Industry sees red after Mantashe says no BEE for mining exploration, contradicting draft Bill
A new mist of uncertainty has shrouded mining policy just as progress is being made on other fronts such as the looming rollout of the long-awaited mining cadastre to address the applications backlog for mining and prospecting rights and permits.
The draft Mineral Resources Development Bill (MRDP) has stirred a hornet's nest in the mining industry and with the ANC's GNU political partner the DA, and its ill-conceived nature was on full display on Wednesday when Minister Gwede Mantashe confusingly said the BEE requirements for exploration were not there and would be removed if they were.
'Now, and in the future, there's no provision for BEE on exploration,' Mantashe, the Minister of Mineral and Petroleum Resources (MPR), said during a media briefing at the conclusion of the AGM for the Minerals Council SA, the main body representing the country's mining industry.
That's neither the Minerals Council's reading of the draft Bill nor Daily Maverick's interpretation of it.
'We raised this point over and over in our engagements with the department that the amendments must specifically exclude prospecting companies from empowerment requirements … Yet in this draft Bill, none of that is included,' Minerals Council CEO Mzila Mthenjane said in a statement on Tuesday.
The thing about prospecting – or exploration – is that it is an extremely high-risk activity that onerous BEE rules will severely curtail. And without exploration, the South African mining industry has no viable long-term future.
Daily Maverick asked Mantashe to clarify this afterwards and he responded by saying: 'If there is a BEE requirement in the Bill for prospecting, it must be removed.'
So, the industry's complaints on this front are not falling on deaf ears, though it has raised concerns that its inputs were not included in the draft.
And a new mist of uncertainty has shrouded policy just as progress is being made on other fronts such as the looming rollout of the long-awaited mining cadastre to address the applications backlog of mining and prospecting rights and permits.
Overall, the industry is not happy with the Bill, which once again moves the goal posts at a time when investors are crying for certainty for a sector that remains crucial for South Africa's low-growth and high-unemployment economy.
'When we ask ourselves this question, does this Bill promote investment and create jobs, we see it has some serious short-comings,' said Paul Dunne, the CEO of Northam Platinum, who was re-elected as president of the Minerals Council SA.
'They are both substantive in nature and technical … Council is a very considered, professional advocacy group. We represent at least 99% of the mining industry in this country and our submission [on the draft Bill] will be made public when the right time comes, and we will engage very, very robustly with the department and the minister on this issue,' he said.
The good-natured Dunne added: 'The minister knows us very well. We are very tough. And minister, we are coming.'
That raised a chuckle from the audience and Mantashe, but it is no laughing matter – except for lawyers, who are going to giggle all the way to the bank.
The draft Bill raises the almost certain prospect of arduous and time-consuming legal and court battles – another obstacle to the investment that the mining sector and wider South African economy desperately need to reach faster levels of growth and job creation.
It has also raised hackles in the GNU, which is supposed to be the ANC's main governing partner.
One bone of contention is embedding the Mining Charter into the legal framework, which could once again unleash the 'once empowered, always empowered' debate which the industry has already won in court. But fresh legal scraps could loom on this front.
This played out in the courts when Gupta stooge Mosebenzi Zwane was the minister in charge of mining, and the term refers to the industry's contention that once a company reached a required BEE ownership threshold that should be set in stone even if black shareholders decided to sell their stakes – which is the point of owning shares.
The government at the time held that mining companies needed to endlessly keep topping up BEE stakes, a state of affairs that would dilute value and repel foreign as well as domestic investment.
'By expressly including the Mining Charter as law and not simply policy, the Bill allows for the rapid overturning of t'once empowered, always empowered', opening the door to the need for constant injections of new BEE investors, a feature which would on its own make investing a lossmaking prospect,' MP James Lorimer, the DA spokesperson on Minerals and Petroleum Resources, said in a statement.
'The Bill is poorly thought out. It is contradictory and unclear in several places. It grants new powers to the Minister to rule the industry according to his own whim.'
What this means
More policy confusion and uncertainty at a time when South Africa needs both to extract wealth, investment and job creation from its rich minerals endowment. It will also test the GNU and likely trigger a tsunami of legal challenges for South Africa's already stretched court system. The ANC is acting like it has a two-thirds majority in Parliament on this front and has yet to be pulled back to Earth by the laws of political gravity.
Mantashe on Wednesday reminded the industry of its racist past, and that is no bad thing – in an age when US President Donald Trump is parroting fascist-inspired lies about 'white genocide', hard historical truths need to be confronted head-on.
