Mining Charter: SAFTU demands nationalisation

The South African Federation of Trade Unions has noted the publication of the latest draft mining charter, but sees no possibility, at a time when the industry is its deepest crisis and bleeding thousands of jobs, that it will do anything to transform ownership of the mines, or to improve the lives of mine workers and mining communities. 

In the context of this catastrophe in then industry, the debate around the new mining charter is like discussing how to rearrange the deckchairs on the Titanic. Faced with falling profits, and the danger of the entire industry sinking, the mine owners will not only resist any serious moves towards transformation or to benefit workers and communities but will try to make them pay the price for a crisis of their own making.

In 1980 mining created 21% of South Africa’s GDP. Today that figure has fallen to 7%. In 1987, it employed 763,000 people, today 447 000, a drop of more than 40%. Since 2014, the sector has lost 30,000 jobs and this figure has kept rising in 2018. 

The gold industry alone has already lost 68 000 jobs over the last thirteen years, with 4,000 of those jobs lost in just the past two years. Output from gold mines has plummeted from 1,000 tonnes in 1970, when SA was the world leader in gold production, to 138 tonnes in 2017, putting in sixth place in world.

Ever since the white colonial capitalists began to plunder the country’s mineral resources 150 years ago, they have ruthlessly exploited our natural wealth and cheap labour. They have exported our gold, diamonds, iron ore, coal and platinum to make quick profits rather than beneficiating them to build local manufacturing industries. 

They ruthlessly stole African people’s land and forced black migrant workers off their land, and to risk their lives in dangerous and unhealthy mines.

They had to live in foul single-sex hostels and worked for as much as two years before being allowed to go home to their families. Thousands died in accidents and hundreds of thousands from diseases contracted in their work. Communities have seen their land poisoned and polluted.

Yet now, when world market prices are falling, these same exploiters are closing mines, retrenching thousands of workers and condemning communities to desperate poverty and environmental devastation. 

The charter’s minimal additional requirements for companies to qualify for mining licenses will still leave the industry overwhelmingly owned and led by white monopoly companies with a few crumbs to be shared between black shareholders, workers and communities.

Transformation, BEE, workers’ living standards and community development are bottom of the bosses’ of the mining companies’ priorities, yet they are still objecting to some these proposals, based on the argument that they will lead to less investment in the industry.

Their attitude was starkly exposed in 2017 when a previous draft mining charter was presented by the now discredited former minerals minister Msebenzi Zwane, which demanded that in order to be granted the right to mine, companies must raise “black ownership” levels from 26% to 30% within a year.

The mine bosses exploded with rage. The Chamber of Mines threatened to sabotage the entire industry to prevent minor, cosmetic changes which would still leave the industry’s racial demographics nowhere close to those of the country as a whole.

Just how far this is from full BEE is seen from the demographic statistics in the 2011 census figures showed that the population of South Africa consists of Africans 76.4%, Whites 9.1%, Coloureds 8.9%, and Asian 2.5%. 

The new draft now presented by Gwede Mantashe sticks to 30% ownership threshold. These shares must be then be divided between black entrepreneurs, who will take 14%, employees who will get a derisory 8%, and communities an insulting 8%. The only new requirement, which the mine bosses are already resisting is that at least 60% of the shares owned by communities and qualifying employees must not be sold but be given for free. 

The Minerals Council South Africa already says that “The industry does not favour a requirement of 10% ‘free carry’ on new mining rights as part of the proposed 30% BEE equity ownership target, as it would render uneconomic a significant proportion of potential new projects, and would undermine and constrain any prospects for growth in the sector and indeed the economy as a whole”.

The new draft make further concession to the employers by extending the time for companies to comply with the 30% requirement from one year to five. It also allows companies which were previously compliant to receive credit even if they have subsequently fallen below that level.

As SAFTU said of the Zwane draft charter: “The 30% rule in the new Charter, like the government’s narrow BEE policy will still leave us with an “Irish coffee” industry, with the black workers at the bottom, below a white layer of executives and shareholders and just a sprinkling of BEE chocolate on top representing the likes of Motsepe, Ramaphosa, Sexwale, etc.”

While pro-business commentators keep preaching the need for “inclusive growth” the message has obviously not reached the mine moguls who are desperately trying to exclude the country’s majority population. They are confirming in practice that there really are white monopoly capitalists who want to stop even the most minimal steps to transform their industry. 

