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IOL News
2 days ago
- Business
- IOL News
Mantashe faces criticism over changes to mining law draft
Activists and experts have accused Minister of Mineral Resources and Energy Gwede Mantashe of bowing to pressure from powerful mining companies. South Africa's Minister of Mineral Resources and Energy, Gwede Mantashe, is facing strong backlash over his recent changes to the draft Mineral Resources Development Bill. Critics say the revisions favour big mining interests at the expense of communities, the environment and the national push for economic transformation. Two key changes in the updated draft have sparked outrage. The first is the removal of the requirement for Black Economic Empowerment (BEE) participation in applications for prospecting rights. The second is the scrapping of a clause that required ministerial approval when control of a listed company holding mining rights changes. Activists and experts have accused Mantashe of bowing to pressure from powerful mining companies. David van Wyk, a respected researcher in the field, questioned the minister's intentions. 'Prospecting is where it all begins,' Van Wyk said. 'Companies make millions by selling these rights after identifying valuable mineral deposits. Without BEE, transformation becomes just a word. And when companies change hands without any oversight, it makes it easy for them to dodge their environmental and social responsibilities.' Van Wyk also warned about the consequences of poor regulation in the sector. 'We already have more than six thousand abandoned mines in this country. These are environmental disasters, and the communities around them suffer the most. If the minister is not informed when ownership changes, there is no one to hold accountable when something goes wrong.' Christopher Rutledge, director of the organisation Mining Affected Communities in Action, said the changes show how the government has shifted its loyalty from people to business. 'The Bill's amendments are not about fixing technical errors. They are a political decision that turns away from the goals of transformation and accountability,' he said. Rutledge believes the removal of BEE requirements in prospecting is a deliberate decision to maintain control of the industry in the hands of the same elite. 'This ensures the same old faces keep control of the mineral wealth. It opens the door to secret deals, takeovers and asset sales, with no regard for the people on the ground or the environment.' He added that the state needs to play a far stronger role. 'Public ownership of minerals and the mining process is the way forward. The revenue should support a sovereign wealth fund that benefits all South Africans, not just a few. Right now, the state-owned mining company barely has a footprint in the sector, and no one knows how much has gone into the sovereign fund.' Trade union federation Cosatu has also raised concerns. Spokesperson Mathews Parks said the federation would engage with Mantashe to get clarity on the goals of the changes. 'Legislation must be aligned with economic transformation. We cannot afford to backtrack now.' Meanwhile, the Minerals Council South Africa has welcomed some parts of the draft but says more work is needed to support investment. Public comments on the Bill will close in August, but for now, the debate continues over whether the government is acting in the national interest or putting profits first.
The Citizen
2 days ago
- Business
- The Citizen
Concerns over Mantashe's changes to draft mineral resources bill
Mantashe's changes to mining legislation have provoked backlash for favouring the industry over public interest. Minerals and Petroleum Resources Minister Gwede Mantashe was lashed for omitting a requirement for Black Economic Empowerment (B-BBEE) participation in applications for prospecting rights. Mantashe recently gazetted two corrections to the Draft Mineral Resources Development Bill and also nullified a provision for ministerial approval for change of control in listed companies that own mining rights. Mining expert David van Wyk asked why the minister backed down. Environmental concerns 'The prospecting companies make huge profits after prospecting reports are out. They sell the prospecting reports to the highest bidder. 'We have a serious problem with the change of control in listed companies. It is what ultimately allows mining companies to walk away from their environmental responsibilities and their responsibility to close and rehabilitate mines,' said Van Wyk. 'This is why we have more than 6 000 abandoned mines. When control of companies changes and the minister, as the custodian of the minerals which, according to the Act, belongs to the public, is not informed of these changes, he is unable to assign responsibility to the owners as he will not know who they are.' ALSO READ: 'Is it greed or jealousy?': Ramaphosa fires back at critics of BEE, Transformation Fund Call for state-led mining and revenue transparency The solution to the problems of environmental and social responsibility, as well as mine closure and rehabilitation, was to establish public ownership not just of the minerals in the ground, but also of the mining process and the extracted minerals, with the state as the custodian and the revenue accruing in a sovereign fund, Van Wyk said. South Africa does have a stateowned mining company and a sovereign fund, but the share of that company in the overall mining sector is minimal. There was no account of how much money has accrued in the sovereign fund since its inception, Van Wyk said. Christopher Rutledge, director at the Mining Affected Communities in Action, said the organisation was concerned. 