionist approach of using mining as a lever for the development of other parts of the South African economy, even if that had to be compelled by way of regulation.

While it was abundantly clear that mining could do more for society, Sims ignored the many areas where agreement had already been reached for more value add.

The positive aspect of Sims was that it acknowledged mining as a sunrise industry that was an important driver of the South African economy.