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Little room for complacency

South Africa has just hosted the Fifa world cup, and if nothing else it reminded of how things have changed for a once isolated country. And seeing the country’s president Jacob Zuma sitting next to Fifa president Sepp Blatter attending soccer matches reminded me of another time some years ago.

From my perspective that time felt like one of greater optimism, or at least one of less apparent cynicism. Phumzile Mlambo-Ngcuka was minister of minerals and energy in South Africa and I found myself attending a sequence of mining related events, where the minister would also be in attendance. What impressed me about her was that, in a relaxed manner without large accompanying entourages, she was willing to attend even relatively low key events, to promote government policy on beneficiation, empowering women in mining, the need for empowerment and transformation in the industry, etc.

Then there was a break in the pattern. Brett Kebble, someone I knew as charming in person when unchallenged on certain points but also someone to be regarded with a healthy dose of scepticism, was trying to turn attention to the productive assets he controlled. He had just hosted journalists and other interested parties at the Letseng diamond mine in Lesotho, an asset he controlled at the time. He agreed that it would be a good idea to do some sort of event to showcase developments in South Africa at the South Deep gold mine, which he also controlled at the time.

As was typical, a high profile politician would be invited to give a keynote speech but at this event, to my surprise, it did not turn out to be Mlambo-Ngcuka who had been until then almost omnipresent at mining events. Instead it was the then deputy president Jacob Zuma who came to South Deep. I remember thinking to myself it was interesting that Jacob Zuma would be there all of a sudden and not Mlambo-Ngcuka; and in the light of all that has subsequently taken place in South Africa politically I have been thinking about that for a long time since.

With hindsight one of the mistakes made during the Mlambo-Ngcuka era was that South Africa’s Department of Minerals and Energy, as it was at the time, took the approach of not wanting to set policy in stone but rather have a mutual understanding with the mining industry as to the transformation objectives, including greater degrees of ownership by formerly disadvantaged groups. However that approach left a bit too much open to interpretation, including an assumption of mutual integrity and goodwill – unlikely to sustain over an extended period taking into account human nature. This later morphed into policy that saw too much discretion in the hands of government regarding the award of mineral rights, and too little transparency.

It has culminated in the situation where there are awards of licences being made to politically connected groups under dubious circumstances, the most outrageous being that of prospecting rights to an existing multi-billion rand iron ore mine being given to a group that I read has close connections to South Africa’s president Jacob Zuma. What is particularly disturbing is the lack of outcry from most of the mining industry’s key players. Does it mean they are afraid of the consequences should they be deemed to offend government?

Some argue that there are no innocents and many in the mining industry are not saints, which is why in many cases everyone would like to avoid washing dirty laundry in public. Should we be unduly disturbed?

Using a soccer analogy, the world cup showed, as expected, a great deal of cynical behaviour. Players dived and pretended to be injured without being touched to try to gain advantage. Players used their hands to score and prevent goals. Players committed filthy fouls and then pretended to be concerned about the person they had just injured. In a variety of ways, the tournament organiser Fifa seemed to focus primarily on its own benefit rather than that of the supporters and host country. All this is considered part of the game, and the tournament was declared a success. This was largely because the refereeing teams, though they sometimes made mistakes, were seen to be honest, and correctly so. But think what would happen if circumstances were to arise where a majority of soccer supporters were to come to the conclusion that the refereeing at such tournaments was not honest.

At the end of June 2010 in South Africa, government, labour and business signed a joint declaration on the way forward for South Africa’s mining industry. The declaration presents a strategy for the sustainable growth and meaningful transformation of South Africa’s mining industry. It has been hailed as a very positive development. Nonetheless, there is very little room for complacency.