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The Behind-Closed-Doors Meeting That Mosebenzi Zwane Held With Black Mine Owners

The DMR hosted a closed, not secret, consultation with 60 black shareholders of mining companies to receive their comments on the Draft Mining Charter.

07/03/2017 04:57 SAST | Updated 07/03/2017 04:57 SAST
Rodger Bosch/ AFP/ Getty Images
Mosebenzi Zwane, South African Minister of Mineral Resources

On 28 February 2016, the Department of Mineral Resources (DMR) hosted a closed, not secret, consultation session with 60 black shareholders of mining companies. The purpose of the discussion was to receive their comments on the Draft Mining Charter prior to the publication of the final document by mid-March, as promised by the Minister of Mineral Resources, Mr. Mosebenzi Zwane.

The DMR, in a show of seriousness had every high level official present in the session: the minister, deputy minister, director-general and all heads of departments. The session was facilitated by a very robust deputy minister who ensured every voice was heard. This session was one of a few that the DMR will host, including meetings with the financial institutions and trade unions in an effort to reach all stakeholders who had not submitted comments within the deadline in 2016. As Lawgistics Legal Consultants, we had submitted our comments timeously, which can be found on our website and we were happy to participate to reiterate our position.

The concerns that were highlighted by the parties who attended, included the advancement of women in mining by including specific interventions in the Charter, marketing and selling of minerals to also be included in the Charter as a number of international companies market minerals through international affiliate companies in which the black partners have no ownership. The discussion also touched on the rights of the community and the possibility of a free carry interest for their participation, as well as the role of the DMR in assisting mining companies in the identification of the correct host community.

The subject of funding was discussed at length due to the onerous requirements of both banks and the development funding institutions (DFIs) on black entrepreneurs, who do not have the required collateral. The applications are either rejected, or the rate of interest charged will be so high - at 24 percent from some DFIs who are also too risk averse to come into projects at an early stage. The parties also expressed the need for a consolidated black voice in the mining sector, which was well received and supported by the DMR. A number of parties also enquired about beneficiation and the additional incentives, to which the deputy minister responded that the Department of Trade and Industry would advise of additional incentives.

Tiyani Majoko
Mineral resources minister Mosebenzi Zwane at the meeting.

The minister addressed the attendees and pleaded for a more unified mining sector, especially among the black players calling out those who are unwilling to help others as sellouts. He called 2017 "the year of action", emphasising that this Charter would promote radical transformation and there would be a few surprises included because the aim of the DMR is to the transform the sector and ensure meaningful participation for all South Africans. He also highlighted that black partners must stop fronting, immediately, which was received with applause. The minister also asked for the support of black shareholders because the Charter was a tool to empower them, so they should vocalise their support of the Charter and the DMR.

In closing the deputy minister spoke briefly about the State Owned Mining Company "SOMCO" and that they are looking to consolidate their rights, and encouraged the attendees to pursue mining opportunities outside of South Africa as their skills are highly sought after. He also assured attendees that there would be more sessions of this nature, with other additional stakeholders in order to encourage discussion and unification of the sector.