The South African mining industry was the economic bedrock of apartheid, subjecting an overwhelmingly black migrant labour force to ruthless exploitation.
But the times are changing and the industry – partly in response to government regulation and union demands but also wider concerns among investors foreign and domestic – has made strides from the indignities of the apartheid past on a range of fronts, including ownership, wages, communities, health and safety.
BEE as a mantra has not delivered a utopia while enriching a relatively small elite, and it is also starting to look like a fossilised relic in an age when – despite the Trump administration's efforts to turn the tide – capital is largely looking for kinder, gentler returns.
The Bill, for now, is not law and open to public comment. Break out the popcorn for the fireworks. DM
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The South African
21 hours ago
- The South African
MTN under fire as senior management fills its pockets as share price falls
Telecommunications giant MTN Group is under fire from shareholders after nearly R249 million was paid to its executives and board members during 2024 – a year in which the company's share price fell by 21%. At its most recent Annual General Meeting (AGM) in late May, 40.82% of shareholders voted against the company's remuneration implementation report, falling short of the 75% approval threshold required for the non-binding advisory resolution to pass. The company's remuneration policy itself also faced scrutiny, with 24.34% voting against it. The 2024 Remuneration Report shows: Group CEO Ralph Mupita earned R64.75 million earned Group CFO Tsholofelo Molefe received R33.6 million received MTN SA CEO Charles Molapisi took home R26.3 million took home Senior VP Ebenezer Asante earned R37.8 million In total, MTN's top executives were paid nearly R198 million. Meanwhile, non-executive directors collectively received R51.4 million, with Chairman Mcebisi Jonas earning R7.37 million. The generous compensation packages stood in sharp contrast to MTN's 2024 stock performance. The share price declined from R117.00 on 1 January to R91.99 by year-end, prompting dissatisfaction among shareholders who saw their investments shrink. This disconnect between executive remuneration and shareholder returns has been a long-standing point of contention. Many investors argue that pay should be more closely tied to company performance and shareholder value creation. Following the AGM, MTN issued a statement via the JSE's Stock Exchange News Service (SENS) acknowledging the shareholder dissent. The company invited those who voted against the resolution to submit concerns in writing and attend a scheduled engagement session on 26 June 2025. 'We value the insights from our shareholders and remain committed to aligning executive pay with long-term strategic goals,' said Dr Khotso Mokhele, chair of MTN's Human Resources and Remuneration Committee. Despite defending the remuneration structure as 'fair, competitive, and performance-driven,' MTN now faces mounting pressure to rethink its pay philosophy, especially in light of lackluster returns to shareholders. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The Citizen
2 days ago
- The Citizen
Tobacco Bill bans sale of loose cigarettes – informal traders fear bankruptcy
A clause in the Bill bans the sale of single cigarettes, and if a person is found selling a 'loose' cigarette, they can be fined and/or imprisoned. The Tobacco Products and Electronic Delivery Systems Control Bill in South Africa prohibits the sale of single cigarettes (or loose cigarettes), which informal traders say could bankrupt their businesses. It also regulates other aspects of tobacco control, including public smoking, advertising, and packaging requirements. The Portfolio Committee on Health discussed the impact of the Bill on businesses earlier this week. Members have completed public hearings in all provinces and are now taking oral submissions in parliament. ALSO READ: Why is parliament dragging its feet with the Tobacco Bill? Tobacco Bill Mampapatla Madikoto, Limpopo Small, Medium Enterprises and Hawkers Association general secretary, told members of the portfolio committee that the ban on single cigarettes would cripple their operations, as many of their customers not only buy cigarettes but also other items. A clause in the Bill bans the sale of single cigarettes. If a person is found selling a 'loose' cigarette, they can be fined and/or imprisoned. He added that there are many reasons why people decide to buy single cigarettes, including a box being too expensive, or they are trying to control their smoking habit. Display of tobacco products Madikoto added that the clause will affect approximately two million informal traders, hawkers, spaza shop owners and home-based operators across the country. The proposed Control of Tobacco Products and Electronic Delivery Systems Bill aims to strengthen these measures further by introducing even stricter regulations. This includes banning the display of tobacco products at the point of sale, regulating electronic nicotine delivery systems, and potentially moving towards plain packaging. He told the members that the Bill's ban on displaying cigarettes on countertops or tables is impractical. ALSO READ: Tobacco bill won't curb smoking in the least Smoking outdoors The proposed Bill also seeks to hold traders liable if their customers are found smoking near their stalls in