AFRICANGLOBE – South Africa’s mines minister Ngoako Ramatlhodi said he was considering declaring certain minerals such as coal and iron ore as “strategic” for the country.
“We haven’t classified any, but it is provided for under the mineral bill, which is before the president. If that bill is signed into law, then it will give the minister the ability to declare certain minerals strategic for purposes of industrialisation in South Africa,” he said.
Under the bill, such minerals “will be sold for production costs excluding transportation. That is the mine-gate price. And the industry is comfortable with that, because they negotiated that formula,” he said.
He would not be drawn categorically on what he will declare strategic but said, “Iron ore is obvious and coal, because coal fires our power stations.”
He added, “There is coal for export and coal of a lesser quality, which stays in the country. That we would want to keep for our power stations.”
Companies that could be affected include Kumba Iron Ore, which is a unit of Anglo American, and mining companies Exxaro and BHP Billiton.
Ramatlhodi dismissed reports that a forthcoming meeting between Russian and South African officials would lay the groundwork for an OPEC-style platinum cartel between the nations, which account for about 80 percent of global production of the precious metal.
He would rather see the industry and private sector find ways to support the platinum price, which recently hit five-year lows and is a major export earner, he said.
“How that is regulated I don’t think should be through the law, it should be through the industry, it needs to do certain things to protect itself. They must begin to collaborate in how they operate,” he said.
The price has remained low despite a five-month strike earlier this year in South Africa against the world’s top three producers of the metal, Anglo American Platinum, Impala Platinum and Lonmin.
Auditing The Charter
Meanwhile, Ramatlhodi said he was forming teams of representatives from companies, labour and the government to audit the mining industry’s compliance with rules under the mining charter.
The charter aims to address disparities rooted in the apartheid past, including a 2014 target of 26 percent Black ownership of companies. A final assessment of the industry’s compliance is expected by March of next year.
All three sides would have their input in the teams before the final outcome is unveiled, and the use of such teams will help “control outcomes and to remove tensions”, the minister said.
Mining companies that fail to meet the deadline can face fines and other punitive measures.
Ramatlhodi said the teams will accelerate the process of charter auditing, which he complained had been too slow.
One area of industry concern has been the possibility that the 26 percent Black ownership target could be raised, but Ramatlhodi said this was not the current policy of the ruling African National Congress.
“We have not developed a policy that says we should change the targets,” he said.
By: Zandi Shabalala And Ed Stoddard