IRR presents Ramaphosa with facts on BEE in mining

The Institute of Race Relations (IRR) has written to President Cyril Ramaphosa challenging his recent remarks about the impact of Black Economic Empowerment (BEE) on the mining industry. 

In response to a recent question in Parliament, the President reasserted his support for the application of BEE in mining, dismissing analysis showing BEE’s contribution to the decline and decimation of the industry as a “fallacy”. President Ramaphosa lauded the application of race-based ownership regulations on mines, but without offering any evidence that without them, current black ownership levels of mines would not have been achieved. 

The IRR's letter, penned by Head of Policy Research, Dr Anthea Jeffery, provides data on the correlating facts that reveal how laws such as the Black Economic Empowerment Act and the Mineral and Petroleum Resources Development Act (MPRDA) have affected mining. Dr Jeffery explains how the industry’s 20-year decline can be reversed should the government adopt the IRR’s draft Growth and Employment in Mining Bill. 

In the letter, the IRR laments mining’s having become a shadow of its former self, attributing this fracturing of a once titan industry to the complex regulatory environment in which it has been compelled to operate. Mining’s share of GDP has fallen from 21% in 1980 to only 7% today, with some 47,000 jobs being lost in the sector between 2001 and 2024. Investors have channelled their exploration expenditure to countries that are not hostile to them.

Regulations such as the MPRDA and BEE have been fingered as key culprits in the hollowing out of the industry through the former’s vesting of mineral rights in the custodianship of the state and the latter's racial ownership and management targets. These laws, which introduce hurdles investors do not have to encounter elsewhere in the world, erode property rights and increase government control over the industry. It is no wonder that investors have voted with their feet to pursue business and deliver jobs elsewhere.

This is corroborated by the responses of investors in reputable surveys of mining attractiveness, such as the global Annual Survey of Mining Companies by the Fraser Institute. According to one mining executive cited in the 2025 Fraser report: “Affirmative action and enforcement of Black Economic Empowerment (BEE) shareholding, the conduct of members of parliament, and the conduct of officials at the Department of Mineral Resources (DMR) – with many horror stories covered in local and international press – act as deterrents to investment.”   

The IRR challenges Ramaphosa's claim that BEE mining deals have benefited South Africans beyond the politically connected elite whose interests it has mainly advanced, often at the expense of impoverished people whose jobs are on the line. Dr Jeffery points to a 2015 report showing that only 46 BEE entrepreneurs benefited from the deals that increased BEE ownership to 38% by 2014. These so-called entrepreneurs gained 310,000 times more than some 6.9 million community members, while costing the industry the investment that delivers jobs, development and growth.

As noted earlier, the IRR recommends the adoption of its Growth and Employment in Mining Bill. Among other things, this bill renders irrelevant the racial identity of any mining-licence applicant, and instead prioritises their technical capacity and financial resources to develop and operate a mine, comply with safety, health, and environmental obligations, and rehabilitate all affected areas prior to closure.

The more investors are allowed to operate, the greater the number of jobs that will be created and the higher the levels of economic growth. With this in mind, the Bill also enforces a 90-day rule as the period within which any legitimate application for mining rights must be granted by the minister, failing which a licence is automatically granted. By this measure, more mines would be able to operate with limited bureaucratic discretion, and the scope for corruption would be curtailed.

Media contact: Makone Maja, IRR Strategic Engagements Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za