The new draft charter is also very unclear as to how, or even whether, these minor concession to employees and communities will be implemented, who will represent these important constituencies and who will actually benefit.

As Neil Overy, a researcher for Oxfam, has written: “It is not clear how these 8% distributions will be calculated, as many host community members are also employees. In addition, there is no explanation of how community trusts are to be managed as the previous draft’s intention to introduce a mining transformation and development agency to manage community trusts has been excised.”

The danger is that employees’ shares will be awarded behind the scenes to sweetheart unions and the communities’ shares to local chiefs.

The requirements for employment equity in the new draft also fall short any serious move towards transformation. Every mining company must achieve a minimum of 50% black people (20% of which must be black females) as directors and top managers, a minimum of 50% of black employees (of which 20% must be black females) in senior management, a minimum of 60% of black employees (of which 20% must be black females) in middle management and a minimum of 70% of black employees (of which 25% must be black females) in junior management.

Top management will thus continue to be biased in favor of whites and males; even at the lowest level the figure falls short the national demographics.

SAFTU’s underlying objection to this new draft charter is not just to the detailed proposals, paltry as they are, but the delusion that even these requirements will be complied with in a crisis-riven industry owned and run by private companies and shareholders who are only interested in the bottom line. Any restrictions on their right to make profits will be a further excuse to invest even less in the industry.

They regard workers’ demands for higher pay, communities calls for money for houses, schools and hospitals, the country’s insistence on reduced pollution of the environment and the long-term future of the South African economy as ‘government interference’ in their right to do business.

Their argument about the need to secure investment in the mines is shared, not surprisingly, by a government led by a mining tycoon who connived with the capitalist state to slaughter workers demanding a living wage to improve their pitiful working conditions. He is deluded into believing that mining is a ‘sunrise’ industry, which, he hopes, will attract $100 billion in foreign investment into South Africa in the next five years.”

It is more surprising that the mineral resources minister - communist and now ANC National chairperson, Gwede Mantashe, - should see the solution to the mining crisis as increasing investment from big business.

It is further proof of the degeneration of the ANC, which in 1955 included the demand in the Freedom Charter for “the mineral wealth beneath the soil, the banks and monopoly industry to be transferred to the ownership of the people as a whole”, and at in its own Consultative Conference held in Morogoro in 1969, which said:

“In our country - more than in any other part of the oppressed world - it is inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole. It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy. To allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation.”

Even as recently as 2007 the ANC Polokwane conference resolved to nationalise the mines, banks and other strategic monopoly industries.

Yet the ANC government has produced a mining charter which still imagines that the only way to revive the industry is attracting investment from the very capitalist monopoly companies which are responsible for its crisis.

This is why SAFTU demands the nationalisation of the mining industry, along with the banks, the land and big industrial monopolies, to take ownership out of the hands of the white monopoly capitalists who have wreaked such damage on workers, communities and the economy.

The mines are a national resource, not just a commodity to be rented out to the highest bidder, who can close mines and retrench workers just because of fluctuations in the world market prices. They are a central component of our national infrastructure, mining the coal that generates power, and the ore that makes steel, without which a re-industrialised economy will be impossible to achieve.

They must be publicly owned, run and developed as part of a democratically planned industrialised economy which beneficiates rather than exports our mineral wealth so that it can create jobs and raise the living standards of all South Africans.

It is essential however that we do not get a nationalised mining company like today’s Eskom, Transnet and SAA that have been bankrupted by corruption and mismanagment. They have been wrecked because their bosses adopted, in an extreme form, the morality of capitalism - the pursuit of wealth for those at the top, corrupt deals and abysmal service to customers.

This has discredited the whole idea of nationalisation, which is why we have to popularise, and mobilise for, the demand for a new form of nationalisation in which industries are democratically controlled from the bottom up by representatives of workers and communities, to whom top officials are fully accountable for implementing mandates.

This is the only answer to the crisis which has arisen from this new Mining Charter’s minimal advances towards a narrow format BEE, the hysterical threats of an investment strike by multinational mining monopolies, which have powerfully strengthened SAFTU’s argument for nationalization of the mines.

Statement issued by Zwelinzima Vavi, SAFTU General Secretary, 21 June 2018