'Pressure of elite interests' 'Following a mere signal of dissatisfaction from the mining sector, Mantashe swiftly amended the draft of the Bill, specifically the removal of the requirement for B-BBEE participation in prospecting rights and the omission of provisions for ministerial oversight of changes in control of listed companies holding rights. 'As we have previously warned, the main purpose of the Amendment Bill represents a further retreat from the constitutional mandate of transformation, accountability and justice for mining-affected communities. 'Rather than correcting the draft Bill, the minister has capitulated even further to the pressure of elite interests, in particular the Minerals Council South Africa, confirming the extent to which the state has aligned itself with industry over people.' Rutledge said the removal of BEE from the prospecting regime was not a technical correction, but a political decision to sell-out transformation. ALSO READ: Starlink proposal: Mashatile says Cabinet holds final say on policy changes Prospecting was the gateway to mining and excluding it from transformation requirements ensures the ownership and control of mineral resources remains concentrated in the hands of historical beneficiaries of apartheid-era privilege, he said. 'This opens the door to unchecked mergers, takeovers and asset stripping with no regard for affected communities, workers, or environmental responsibilities. We reject the illusion that deregulation is a form of reform,' Rutledge said. Industry engagements Union federation Cosatu spokesperson Mathews Parks said it was critical that legislation is in sync with B-BBEE to avoid contradictions. 'Cosatu will engage with the minister to get a better understanding of the objectives of the amendments.' Minerals Council South Africa Allan Seccombe said the organisation would continue to review the Bill and submit its perspectives by 13 August. 'The Bill in its current form does not encourage or sustain the growth and investment that the mining industry needs.' NOW READ: Cosatu says debate on B-BBEE is needed for beneciaries' benefit
IOL News
6 days ago
- Business
- IOL News
BEE is at a Crossroads - But Who Benefits from Its Destruction?
BEE, as it has been implemented in too many cases, has failed to meet the aspirations of the majority, writes the author. Gumede is right to point to the recycling of beneficiaries, the political gatekeeping, and the elite capture of empowerment deals. But he is wrong, dangerously wrong, if his insight is used to argue for scrapping BEE altogether. Let me be clear: BEE, as it has been implemented in too many cases, has failed to meet the aspirations of the majority. It is a critique we cannot afford to ignore. But neither can we afford to allow this critique to be weaponised by those who have always opposed transformation, to delegitimise the very idea of economic justice in post-apartheid South Africa. The recent critique by Professor William Gumede that over R1 trillion has been 'transferred' under Black Economic Empowerment (BEE) to fewer than 100 politically connected individuals is a sobering wake-up call. It is ironic that the same voices calling BEE 'racist' rarely propose solutions to white economic over-representation. Here are the facts: 8 of the top 10 richest South Africans remain white men. Over 70% of agricultural land remains under white ownership. Access to venture capital, export markets, and finance remains racially skewed. The idea that 'BEE is the biggest scam in post-apartheid SA' dangerously distracts from the real structural crisis: the continued racial and gendered concentration of wealth. Certainly not the millions of unemployed black youth in townships and rural villages. Not the historically disadvantaged communities who still lack access to capital, land, and markets. And not the African, Indian and Coloured women who remain structurally excluded from the mainstream economy. We must ask ourselves: who benefits when BEE is destroyed instead of reformed? Reset restore all settings to the default values Done Beginning of dialog window. Escape will cancel and close the window. The only ones who benefit from the collapse of BEE are those who were never in favour of transformation in the first place the economic oligarchs who would be thrilled to return to a status quo of white dominance wrapped in the language of meritocracy. Despite limitations, BEE is not a failure: Over 6 million black South Africans now hold direct or indirect ownership in companies through broad-based share schemes (e.g. MTN Zakhele, SASOL Inzalo, Phuthuma Nathi at MultiChoice). Black ownership on the JSE has grown from less than 1% in 1994 to an estimated 25–30% today (direct + indirect via funds and B-BBEE schemes). Over 50,000 black-owned SMEs have been supported via enterprise and supplier development obligations. BEE has enabled the creation of black industrialists, catalysed youth training schemes, and expanded procurement access. The BEE scorecard includes ownership, skills development, employment