UASA, one of South Africa's oldest trade unions and previously known as the United Association of South Africa, has appealed to the country's government for a speedy resolution of the dispute with businesses over the Mining Charter and to streamline the registration process for companies in order to attract investment to the mining sector.
Mining industry unions were invited by the Parliamentary Portfolio Committee on Mineral Resources and Energy to make submissions on Aug. 20 ahead of the drafting of a new five-year strategic plan, which is due to be renewed in February 2020.
Franz Stehring, UASA's head of mining, said in an interview on Aug. 21 that investors were looking to government for certainty and ease of doing business, which was essential if mining was going to go from a "sunset to a sunrise industry."
"UASA has recommended there be a single place, a one stop shop, where investors can go to register, and where they can deal with everything from exploration upwards instead of being forced to go from one department to the next," he said.
The country's regulatory framework is not very investment friendly, he said. "We have a situation where we have a Mining Charter, but that is a guideline not law. Investors are willing to go to a country where government wants a share of the company, like Zimbabwe which requires 51% ownership, they just want certainty about what will happen to their money."
Stehring believes there is investor interest in South Africa's resources, and the government is well placed to make the changes needed to revive the mining sector. "We have President Cyril Ramaphosa, who is a former general-secretary of the National Union of Mineworkers, and mining minister Gwede Mantashe, who was once NUM Regional Secretary. Both have a good understanding of the challenges facing the mining sector," he said.
"The Mining Charter had seen extensive consultation and all stakeholders, including business and labor, managed to agree on everything except the sale of mining rights which requires the buyer to meet broad-based black economic empowerment requirements even if this had been achieved," he said.
The Minerals Council of South Africa, which represents leading mining companies like Anglo American PLC, Sibanye Gold Ltd. and Glencore PLC, has applied for a judicial review of, and to set aside, some clauses of the third version of the Mining Charter, saying it "had a severely dampening effect on the attractiveness of mining in the eyes of investors" and would be detrimental to the sector. It has also asked government to review a clause requiring junior miners to comply with the same black empowerment requirements as larger miners.
UASA is asking government to settle the dispute out of court or face a lengthy legal battle which prevents implementation of the Mining Charter, and provisions like empowerment of women and improved living conditions.
The Minerals Council on Aug. 22 told S&P Global Market Intelligence that it remained committed to resolving the dispute around the Mining Charter and would continue to engage with government.
