The South African abhors “fronting” or window dressing in mining empowerment deals and such practices will be punished in the future by yet to be determined measures, said Department of Minerals and Energy (DME) director general advocate Sandile Nogxina on Wednesday.
At a workshop on enabling empowering in the South African mining industry, Nogxina said black people and women must have a role in the decision making process of companies they get a stake in.
DME deputy director general Nchakha Moloi said that South African mining employment was starting to increase due to the booming platinum sector after declining from 800 000 people in 1988 to about 400 000 in 2002.
Moloi said an alarming trend in South Africa was declining mining exploration.
“If there is no exploration then there will be a decline in the South African mining industry,” he added.
On beneficiation, Moloi said mining companies would not get credits for “process beneficiation” like converting chromium ore into ferrochrome alloy, which is then used in stainless steel.
Instead, the government would give credit to mining companies fostering substantial beneficiation such as Harmony Gold’s (HAR) support of gold jewellery manufacture.
Moloi said there were many new platinum mining projects that empowerment companies could join. On the other hand, the South African coal industry was a mature industry and empowerment companies were only joint coal mining expansions in the future.
In the gold industry, Moloi said empowerment companies had only been involved in marginal gold mines.
Other key commodities where empowerment companies are most likely to become involved in the future included diamonds, iron ore and manganese as well as heavy minerals.
At the workshop, Kumba Resources (KMB) chief executive Dr Con Fauconnier said it was too early to respond to the draft Money Bill, which deals with royalty payments.
On credits for past mining sale deals, Fauconnier said the mining charter was about the spirit of the transformation of the industry.
He added that the new mining legislation wasn’t specific about how past deals would be handled and that precedent would most likely deal with how past deals obtains credits.
Moloi said past deals would be judged according to the “continuing consequences” of the past deals as well as the attributable ounces sold.
The charter also allows for inter-company offsets, he added. – I-Net Bridge