BOKAMOSO | DA’s approach to mining empowerment will focus on jobs, growth, mineworkers and mining communities

South Africa has the richest endowment of minerals of any country in the world. Our mining industry could and should be playing a major role in uplifting the lives of poor South Africans and redressing past injustices.

Instead, the mining sector is in retreat, floundering under the weight of ill considered, incoherent policy, much of it designed specifically to facilitate crony empowerment.

The forced takeover of Optimum Coal Mine by Gupta-owned Tegeta is a classic example of how current empowerment policy enables corruption. Glencore-owned Optimum became devalued to near bankruptcy after Eskom refused to buy its coal because it wasn’t 50%-plus-1 black-owned. This enabled Gupta-and-Zuma-owned Tegeta Resources to buy Optimum at a massive discount, with unprecedented “pre-paid” financial help from Eskom to make the deal happen. 

The new Mining Charter seeks to further institutionalise such opportunities for crony empowerment through more stringent preferential procurement and prospecting regulations. Inevitably, mining jobs are being lost and mining investment is drying up. The sector’s contribution to tax revenue is in decline. Poor, black South Africans are being disempowered.

A DA national government would move swiftly to arrest this situation and turn it around, so that mining can once again play its rightful part in fighting poverty, unemployment and inequality. Our approach can be summed up as focusing on both broad-based earning and broad-based owning.

The DA believes the greatest contribution mines can make to the country is in employing the greatest number of poor South Africans possible. Without doubt, job creation is the single best way of putting wealth in the hands of as many black South Africans as possible. This requires a policy approach aimed at rapidly growing the mining industry.

Of course, the other consequence of rapid growth would be greater tax revenue, to be spent progressively on improving the lives of and opening up opportunities to poor, black South Africans.

But broad-based earning is not enough. We also need broad-based owning. The single-biggest focus of mining empowerment policy should be on transferring mining shares to mineworkers. A DA national government would incentivise mining companies to turn mineworkers into shareholders and partners.

And we would ensure that surrounding communities benefit from mines, either through contributions paid to an independent development trust or through shareholdings transferred to mine communities.

We reject the forced transfer of ownership to a small elite group of connected cronies, in the name of empowerment. This will only serve to reduce mining investment, reduce the number of mines, reduce the number of mining jobs, reduce the tax revenue from mining, reduce the number of mineworker shareholders, and reduce the potential benefits to mining communities.

We also reject outright the idea of a state mining company. As the Gupta-captured ANC has amply shown, state-owned companies tend very quickly to become mired in a toxic sludge of corruption, inefficiency, incapacity and skewed incentives.

As for the foolish notion of nationalising the mining industry, that lunacy would quickly suck South Africa into failed state status, shedding jobs, tax revenue and hope faster than one can say: “Venezuela”.

The DA knows and has what it takes to achieve true broad-based black empowerment, with wealth creation that benefits everyone. And we intend to start putting our policies into action in 2019.

Mmusi Maimane
DA Leader

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