Faced with accommodating the violently opposed views of the mining industry and the labour movement, Parliament’s minerals and energy committee must pass the controversial Mineral and Petroleum Resources Development Bill within a week.
In evidence before the committee this week the Congress of South African Trade Unions (Cosatu) called for the break-up of mining monopolies. At the same time mining companies warned of large-scale investor flight if the Bill went through in its current form.
Industry’s worries focus on limiting mining rights to 30 years at a time; the non-transferability of rights; and the need to reapply for existing rights.
Committee chairperson Mbulelo Goniwe said: “An investor-friendly atmosphere is very important, but not at the expense of people and the environment”.
The Bill, already substantially amended since its first publication in December 2000, is due for debate in the National Assembly on June 25.
Under pressure, Goniwe and his National Council of Provinces co-chairperson Mohseen Moosa on Monday appealed for rational debate: “A good law cannot be seen to represent a select few; rather, it must be properly representative, using our Constitution as our moral and legal basis”.
Organised labour has slammed industry’s demand for tenure security as wanting to maintain the status quo in which South Africa’s mineral riches are in the hands of a few families.
“The mining industry is not an industry about rocks and dollars. The mining industry is about people,” said National Union of Mineworkers (NUM) general secretary Gwede Mantashe.
Sweeping change was necessary to end what he described as the “Irish coffee workforce [referring to the dominance of white managers] … with a sprinkling of chocolate on top”.
Cosatu and the NUM demanded a role for the state over and above regulation, in the interests of black economic empowerment and miners.
The Bill vests mineral rights with the state for the first time in 130 years. By shaking up ownership of mining and prospecting rights, it seeks to promote black mining.
It sees 30-year non-transferable mining rights being granted by the minister. Rights may be renewed for a maximum of 30 years, again on application.
If the minister refuses an application, reasons must be given within 30 days, opening up an appeal process.
Raising the spectre of investors turning their backs on South Africa, conglomerates like De Beers, Anglo American and Rio Tinto were adamant that mining rights must cover a mine’s lifespan. They also object to the ban on ceding rights to subsidiaries, arguing that this undermines their value.
“If foreign or local investors are to pledge funds, which might have been raised on international markets, then the political and business climate must be attractive over the long term. Returns typically come to an investor only after years of a mine’s operation. That is why, time and time again, you have heard that watertight security of tenure is so important,” De Beers head of producer relations Jonathan Oppenheimer told the committee.
The South African Chamber of Mines echoed this concern, saying “the law should afford secure tenure that is continuous over the life and separate phases of prospecting and mining operations”.