‘There Is Always Something New Out Of Africa’ - Business Media MAGS

SA Mining

‘There Is Always Something New Out Of Africa’

That is what Pliny the Elder, Rome’s famous statesman, military commander, philosopher and writer would say about Mineral Resources Minister Gwede Mantashe’s latest thunderbolt to hit South Africa’s mining industry.

And Pliny should know, as he wrote Naturalis Historia (Natural History), 37 books, three of which dealt extensively with mining and later became an editorial model for encyclopedias. In it he details his intimate knowledge and first-hand experience of mining and mining methods, particularly gold and diamonds in Africa and other regions.

So how does a famous Roman know so much about Mantashe’s recently relaunched Mining Charter 4? He doesn’t. Pliny died nearly 2 000 years ago. The quote he is famous for was common in Greco-Roman antiquity and “invariably meant something unpleasant or abnormal”, according to David Northrup in Seven Myths of Africa in World History.

Peter Major of CADIZ ,Corporate Solutions ©Robert Tshabalala

The first South African Mining Charter (Mining Charter 1) leaked to the press in June 2002 and officially launched in 2004 managed to knock hundreds of billions of rand off the value of South Africa’s All Share Index and subsequently made paupers and unemployed out of over 100 000 hardworking world-leading mining men. But at least it made a few government-connected individuals wealthy.

However, like lead and mercury to the human body, that poison wasn’t enough to kill, and so Mining Charter 2 was launched in September 2010. But even this arsenic-fuelled injection wasn’t enough to stop the victim (SA’s mining industry) completely in its tracks and so a third version, Mining Charter 3, laced with cyanide this time, was offered to the mining community by the well-known government hitman Mosebenzi Zwane in June 2017.

But unlike the victims of the Jonestown mass suicide of 18 November 1978 in Guyana, where the messianic leader Jim Jones convinced 918 of his followers to drink cyanide-laced Flavor Aid, South Africa’s mining industry was not about to drink this cooldrink-camouflaged concoction. Not this time! No. They had been poisoned twice already with the two previous charters and did not wish to die yet. The industry immediately called a halt to further negotiations and headed to court.

At the time government pretended surprise and so went through the elaborate charade of changing the president and mining minister and then tried a backdoor cyanide Flavor Aid offering industry a familiar and welcome face – Gwede Mantashe.  But after two months of negotiating with Mantashe in good faith, the industry now finds itself looking at the same dreaded vial of cyanide in Mining Charter 4, only this time with a different flavour to that which masked Zwane’s Charter 3. So where to from here?

It is now obvious to all that Zwane and Charter No 3 were nothing more than a ruse – just like the outrageous opening wage demands that South African mining unions are famous for. With inflation averaging 5% or so, the unions’ first opening salvo is something like “25% plus increased housing allowance, medical and pension”. When shocked management then offers a 4% increase, unions curse vociferously and adjust their demands to 12%, stating to industry, “We have now come down 50% so you must up your offer accordingly.” Management faithfully does, to 8%, and in the end both parties settle on 10%. Still double inflation, but everyone feels better.

Is industry going to fall for this déjà vu stratagem again – albeit in a slightly different form? Hard to say. Most of South Africa’s mining companies are only skeletons of their former selves. They often count their futures in double-digit months, maybe a few years maximum. They know they have no real future, seldom making enough in SA to even pay token dividends, let alone attract new investment. So mining companies, being already battered and near the end of their lives, will probably relent on most of Mantashe’s demands – just to buy a little time to say proper farewells and get their affairs in order.

Charter No 4 won’t bring in any net foreign capital, but it was never designed to. Charters 1 and 2 chased away any chance of getting net foreign money for SA’s mining industry and that didn’t bother the government or its backers one little bit because that was never its intention. No, like its predecessors, Charter 4 has gone right to work trying to squeeze out whatever little juice is left in the industry in order to secure government’s return in the 2019 election.

“This charter will lock in stability for the next 30 years,” Mantashe professes. “All industry has to do now is sign on the dotted line. They wanted certainty. This charter gives them exactly that for the next three decades and possibly longer.”

But certainty and stability for whom? The more than 450 000 miners who have lost their jobs over the past few decades? Or the over 900 000 industry-supporting workers who lost theirs? Or the hundreds of mines that have now closed permanently? Who wants “that” kind of certainty, that kind of transformation? What about a charter designed specifically for creating mining jobs and attracting foreign capital? Wouldn’t that be better?

Image: ©Shutterstock - 131722550
Image: ©Shutterstock - 131722550

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