HomeBusiness and policyMinerals Council needs to change its Mining Charter strategy

Minerals Council needs to change its Mining Charter strategy

Trade union Solidarity has noted concerns the Minerals Council South Africa has regarding certain sections of the revised Mining Charter, specifically those sections dealing with new cost items that have been built into the new charter.

More specifically – the 5% free carried interest when it comes to shareholding by employees and mining communities.

Solidarity General Secretary Gideon du Plessis explains:

“We share the Mineral Council’s concern about ‘new forms of taxation’ that have been built into the Mining Charter, but Solidarity blames the outcome of the negotiations mainly on the council’s sluggish and short-sighted approach to talks.”

Du Plessis contends that the cracks in the council’s stance started to show up during the 2015 gold negotiations already, mainly due to a lack of strategic thinking when it comes to major negotiations.

This lack has just become even more pronounced during Mining Charter negotiations.

“The council’s participation in negotiations was not proactive enough and one left the task team’s feedback sessions without being able to tell whether the council was in favour of or against task team proposals,” adds Du Plessis.

Solidarity says it is absurd that the council is now expressing unease over the 5% free carried interest shares being granted to employees and communities respectively, as the council had weakened its own position through its poor negotiation.

“The agreement reached by all parties in the task team was for 3% free carried interest for employees and communities. At the principals’ feedback session on 10 April 2018 the Minerals Council raised no objection to 3%. At a follow-up session of the task team we had to learn, though, that the council had suddenly changed its position to 1% free carried shares,” explains Du Plessis.

In response, with trade union support, government shifted from the agreed 3% to 5% owing to the council’s negotiations in bad faith.

It is, however, important to take note that in its revised position, the Council did agree to the free-carried share principle that they are now protesting against,” continues Du Plessis.

Solidarity encourages the Council to change its strategy at the forthcoming mining summit and to proactively participate in the negotiations.

However, it seems that it could be too late to make any significant changes. Du Plessis argues that if the Minerals Council had a counter-proposal for an alternative employee scheme such as a profit sharing model, they should develop this model and present it.

“It is clear that criticism of the free-carried model won’t lead to a new model,” says Du Plessis.

In addition, Solidarity has called on the Council to learn from its mistakes and not to be so inept at the start of the gold negotiations next week.