EDITORIAL PAGE — Mining in the new South Africa

Mining is a cornerstone of the economy of South Africa, so it is not surprising that diverse interest groups within the democratically governed country are debating the formulation of a national mining and minerals policy.

The ruling political party, the African National Congress (ANC), has already published its policy document, as has the state’s department of Mineral and Energy Affairs. The ANC, which describes the last 10 years of apartheid and international isolation as a decade of “missed opportunities,” has proposed changing the legal framework for control of mineral rights from private hands to the public domain in order to foster mineral exploration and the possible creation of new mines. By adopting policies that are more in line with the Canadian and Australian models, the government hopes to stimulate a junior mining sector and usher in technology that will lead to the development of medium- to small-scale mines. No argument here.

The government also has social goals, which it hopes to achieve, in part, through the wealth generated by mining. At the same time, labor groups are seeking policy changes they believe will improve the working conditions of South Africa’s black miners.

In response to all this, South African mineowners released a 31-page document that outlines their views on the most desirable approaches to future mining and minerals policy, including the role of government and commentary on human resource, environmental and other issues. It examined various difficulties currently besetting the gold mining industry, which is still, by far, the country’s most important minerals sector. Furthermore, the document cautions policy-makers that the gold industry as a whole is at a “watershed,” and that future policy decisions and choices should take careful account of this.

Upon its release, the document drew immediate and widespread media attention, including criticism to the effect that it represents a bid by mineowners to preserve the status quo, or to persuade government to adopt a “hands-off” attitude to mining.

This charge is strongly refuted by Dr. Nick Segal of the South African Chamber of Mines, who says critics failed to grasp — or else chose to ignore — the full content and intent of the document. He insists that mineowners are as convinced as any other stakeholder “of the need for policy flexibility in seeking to devise and implement sensible responses to the many challenges being faced by the gold mining sector.” However, the document points out that securing general improvement requires that all parties take pains to appreciate the industry’s current difficulties and inherent constraints.

These constraints are real. About 30% of South African gold production is classed as “marginal.” Most producers have been hit hard by increasing production costs, lower productivity, and current work restrictions which, they say, force them to be unproductive for up to 18% of the year and make it difficult to cover fixed costs.

The mineowners’ call for co-operative action was substantiated with a proposal to create a new, statutory minerals advisory council that would serve as a forum for ongoing policy debate.

This approach is worthy of support by all parties who are sincerely working to create a progressive policy framework that serves the mining industry and the long-term national economic interest.