Opinionista Onkgopotse JJ Tabane 19 October 2015

Dear Minister Mosebenzi Joseph Zwane, let’s talk frankly

I don’t buy the story that your appointment was influenced by the Guptas. Your appointment was a political accident occasioned by the firing of Ngoako Ramatlhodi.

Tabane is the author of Let’s Talk Frankly: Letters to influential South Africans about the state of our nation

I can spot a firing when I see one. I hope this makes you understand what buttons you can and cannot press as you dabble in one of the most untransformed industries in our time. You may want to start by divesting any interests you may have in the industry to avoid the kind of conflict of interest that seems to have sunk your predecessor. Oh and do start making that obligatory phone call to Bridgette Radebe. While like me you dream of a utopia of change in the mining industry please understand that no minister has ever managed to successfully cancel any mining licence since 1652. Ramatlhodi would have been the first and look how it all ended. So buckle up for a roller-coaster ride with the masters of the status quo from all sides of the political and economic divide.

Quite frankly, you will need at least a year to familiarise yourself with the industry, as we know that you have not had the intimate privilege of working in the sector. Hitting the ground running is what cost Ramatlhodi his job. Within three minutes of being there he got involved in trying to resolve a five-week-old strike – it didn’t end too well. So don’t make the same mistake. Give distant support to the wage disputes by making the right noises about the needs of the economy. Government should frankly not get involved in strike disputes – look at what happened in Marikana. Try to come up with a better script than saying ‘the economy is sick’ though. But look, jealous down, congratulations are in order. Ministerial appointments have eluded the likes of comrade Enoch Godongwana, who has been at the centre of economic policy for the African National Congress for years. The fellow still owns a suit he bought en route to Cape Town when there was a rumour that he was going to be finance minister. You on the other hand were appointed so quickly that you had no time to go shopping for a decent suit for your swearing in, I digress.

But let’s talk frankly, you are here now and we have learnt that these days we have to work with whatever die Umsholozi casts. So, what is in your in-tray comrade?

You are faced with a multi-trillion-rand industry that is neither willing or able to transform itself. This is an industry that is situated at the heart of any dream of economic freedom. We can’t even afford to buy them out of change. Apparently if we were to follow the ideal of the Freedom Charter for the nationalisation of mines, we will need some R13-trillion. Now since Julius Malema can’t count, you are now left with the trouble of finding the warm and fuzzy balance between his imbecilic proposition to nationalise mines and the dire need to have real control of the minerals through, among other ideals, beneficiation. I know that so far beneficiation is more like a slogan. But if it is to be achieved someone must champion it seriously.

The minerals legislation includes provisions that will ensure that the minister of mineral resources promotes the beneficiation of minerals in the republic. You must know that government has gone further to name beneficiation as a priority for job creation and economic growth, with beneficiation being one of six focus areas in the New Growth Path, which aims to create 5-million new jobs by 2020. To do this we need to have key resources in place, in large quantities, in the areas of capital, power, infrastructure, skills and education, if we are to take beneficiation as a strategic driver from paper tiger to economic reality.

Secondly the mining industry, which contributes around 7% to South Africa’s gross domestic product (GDP), is currently grappling with a perfect storm, in the form of plummeting commodity prices, declining productivity, and labour unrest, all of which does not bode well for the possibility of impending mine closures and a looming bloodbath over jobs. Do go over Ramatlhodi’s memorandum of understanding with the industry carefully. Don’t rush to endorse it uncritically as we don’t want you fired prematurely. The economy is already bleeding and the industry players are exhausted with all the demands made on them to keep jobs. The unions are crying murder and no one has been able to explain to them so far why they must now be dealing with a new minister.

You are inheriting an industry in crisis: With the growth of South Africa’s secondary and tertiary industries, as well as a decline in gold production, mining’s contribution to South Africa’s GDP has declined over the past 10 years. Historical values of the gold index show the extent of the drop in production. In January 1980, the index was 359,0, while the volume of gold produced was far lower in January 2015, resulting in the low index of 48,4. In other words, South Africa produced 87% less gold in January 2015 compared with the same month in 1980. South Africa will soon need to look beyond the precious metal as a major resource and wake up to the reality of the country taking a much reduced role on the global mining stage.

Finally black economic empowerment (BEE) in the mining industry has all but failed. The Marikana tragedy exposed the fact that there is not much going on in the way of change. The most painful thing is the living conditions of workers followed by fake ownership and the unravelling of what amounts to a get-rich-quick scheme. In 2003 the industry was up in arms when your predecessor Phumzile Mlambo Ngcuka suggested so-called mining royalties. They were frothing at the mouth and billions left the country in the worst capital flight South Africa has ever seen. This was at the mere suggestion that blacks may end up owning 50% of the mining largesse. You can imagine the catastrophe that would happen if the Economic Freedom Fighters’ nationalisation lunacy can ever came to pass. So any BEE revision should be approached with the kind of finesse you can only learn on the job.

I pray that you surround yourself with people who can decode the dynamics of this bastion of white monopoly capital so you can achieve the balancing act a minerals minister requires to succeed. Your predecessor did his best, but you need more than hard work to make it in politics. Otherwise If I were you I would avoid Saxonwold for a while until the dust settles. Many still believe your strings will be pulled from there. But as I said, I don’t buy that at all. Wishing you well, minister. As your predecessor once said: “Good luck to you and good luck to South Africa.”

Yours Frankly,

Onkgopotse JJ Tabane



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