New Mining Charter is Radical Economic Transformation in action
The new Mining Charter released by our captured and compromised mining minister Mosebenzi Zwane last week is a disgrace. Overnight, it slashed R50 billion off the value of mining shares, but if it is implemented the long-term destruction of value for all South Africans will be much greater. The ANC was quick to distance itself from the charter, and yet President Zuma roundly endorsed it in Parliament last week. Of course. Advised by the Zuptas for the Zuptas, it serves their populist, criminal, destructive agenda. We can expect more of this disastrous, disconnected policy-making in the run up to the national elections in 2019, and we must fight it with all our might.
The charter is Radical Economic Transformation in action, the Zuptas scorched earth approach to liquidating the economy while consolidating power over the state, on the pretext of fighting inequality. State capture has the nature of a patronage Ponzi scheme, a hungry monster to be constantly fed. That’s why the Zuptas, if unchecked, will bleed SA dry. Luckily, and thanks to the unsung hero who leaked the Gupta Emails, South Africans have seen through the ruse. On Friday morning, an angry crowd chased Zwane away from an Mpumalanga mining indaba.
The charter makes it even easier, and even mandatory, for connected cronies to benefit from every mining “empowerment” deal. Far from actually empowering mineworkers and ordinary South Africans, the lion’s share of empowerment deals will now be reserved for the connected Zupta few. The revised Charter was a wonderful opportunity to show what true, broad-based empowerment could be, by incentivising companies to turn mineworkers into shareholders and partners. But that opportunity would not keep the Zupta cash pipeline flowing. Instead, the approach could be called “milking a cow whilst stabbing it”.
The Chamber of Mines, which represents 90% of the mining industry but was not consulted, has rightly challenged it in court. Mining labour unions have said they intend challenging some aspects of the charter, and rightly so. When the mining industry is destroyed, so too will the livelihoods of the hundreds of thousands of unionised workers who work in the industry. So the charter is unlikely to see the light of day for months or years, but if it did, it would very soon result in marginal mines closing and destroy jobs in a sector which has already lost 60 000 jobs in the past five years. It would chase away the few companies which may still have been considering investing in a sector which was already hugely uncompetitive. South Africa may have the largest mineral endowment of any country in the world, but it ranks 74th for mining investment attractiveness. And that was before Zwane dropped his bombshell.
The central question informing mining policy right now should be: how can we get this industry to preserve and even create as many sustainable jobs as possible? Yes, this industry has a major role to play in redressing the past, but that should be done by empowering actually workers and their families, not the corrupt fat cats. Mining needs a lifeline, not a deadweight.
SA is on a precipice. Unemployment is at a 14 year high with a record 9.3 million people jobless. Our economy is now officially in recession, having contracted for six consecutive months, though real per capita incomes have been falling for three years. Our local bonds are just one notch above junk and may be declared junk very soon, which may trigger the sale of R100-150 billion of SA bonds by foreigners. The impact on the rand will be hardest felt by the poorest and most vulnerable.
Under a DA government, mining policy, like all policy, will be made in open consultation with all stakeholders, in the best interest of all South Africans – especially the poorest and most vulnerable. The only way to stop the rot brought on by Zuma and the Guptas is by voting the corrupt ANC out in 2019 and replacing them with a government that puts the people first. A government led by the DA.