The intervention by Pres. Cyril Ramaphosa into the Mining Charter debacle as well as yesterday’s cabinet reshuffle could not have come at a more opportune time.

Gwede Mantashe’s appointment as Minister of Mineral Resources comes at a time when the mining sector does not look particularly promising, and it is therefore critical that the industry transform in the correct manner. UASA’s definition of transformation is that all things possible should be done to optimise shareholder value and keep operators in the industry economically sustainable and financially viable on the one hand, while at the same time socially corrective measures must be implemented on an inclusive basis.

It will be of critical importance that Mantashe involve all stakeholders in the process of carving out a future for the mining industry through the new Mining Charter, and allow them to participate with open minds with a view to strike a balance that will benefit the country and all who live in it.

The challenges facing the mining industry are manifold and include, inter alia, the ongoing decrease in production that started early in 2017. UASA’s experience is that severe cuts in expenditure and human capital are being made by numerous mining houses.  Economist Annabel Bishop recently told Bizcommunity the decline also has a knock-on effect on other sectors and industries. “The effects of the low commodity price environment are compounded by the continued rise in operating cost,” she said. “These include above-inflation increases in labour and electricity costs.”

The precarious state of the industry and the necessity that all stakeholders be involved in crafting a new Mining Charter mean that the charter will have to be developed and resolved through negotiation, with representation by a broad range of stakeholders – government, business, labour and communities.

UASA believes Mantashe is the right person at the right time. His trade union background, being a seasoned negotiator and, to top it all off, a politician make him the ideal person to champion this critically important process. 

UASA is anxiously awaiting the start of these negotiations and can clearly recall the Bosberaad where the previous charter was adopted on 19 September, 2014. Perhaps Mantashe might consider a similar strategy?

 

Issued by UASA