outdoor public places that are designated nonsmoking areas. Currently, tobacco legislation prohibits smoking in indoor public places, except for designated smoking areas that can be up to 25% of the indoor area. However, the government is considering a complete ban on smoking in indoor public places and certain outdoor public areas. The owner of the restaurant/pub, or employer, will be responsible for ensuring that the public space designated as a nonsmoking area is smoke-free. Selling online Madoda Khuzwayo, CEO and founder of SIP, told the committee that the Bill discriminates against online shopping. The Bill seeks to ban the sale and offer for sale of tobacco products online. Khuzwayo, who sells alcohol and tobacco products online, said this clause is unfair, as selling such products contributes significantly to his business. He highlighted that online retailers will not be able to list any tobacco products, while larger physical retailers are permitted to do so. ALSO READ: Pressure mounts for government to pass Tobacco Bill Underage smoking One of the reasons for the strict measures is to control underage smoking, which Khuzwayo has addressed in his business. 'When someone buys alcohol or cigarettes through our business, they will need to produce a physical identification document upon delivery, which will be captured into the system. 'But it is close to impossible for underage smoking to be prevented if children need to go into the store to make a purchase, because some look older and there will be no need to ask for proof of identity,' he added. He said the government can check online retailers' data to prove that alcohol and tobacco are not being sold to minors. Additionally, most of the websites that sell these items block minors. Khuzwayo has requested that the government consider removing the clause banning online tobacco sales. He highlighted that without the necessary amendments, the Bill risks discriminating against small and medium enterprises (SMEs), as e-commerce is many SMEs' main source of revenue. 'Without amendments, the Bill entrenches inequality, especially in townships, and excludes emerging small business players,' he said. NOW READ: Budget 3.0: Alcohol and cigarette prices will increase — here's by how much
Daily Maverick
2 days ago
- Daily Maverick
Promises, potholes and a R71bn budget — can Mayor Xaba Fix Durban?
eThekwini Mayor Cyril Xaba is trying to lead a turnaround, but the city faces spiralling debt and a billing crisis. eThekwini Mayor Cyril Xaba is talking it up, and who can blame him? The man at the helm of a city hobbled by corruption is putting his best foot forward, trying to build trust with citizens fed up with crooks. Last week, Xaba passed a R70.9-billion budget, and his recent speeches to council and business have been measured and optimistic. Xaba, constantly drilled by ratepayers, is basking in a bit of glory after Durban successfully pulled off a host of big sporting events, which saw the city spruce up and the metro police out in full force. But while the mayor's reassuring language is laden with mollifying words about National Treasury prescripts and the virtues of consequence management, he is in the spotlight. The city's public relations machine aims to signal competency and accountability, distancing Xaba from the ineptitude and looting that have come to characterise the municipality. The jury's out on how much difference Xaba has made since he was parachuted into the top job a year ago. His installation coincided with a provincial intervention in the city headed by former city manager Mike Sutcliffe and former presidential director-general Cassius Lubisi. A month before their arrival, President Cyril Ramaphosa established a working group in response to business concerns about city failures. And, a year before that, the city launched a turnaround strategy. So, while First Citizen Cyril is trying hard, ratepayers, business and opposition parties are concerned that the city is sliding deeper into debt. Not everyone likes Xaba's numbers, especially tariff increases. The average property rate increase is 5.9%; Electricity is up by 12.72%; Water is up by 13% for residents and 14% for businesses; Sanitation is up by 11%; and Solid waste is up by 9%. Daily Maverick sent the city a detailed list of questions relating to the budget, which it says the treasury department wants to answer fully. We will share this when it becomes available. In broad strokes, the budget allows R63-billion for operational expenses and R7.3-billion for capital projects. The big-ticket items include bulk purchases from uMngeni-uThukela Water (R5.7-billion) and Eskom (R18.7-billion). The city spends R15.2-billion on salaries for about 24,000 staff, R7.6 billion on contractors and R1-billion on interest for loans. Debt crisis The city's big issue is growing debt. Residents owe R35.5-billion, which the city puts down to the economic crunch, but critics say rates and services are too costly. Of the total debt, 40% is for unpaid water. Outstanding property rates and unpaid electricity account for 25% and 15%. Most of the debt (75%) is owed by households. Businesses owe 20% and state departments the balance. In December 2023, the debtor's book was at R28-billion. A year later, it was at R35.5-billion, which had risen to R38.6-billion by April. This means the city will need to borrow more or bill more for services. In a bid to staunch the losses, it is offering businesses and residents a chance to write off 