As part of the South African government grand plan to reverse economic exclusion of the majority black in the country. A new mining regulatory charter has been announced on Thursday, that will see employees of (and surrounding communities) get a free stake at mining companies.
Although the mining industry now accounts for just eight percent of the country’s gross domestic product. The industry did lay the bedrocks that raised South Africa into becoming the most industrialized economy on the continent.
However, much of the gains earned from the exploitation of the country’s natural resources has not gone towards improving the socio-economic welfare of the black majority. Then again, some would argue the black majority have historically not gained much out of wealth generating ventures in the Southern Africa country, which was ruled under apartheid until just very recently.
The murky policies that have bedeviled Mining Industry in SA
The mining industry is not performing as well as it used to in the past, due to depressed prices, murky policies, and increasing costs. Mining sites around the country have been a flashpoint of social and labor unrest. There are a lot of stakeholders who allege that much of the wealth flowing out of these mines do not benefit the local communities.
In the period 2016 to April 2018, the eastern side of the platinum belt has recorded more than 400 incidents of social unrests. A disruption that only serves to cripple the business profits from operating the mines.
As part of the South African government affirmative action drive, the Resources Minister Gwede Mantsahe presented a new regulatory charter (the third version of it), which requires miners to give local communities and employees a free 10% stake.
“Regulatory and policy uncertainty is removed. We have a duty now to mobilize investment into mining,” said Mantsahe during a media briefing.
It is important to point out that Mantsahe, is a former trade unionist and a senior member of the ruling political party, the African National Congress (ANC). The announced charter if followed to the letter, will see black ownership of mines in South Africa rise to 30% from the previous 26%. When broken down, that 30% stakes represents 20% to black business interests, and 5% each to employees and surrounding communities.
“The community/employee stake is a 10% investment in peace and stability. Current levels of mine community unrest and high number of industrial action creates a high level of instability,” said Gideon du Plessis, the head of Solidary trade union that represents skilled workers.