Executive director
of J&J Group,
Michael Solomon
Johannesburg, South Africa — 07 November 2012 – The violent deaths of 34 protesting miners at the hands of the police at Lonmin’s Marikana platinum mine in August has been labelled “a massive failure of government and corporate policy”.

Miningmx reports that, speaking at the Junior Mining & Exploration conference here, prominent mining industry players said the failure of local government, national government policy on mining and corporate policy had combined into social discontent that was not a surprise.

“The worst thing about Marikana is that it was so completely predictable,” said Mike Solomon, executive director of J&J Group and a former CEO of Wesizwe Platinum, who was also involved in helping to formulate South Africa’s minerals legislation in the nineties. “South Africa was 10 years ahead in its mining policy, but now it finds itself overtaken,” he added.

Peter Leon, head of Africa Mining & Energy Projects at attorneys’ firm Webber Wentzel said the social discontent currently expressed in the wave of strikes in the mining sector was rooted in the way minerals legislation, the Minerals and Petroleum Development Act (MPRDA), was framed.

“The legislation did not promote broad-based empowerment. It is quite possible for a mining company to sell shares to a group of wealthy black business people, but there is no obligation to broaden it,” he said. “Broad-based BEE should be mandatory.”

Both Solomon and Leon warned about the perils of significantly altering mining legislation as contained in a government-backed State Intervention in Mining (Sims) report, completed about a year ago and which recommended steps such as a resource rent tax.

However, Nchakha Moloi “’ executive chairman of Motjoli Resources, and a member of the Mineral Resources Department shortly after promulgation of the MPRDA “’ said South Africa should follow the lead of other African nations where more sweeping legislative changes were underway.

“Compromise and consensus has weakened South Africa,” said Moloi.“We need a new approach and agreement that dispenses with the ‘feel good’ factor of compromise, as that doesn’t deal with the real issues,” Moloi added.

Michael Spicer, vice-president of Business Leadership SA, said there had been too much blame-mongering in the wake of Marikana, and disputed Moloi’s call for the abandonment of compromise.

“Compromise and consensus is part of the social compact,” he said, recommending improvements in productivity as a means of retaining and growing jobs, providing Government with greater access to rents, and improving the trading margin for mining companies.

Policy uncertainty in South Africa’s mining industry was systemic as there were competing economic policies more broadly in the South African Government, he added.

“The mines minister has a view but her colleagues are operating in a different universe, never mind a different world,” Spicer said.

Source: Miningmx. For more information, click here.