50% of their debt if they settle before the end of June. The valuation roll has only 554,280 rated properties (481,000 residences, 17,000 businesses and 7,000 industrial). About 330,000 properties are valued at less than R350,000 and rates-exempt. Another 150,000 are worth more than R350,000, but are not rateable. Durban, with a population of about four million, has more informal settlements than any other city in the country (about 600 with 314,000 households). And, other metros in South Africa have more rate-paying households. Figures from the Centre for Affordable Housing Finance in Africa show about 824,000 residential properties on the deeds registry in Johannesburg and about 767,000 in Cape Town. In eThekwini, the Ingonyama Trust (land administered by the Zulu king) controls huge swathes of land where properties are not rated. Alan Beesley is an accountant, a former eThekwini councillor and ActionSA's finance spokesman. 'The only way for the city to fix its books is to spend less and offer a better service that will attract more ratepayers. At the moment, Durban has a shrinking ratepayer base subsidising a growing number of people not paying for services.' Business backlash Xaba has promised the city will bring in more money from rates and services, and that officials will waste less and work harder. 'Dashboards linked to service delivery targets' are among a host of measures to improve and cut annual water losses of R2-billion. 'We will bury potholes, sweep the streets, cut the verges and keep the lights on,' Xaba promised. Reaction to the budget has been testy. The Durban Chamber of Commerce and Industry is concerned with low confidence in the municipality's ability to spend on priorities. There was a 'continuous disconnect' between what happened on the ground in Durban and the 'grand plans' emerging from the Presidential Working Group. 'We need to see meaningful action with key timelines and tangible reforms that will accelerate service delivery and reverse the economic decline,' the chamber said. Water losses might be higher because many meters were 'dysfunctional or not working at all'. Tariff tensions The Ethekwini Ratepayers Protest Movement (ERPM) is tired of city hall promises. ERPM's Rose Cortes roasted the 'habit of reckless lending and spending', saying some parts of the municipality were 'delinquent'. The ERPM says city billing is a mess. 'For example, they didn't read the water meters for extended periods and some residents had underground leaks which they didn't know about. Then, when they actually read the meter, you are hit with a massive bill you can't pay. They won't give us stats on how many meter readers they have. The contractors are paid, but they don't read the meters, some for as long as 500 days.' Cortes says some houses valued at less than R350,000, which qualify for rates exemption, free water and discounted electricity, don't receive this benefit, but others that don't qualify do. The only way to stop blatant theft and crooked deals was line-by-line scrutiny of spending. Cortes said the city recently ran out of money to pay contracted plumbers and even the mayor expressed concerns about the poor workmanship by contractors. Also, city schemes to provide poor relief were dubious, Cortes said. 'Reports on indigent households are inaccurate and the process to register for indigent care is ineffective and stupid.' ERPM's chair Asad Gafar said 500,000 ratepayers effectively cross-subsidised eThekwini's four million-plus residents. 'Ratepayers wouldn't object to the cross-subsidy if the city improved the lives of the poor, but it doesn't. Instead, losses increased, like the water that bleeds into the ground through leaking pipes, or just flows 24/7 at standpipes, unmonitored. Or, the water is pumped into tankers by the mafias and then dumped so they can turn the truck around and fill it up and get paid for another trip.' Broken billing Democratic Alliance councillor Alicia Kissoon sits on the city's finance committee. She said the budget was 'polished on paper', but operationally detached. The real picture emerged in the adjustments budget, where money was 'constantly reallocated in a cycle of crisis management which is like robbing Peter to pay Paul'. R345-million for 100 new water tankers was a prime example of short-term thinking. 'Tankers do not fix leaking infrastructure. It masks a systemic failure to repair broken pipes.' Kissoon said it was unsustainable for so many residents not to pay for rates and services. The city was dealing with a 'dangerous culture of administrative neglect, contractor abuse and non-payment.' Inkatha Freedom Party councillor Jonathan Annipen voted for the budget because the city provided free services to poor residents. He praised the city's recent 'determined effort at transparency'. To 'avoid collapse', the city had to improve revenue collection, debt recovery and credit control. But, Annipen said, billing was bedevilled. 'Daily, we hear heart-wrenching stories where frail, elderly and disabled citizens have their services disconnected, and the city has no credible dispute mechanism. I intervened in the case of a pensioner who was suicidal because he was lumped with a R1.3-million monthly bill for water and electricity, but investigations revealed he was actually owed a credit. 'People wait three months for a water leak to be repaired. Water is flowing down the street by gallons and you call the contact centre, they tell you the fault has been closed.' DM
