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Mining industry found wanting in BEE commitment

Chamber of
Mines CEO
Zoli Diliza
 
Johannesburg, South Africa —MININGREVIEW.COM — 12 April 2010 – A DRAFT five-year review of transformation in the South African mining industry has raised questions about the sector’s commitment to placing a portion of its wealth in the hands of black South Africans.

Miningmx.com reports that the 29-page draft, which was leaked to City Press Business, shows a continued marginalisation of blacks in the R2 trillion industry five years after a mining sector charter was signed to redress its skewed ownership and control.
 
The mining industry was found wanting in almost all the key indicators of transformation such as black ownership, skills development, employment equity, preferential procurement, mining community upliftment, housing and living conditions, and mining beneficiation.

The initial findings of the review, sanctioned by the mineral resources department (DMR), about the low level of transformation in the mining industry are likely to fuel calls by ANC Youth League president Julius Malema to nationalise mining companies, according to miningmx.com.

The report, marked “strictly confidential”, shows that 9% of the industry was in black hands last year, some distance from the 15% target set by the mining charter.

The industry has set a target to transfer 26% of ownership to blacks by 2014, a daunting task unlikely to be met in the next five years, mainly because of the scarcity of funds in the wake of the recession. The authors of the review recommend that the implementation period be extended to 2019.

“It is abundantly clear to us that the pace of transformation in the mining industry is far off the mark and that we have a very long way to go before the industry is de-racialised,” said DMR spokesperson Jeremy Michaels.

He said government would continue to engage with business and labour to address the matter.

So far black economic empowerment deals worth R200 billion have been concluded. According to the review, historically disadvantaged South Africans “’ which includes white women or black-owned companies “’ got a meagre 3% slice of the mining industry’s total procurement pie. In 2008 the industry spent R199 billion on goods and services.

The report finds that roughly 26% of mining firms have achieved the target of having 40% black representation at management level. Many companies in the sector have a 33% black representation in their upper echelons. But the review says a large number of black managers are in middle management and very few are in key decision-making positions.

About 26% of mining companies have complied with the 10% women participation target.

“However, less than 1% are in core management positions,” the report adds. The report also expresses concern at the lack of investment in the development skills among historically disadvantaged South Africans. It also notes that the industry has not fared better when it comes to uplifting mining communities.

Chamber of Mines CEO Zoli Diliza pleaded ignorance about the draft report. “I have not seen the draft report and I don’t even know which facts have been substantiated or verified,” he said.

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