Legend has it that there was a rich man who was so stingy he died of hunger with money in his pocket. The man spent each day admiring his treasures and resisting the temptation to spend money on sustenance.
This story resembles that of residents of the Xolobeni area on the Wild Coast in the Eastern Cape, embroiled in a decade-long battle against the mining of their land. Like the rich man, they are sitting on a pot of titanium while suffering poverty and underdevelopment.
Yet the residents, represented by the Amadiba Crisis Committee, have remained steadfast despite huge pressure to allow mining. They have opted to live off the land rather than on the revenue of underground riches. They fear environmental degradation, displacement from their homes and land, and the consequent destruction of their way of life, a commonplace side effect of mining operations.
Investors and businesspeople may view their conduct as economically unwise. Why would people ravaged by high levels of joblessness and poverty object to new employment opportunities? To the environmentalists, the community’s conduct is laudable in that it is being considerate to the Earth and the needs of future generations.
Ultimately, mining-related decisions have to balance competing interests, be they commercial, social, environmental or related to sustainable development. It seems to be the case, most often, that vested commercial interests eclipse other, equally important, developmental imperatives. Rural mining towns across South Africa know all too well the unrelenting pressure placed on them by commercial interests with a profit agenda and excessive influence over government policy.
Xolobeni people have withstood both mounting pressure and internal conflicts for years. The pressure was fomented by those driving the agenda in favour of mining, whether in the land belonging to the residents or elsewhere. People have died.
They continue to wage legal battles against the government’s issuing of a mining licence to an Australian mining company, Mineral Commodities, which has a majority interest in the holding company, Transworld Energy and Mineral Resources. Interestingly, the battle lines have shifted: they used to lie between the residents and the mining company, but now they fall between the community and the government.
When Minister of Mineral Resources Gwede Mantashe visited Xolobeni, in an apparent attempt to persuade the residents to change their minds, they protested vehemently against his presence. He returned on Wednesday without an invitation from the residents, which seems to fly in the face of the Pretoria high court ruling in November last year that upheld the Interim Protection of Informal Land Rights Act. Of the 72 homesteads in the area, 68 had opposed the mineral resources department.
A battle between two parties who are both custodians of the land and supposedly share similar interests raises disquiet. Questions can be asked: Why is the government determined to pursue mining development against the wishes of the people? Does it not support the development path the residents have chosen? Could this be an indication of the government flexing its muscles to protect its regulatory responsibilities? Or is the government capitulating to the pressure of commercial interests? Is it pretending to be oblivious to the legitimate concerns of the residents? Clearly something is amiss.
The Minerals and Petroleum Resource Development Act accords the government the power to issue mining licences wherever mineral deposits exist. This licensing regime is intended to regulate title deeds to the ground and the minerals beneath it. It is also meant to take into consideration other important issues such as health, safety, the protection of the environment and responsible extraction. Other implicit considerations are broader economic development, job creation, tax revenue mobilisation and rent extraction.
Yet the recent court judgment in favour of the Xolobeni community has established that the power to grant mining licences is not the sole preserve of the government. Residents must be consulted and must give their consent before mining companies are granted licences.
On the other hand, Mantashe has rightly argued that mine licensing cannot be left to the whims of communities alone: “We may end up with excessive corruption or no mining at all,” he said.
Predictably, the government has indicated its intention to challenge the Xolobeni judgment. The requirements for residents’ consent may ultimately place barriers on the licensing process.
This enduring standoff, however undesirable, points to a need for reform in the licensing regime. The government appears to be narrowly focused on protecting its regulatory territory and its capacity to dispense permits or mining rights, although it must be added that this application process is fraught with maladministration. Mantashe will have to deal with that aspect of the licensing regime if he is to make meaningful arguments to communities such as in Xolobeni.
The people of Xolobeni are simply highlighting the fact that the mere existence of mineral deposits does not necessarily mean a mining licence should be granted automatically. Some mineral deposits, it could be argued, need to be preserved for the benefit of future generations and to guarantee sustainable supply.
The mineral rush in South Africa over the past century or so was driven in part by indiscriminate licensing and lax regulations. Land parcels that were once regarded as cornucopias of mineral riches are now depleted and unproductive. South Africa used to produce about 90% of the world’s diamonds; today it is 7%. A similar fate is likely to befall other strategic minerals if licensing processes and output targets are not well planned and managed.
The world titanium market is in its infancy, so prices are not so attractive that government has to push for extraction in Xolobeni.
Also, South Africa lacks the research and development capacity to use titanium in areas such as chemicals, medical applications, aerospace and vessels.
Countries such as Australia, Canada and China have taken the lead in meeting the current global demand. But South Africa could use its strategic position as the second-largest producer of titanium concentrates to influence, by means of planned licensing controls, global output and prices.
Objecting to mining in Xolobeni should not be seen as ignorant and anti-development.
There are many communities to which mining has brought devastation, reinforcing the view that mining benefits mining companies and government only. What is required is for government to adopt a conciliatory, collaborative, people-centred approach to resolving the dispute.
It should heed the call to suspend the licence in the medium term, while building the industrial capacity to exploit the titanium value chain in South Africa.
It should reform the mining licensing regime and align it to the country’s long-term development agenda.
Eddie Rakabe is an economist, writer and researcher