Just when you thought it was safe to buy SA mining shares again

At one point I asked then mines minister Susan Shabangu why were we having this debate in the first place.

I pointed to the example of Zambia which destroyed its copper mining industry through nationalisation. The answer – in a nutshell – was that those were the Zambians. We are South Africans. We can do it differently.

My conclusion at the time was that the ANC seemed hell-bent on “re-inventing the wheel” and would not take common sense advice that contradicted its economic ideological doctrines despite the obvious lessons of history. I have not changed that opinion.

I think the ANC “has it in” for the country’s established mining industry because the ANC believes it benefited hugely from apartheid and must be punished for that.

The fact that the mining industry just might go down the tubes during this retribution process – taking with it hundreds of thousands of jobs and the country’s main sources of foreign exchange – does not seem to register with the politicians.

This is what the DMR had to say about its decision to appeal the High Court ruling. “The judgement has dire implications for the economic transformation imperatives of the Constitution, the mining sector and South Africa at large. It further has the potential of extending regulatory and policy uncertainty and sterilisation of our mineral resources, with grave economic growth and unemployment implications.”

They just don’t get it. The SA mining industry is already in crisis – “with grave economic growth and unemployment implications” – precisely because of the regulatory and policy uncertainty created by the ANC over the past decade.

So why did Mantashe change his mind? According to DMR spokesperson Ayanda Shezi it was because, “the Minister has applied his mind to the judgement and its implications and it is his considered view that it should be appealed.”

Alternative viewpoint is that Mantashe came under pressure from other ANC heavyweights. Peter Leon – co-chair of the Africa Group at legal firm Herbert Smith Freehills – tells me that the decision was “unexpected and I am not sure if it was Mantashe’s decision.”

If that’s what happened then the Chamber is negotiating with a politician who does not hold the power it clearly believes he does.

So what happens next? Leon reckons that, “ it does not exclude further negotiations. They may be able to ‘park it’ and continue with the negotiations. “

Mantashe said on April 10 he expected negotiations on a new Mining Charter to be resolved by the end of May and Shezi tells me the DMR still expects to work “within the timeframe previously indicated”

The Chamber is more cautious stating, “the minister has set an ambitious deadline. The Chamber remains committed to helping to finalise the process in a reasonable timeframe.”

But this thing could drag on for up to two years if it goes all the way to the Constitutional Court – which it may well do – when what is needed is a swift resolution so that a new, sane, Mining Charter can be brought into force.

One radical suggestion is that the Chamber should bring firebrand mining lawyer Hulme Scholes on board as chief negotiator because he would best be able to deal with Mantashe and his sidekick – former DMR director general Sandile Nogxina.

What a marvellous prospect but it’s just not going to happen. The Chamber has already sided with the DMR in opposing Scholes’ High Court application to have the Mining Charter scrapped in its entirety.

=============================================================================From from 2014...

https://www.news24.com/MyNews24/Should-South-Africa-nationalise-its-mining-industry-20140428

South Africa is a developing country and does not yet possess the funds needed to purchase, expropriate or maintain its towering trillion dollar mining industry[19][20]. As such, the only choice, if nationalisation is to be implemented is the first option above: to demand a higher share on the industry’s revenue or tax percentages. But before you put the tea down and go for demonstrations in the street, let us take a much closer look at the industry and what it means to the country’s financial health.

Looking at the 2012/2013 industry approximations; South Africa’s mineral reserves are estimated at $2.5 trillion, it has the largest manganese and platinum group metals, and sits atop the largest reserves of Gold, Diamond, Chromite Ore, and Vanadium