Letter: Setback for mining sector - Business Day

30 April 2018 - The decision by Mineral Resources Minister Gwede Mantashe to challenge a high-court ruling on the once empowered, always empowered principle is a potentially serious setback for the mining industry and the South African economy. The challenge may ultimately progress all the way to the Constitutional Court. Should that happen the effect will be to inject at least another two years of uncertainty into the mining policy environment.


The decision by Mineral Resources Minister Gwede Mantashe to challenge a high-court ruling on the once empowered, always empowered principle is a potentially serious setback for the mining industry and the South African economy. The challenge may ultimately progress all the way to the Constitutional Court. Should that happen the effect will be to inject at least another two years of uncertainty into the mining policy environment.

The cost to the economy and society will be considerable.

My colleagues are soon to release a paper on the extraordinary untapped mineral wealth of our country — wealth that will only be tapped if mining companies and their shareholders have confidence to commit vast amounts of capital to long-term greenfields mining projects.

However, there is no way SA can sell such projects in a situation where no one knows how mining policy may evolve.

The government is focusing on the wrong metrics in measuring the empowerment contribution of the mining industry to the country and society at large.

The best measure of what any industry does to empower society can be found in its contributions to employment, tax payments, exports and fixed investment. These measures do far more to deliver real change to the lives of ordinary people than the narrow racial transformation objectives of the government.

These broader measures should thus be accorded a far greater weighting than racial ownership targets in determining the contribution of any industry to real empowerment.

If this approach were applied to the country’s mining industry, it would become clearer still that the new minerals minister’s legal challenge will inhibit rather than advance empowerment and societal transformation.

Frans Cronje CEO
Institute of Race Relations

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