Webber Wentzel E-Alert: Minister Mantashe sets positive tone at Indaba

04 February 2019

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Minister Mantashe sets positive tone at Indaba

We wanted to take this opportunity to provide you with our insights on the Minister Gwede Mantashe's opening remarks at Mining Indaba this morning.

A copy of the Minister's speech is available here. We note, however, that the speech delivered was different in parts to that published. We also include a copy of the compact (signed this morning before the speech), available here - but noting that although AMCU is cited in the agreement, we understand that they did not sign.

Overall, the keynote speech delivered by minister Mantashe emphasised important issues for industry growth, such as community relations and infrastructure development. But the right policy actions in the long term are needed to unlock investment.

To change the landscape for investors, a lot of things still need to be done over time. But certainly the minister seems to be moving in the right direction. In his first year, Mantashe has already taken some constructive actions, including re-establishing a positive relationship with the Minerals Council, rapidly revising certain policies and taking the contentious MPRDA Amendment Bill off the table.

The minister’s speech should probably be seen as a scene-setter for the president’s speech to be delivered at Indaba tomorrow.

Jonathan Veeran: The minister’s summary of the state of the industry and the difficulty it faces in growing in a global context, without the benefit of battery minerals, was realistic.

The mining minister has worked in the industry himself, and his familiarity with the issues underpins his realistic view. He understands that SA needs to make structural changes to unlock investment. Mantashe possibly sees his role differently from his predecessors in bringing together communities, labour and mining houses.

We had hoped the minister would address in his speech important issues like corruption, policy certainty and administrative efficiency, and he touched on all those areas.

We would have hoped the minister would map a longer-term path for the industry over the next three years. But he made no extravagant promises.

Mantashe acknowledged the important role that infrastructure, and the costs of infrastructure, play in mining. Although some areas are very efficient, like the manganese and iron ore lines and ports, he admitted that some work needs to be done on other areas.

He indicated a need to drive more exploration and said he has directed the Council for Geosciences to enhance mapping of SA’s orebodies.

Although there were some concerns expressed on social media that the minister would compel mines to share their exploration data with the Council in future, I doubt that was what the minister intended. The minister was probably simply suggesting there was a need for greater co-operation between mines and the Council. In the past mines were secretive about their geological data.

Manus Booysen: Having more geological data generated by the Council would not be enough in itself to trigger new investment. Mining exploration companies also played a critical role in establishing the viability of new mines. In the panel discussion that followed Mantashe’s speech, he emphasised the importance of communities and, although this might be seen as electioneering, he made some positive statements.

The minister also emphasised the need for a positive relationship between mining houses and communities. I believe he was sincere. He emphasised communities’ responsibility in strengthening that relationship. He also made it clear that it won’t help people to achieve their aims by disrupting mines, in fact it will delay results. He said rather let operations continue while you negotiate.

Mantashe also emphasised that dissenting communities around the proposed Xolobeni mineral sands mine could not be allowed to usurp the power of the regulator to issue mining licences.

Rita Spalding: The minister said most of the Xolobeni community was in favour of mining but a small group against it was receiving a lot of media attention. I appreciated that he is our first mining minister to acknowledge that if the mines make no profits, no-one benefits.

Johan Olivier: The compact signed between government and its social partners ahead of Indaba is a welcome development. A positive step towards bringing more stability to labour relations, as the signatories committed to good faith in dealing with labour disputes and dealing with Business' concerns about the trade unions' compliance with the law. The trade unions that signed it included the NUM, Uasa and Solidarity. I am, however, concerned that the compact was not signed by AMCU, which is currently a major disruptor in the industry. We would like to see government do more to bring AMCU into the fold to promote a stable and normal relationship between unions and business and among the different trades unions.

Lizle Louw: The compact in many respects repeated previous compacts signed between government, labour and business. But what is important is that two of the six commitments by labour relate to compliance with the legal framework.

CONTACT US


For further information, please contact your usual Webber Wentzel adviser or one of the people listed below:

Bruce Dickinson | Partner, Head of Mining Sector Group
bruce.dickinson@webberwentzel.com | T: +27 11 530 5381

Jonathan Veeran | Partner, Deputy Head of Mining Sector Group
jonathan.veeran@webberwentzel.com | T: +27 11 530 5336

Robert Appelbaum | Partner
robert.appelbaum@webberwentzel.com | T: +27 11 530 5656

Manus Booysen | Partner
manus.booysen@webberwentzel.com | T: +27 11 530 5224

Rashaad Carrim | Partner
rashaad.carrim@webberwentzel.com | T: +27 11 530 5630

Kenneth Coster | Partner
kenneth.coster@webberwentzel.com | T: +27 11 530 5836

Priyesh Daya | Partner
priyesh.daya@webberwentzel.com | T: +27 11 530 5358

Megan Jarvis | Partner
megan.jarvis@webberwentzel.com | T: +27 11 530 5804

Lizle Louw | Partner
lizle.louw@webberwentzel.com | T: +27 11 530 5926

Johan Olivier | Partner
johan.olivier@webberwentzel.com | T: +27 11 530 5194

Alessandra Pardini | Partner
alessandra.pardini@webberwentzel.com | T: +27 11 530 5007

Eugene Phajane | Partner
eugene.phajane@webberwentzel.com | T: +27 11 530 5712

Garyn Rapson | Partner
garyn.rapson@webberwentzel.com | T: +27 11 530 5892

Rita Spalding | Partner
rita.spalding@webberwentzel.com | T: +27 11 530 5230

Trevor Versfeld | Partner
trevor.versfeld@webberwentzel.com | T: +27 11 530 5352