equity, socio-economic development, and procurement. It is a multidimensional framework, not simply elite enrichment. However now that we know better , we must do better. Acknowledge the Failures, But Don't Abandon the Mission As a former Member of Parliament and lifelong activist for social and economic justice, I have seen first-hand how some BEE deals were little more than rent-seeking schemes. Politically connected figures often acted as fronts for white capital, offering legitimacy without empowerment. These are not just moral failings they are strategic betrayals of the people. But the answer is not abandonment. It is reform, accountability, and reorientation toward true broad-based empowerment. We must ask: What models have worked? What does inclusive, community-rooted BEE look like? And how do we ensure that BEE no longer becomes a revolving door for the same elite, but instead a ladder for the many? What Broad-Based Empowerment Really Looks Like The idea of broad-based empowerment is not hypothetical. I have checked ,it actually exists though often drowned out by the noise of scandal. Let us spotlight real, replicable models that show us what is possible. 1. Sasol Inzalo Trust (2011) – R26 Billion Empowerment for the Public One of the largest and most ambitious empowerment transactions in South African history. Over 200,000 South Africans from nurses to pensioners acquired shares in Sasol via the Inzalo Trust. This was not an elite project, but a mass participation vehicle offering dividends, ownership, and dignity. Yes, the deal had flaws (especially when Sasol's share price dropped), but the intent and structure were inclusive. We must learn from and build on this. 2. Absa Employee and CSI Trust (2023) – A New Vision for BEE In 2023, Absa created a model that should become the new gold standard. It allocated 7% of its ownership to: 3% for over 35,000 employees; 4% to a Community Trust focused on healthcare, education, and township upliftment. This is real empowerment linking productivity with ownership, and profit with community reinvestment. 3. PepsiCo / SimbPioneer Foods (2020) – Worker Trust PepsiCo's merger with Pioneer Foods resulted in a R1.66 billion worker trust benefiting over 12,000 employees 90% of whom are black. It wasn't politically brokered. It was structurally designed to include workers at scale. 4. Heineken's 'Bokamoso' Trust (2021) When Heineken acquired Distell, it was required by the Competition Tribunal to create a broad-based employee share scheme. 'Bokamoso' gave 6% equity to workers a model where empowerment was made a regulatory condition of doing business in South Africa. These are not isolated cases. They are models for the future evidence that BEE can work, and work for the people. Why can the JSE Top 100 Listed Companies not follow this and give shares to their workers, their customers and communities they serve? B-BBEE That Serves the Nation, Not the Network For BEE to be legitimate, it must: Stop recycling elites: No individual or consortium should benefit from more than one major BEE deal. Impose sunset clauses: Empowerment credentials must expire after a certain period. Create a National BEE Beneficiary Registry: All deals and beneficiaries must be publicly disclosed and tracked. Mandate community participation: At least 30% of all future equity deals must be routed through community trusts, worker funds, and township co-operatives. Align with the District Development Model: BEE must build local economies not extract value from them. We must turn BEE into a mechanism for building black productive capacity, not just redistributing shares. That means more funding for black industrialists, township-based manufacturing, rural cooperatives, and tech-enabled youth entrepreneurship. A Call to Action: Reclaim Empowerment from the Few, for the Many To comrades, policymakers, business leaders, and community activists: we are at a crossroads. Either we allow the failures of the past to paralyse us or we reclaim the transformative promise of BEE and remake it to serve all who were historically disadvantaged: Black Africans, Coloured South Africans, Indian South Africans, women, youth, people with disabilities, and the rural poor. I call on the ANC to: Codify a new generation of community-based empowerment deals Reject individual-based enrichment without public impact Strengthen the oversight powers of the B-BBEE Commission Incentivise cooperatives, worker-ownership, and community reinvestment We must restore the moral authority of economic redress by placing THE PEOPLE not political patrons at the centre of empowerment. Conclusion: Build, Don't Burn Professor Gumede has done us a service by exposing what went wrong. But let us not allow this moment to be hijacked by reactionaries who wish to dismantle BEE altogether. Let us not abandon the house of transformation because the roof leaked. Instead, let us rebuild it, repair it, and expand it, so that it shelters all South Africans who have for too long lived on the margins. We don't need to scrap BEE. We need to liberate it from the few and make it finally work for the many. That is the real empowerment and economic justice we must fight and struggle for. This opinion piece was first published in ANC Today * Faiez Jacobs is a former MP, Public Policy Strategist and Advocate for Economic Justice ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.
IOL News
13-06-2025
- Business
- IOL News
Cosatu defends B-BBEE policy amid criticism from Solidarity and FMF
The Free Market Foundation and Solidarity held a media briefing on Thursday to discuss the impact of Black Economic Empowerment legislation on the economy. Image: Supplied Banele Ginidza The battle for the scrapping of "race laws" in South Africa went a notch up on Thursday as the Congress of South African Trade Unions (COSATU) shot down a call to review and drop South Africa's Broad-Based Black Economic Empowerment (B-BBEE) policy. This comes as trade union Solidarity and the Free Market Foundation (FMF) on Thursday released a report claiming that B-BBEE has caused serious damage to the country's economy and to its population while only enriching a small, politically-connected elite. The report draws on data from the B-BBEE Commission, Stats SA, the JSE, and international comparisons to assess the real costs of compliance across the key BEE scorecard elements: ownership, skills development, enterprise and supplier development, management control, and socio-economic development. According to the report, the annual cost of BEE compliance is between R145 billion and R290bn per year. It claimed that this has resulted in an annual reduction of 1.5% to 3% in economic growth, and to an annual loss of between 96 000 and 192 000 jobs. 'Our findings show that BEE, as currently designed, is enriching a small elite while throttling economic dynamism and deepening unemployment,' said Dr Morné Malan, FMF senior associate and co-author of the report, speaking at the joint press conference. The study compares South Africa's model with global 'affirmative action' policies in Malaysia, India, Brazil, the US, and Namibia, showing that South Africa's version is the most intrusive and economically damaging. At the media briefing, the organisations claimed that B-BBEE benefits largely captured by politically-connected elites as South Africa now ranks 139th in GDP per capita, down from 87th in 1994. Executives of both organisations said the people most affected by the current economic programme are people that work poor people and those that are beneficiaries are the elite. "That is why we will engage with Cosatu trade unions Numsa and others to find alternatives to the current racial legislation," said Theuns du Buisson, economic researcher at the Solidarity Research Institute, and co-author of the report. "In the second place we will continue to litigate and in the third place we will also put pressure on SA via the international world and continue to put pressure on South Africa with the outside world especially the G20 that comes." However, Cosatu's Parliamentary spokesperson Matthew Parks said the report provided no breakdown backed up by actual research as to any financial burden to the state nor how B-BBEE has been an obstacle to growing the economy and reducing unemployment. Parks said the report strangely cited statistics related to real and potential growth overall, but no evidence of the relationship between those and B-BBEE. He said it may as well have blamed constitutional democracy for South Africa's economic challenges. "No reference is made to the need to overcome our still prevalent racial divides as evidenced by countless employment equity studies confirming that most senior positions in the private sector are held by White males or that economic ownership, including shares on the JSE remain largely White-held," Parks said. Johann Rossouw, an economist at Altitude Wealth, said a more sensible empowerment model as an alternative to B-BBEE policies was Black Economic Skills Transfer (BEST), which would help with job creation and carry the economy into the future. "At the moment all the arguments are about how many ways to cut the existing pie instead of growing the pie that we have for the future. Black empowerment is not a policy of the government of national unity," Rossouw said, commending that the study was evidence based and drew comparison with other countries. "It is important that the GNU makes its own policies that will benefit the average poor." However, independent economist Duma Gqubule said the study and the report was fake news on steroids, which lacked the fundamental understanding of the objectives of transformation. Gqubule said the report lacked empirical evidence and was premised on companies counting upskilling workers for an example as a transformation contribution when both the worker and the company benefited from the exercise. "I would call on black business to come up with a coherent response to this. It is a dangerous agenda. We need another citizen dialogue on black empowerment for the new circumstances as the situation in the 1990s when the policies were crafted were critical," Gqubule said. BUSINESS REPORT
Eyewitness News
12-06-2025
- Business
- Eyewitness News
Job creation has been minimal in SA since democracy, claims Solidarity
JOHANNESBURG - Minority lobby group, Solidarity, claims that job creation since 1994 has been minimal, largely due to Broad-Based Black Economic Empowerment (BBBEE) policies. Solidarity, in collaboration with the Free Market Foundation (FMF), has released a new study outlining the costs associated with BBBEE compliance. Their findings indicate that these policies have contributed to rising unemployment and have hindered significant economic growth since 1994. Solidarity CEO Dirk Hermann argues that a complete overhaul of the BBBEE policy would be more beneficial for the country. 'Black Economic Empowerment does not address inequality. It increases as a result of the policy. The paradox is that inequality increases particularly in the black community as a result of a small group of elites, who are being radically enriched.' Speaking to 702 , prominent businessman Saki Macozoma said BBBEE remains necessary for transformation. 'Empowering people who are previously disadvantaged is the right kind of thing. It may be that the terminology of Black Economic Empowerment is the one that creates the emotion. The fact of the matter is that we need to have the redress, and we have not done it to the extent that we should have.' ALSO READ:
