Statement by Mineral Resources Minister Advocate Ngoako Ramatlhodi on the assessment of compliance with the Mining Charter, March 31 2015

Ladies and gentlemen of the media, I welcome you to today's briefing.

As you well know, the mining industry is one of South Africa's oldest, most reliable sectors, dating back well over a hundred years, and has made an unprecedented contribution to the growth and industrialisation of the country.

South Africa remains a significant player in the mining space. The country accounts for a significant proportion of known global resources of platinum group metals; chromium, manganese, vanadium and gold.

Nonetheless, South Africa's history of colonisation and apartheid has meant that the benefits flowing from the mining of these significant resources has been enjoyed only by a select few, with the majority of South Africans, particularly its black citizens, having to content themselves with the role of suppliers of cheap labour to the mining industry.

Since the advent of democracy in 1994, the South African government has prioritized a transformational agenda, not only for the mining industry, but more broadly for the South African economy as a whole.

Meaningful participation in the broader economy by the country's historically disadvantaged remains critical for the sustainability of our democratic ideals and freedoms. This is why Government has developed legislation and policies whose common objective is to reverse the debilitating legacies of the past.

The Mineral and Petroleum Resources Development Act is one such piece of legislation. It reiterates the fundamental truth that the minerals beneath our soil belong to the people of South Africa, and that the State's duty is to act as the custodian of these resources. In short, the Act aims to promote equitable access to the nation's mineral and petroleum resources, especially among historically disadvantaged South Africans.

Assessment of performance of the sector in respect of the Mining Charter

In June 2010, mining industry stakeholders represented in MIGDETT at that time: the Department of Mineral Resources, the Chamber of Mines, SAMDA, NUM, UASA and Solidarity - reaffirmed their commitment by signing a Declaration on the Strategy for the Sustainable Growth and Meaningful Transformation of South Africa's Mining Industry.

The Declaration formed the basis for the Mining Charter review and amendment. The Amended Charter was published in September 2010. The results presented today are the outcome of an assessment for the reporting period ending December 2014 which were discussed by MIGDETT principals today.

As part of the assessment process, a dedicated Project Management Office, including a Call Centre, was created. An online Mining Charter reporting system was developed and through MIGDETT, a Technical Task Team was set up, to create a platform for engagement. Certain stakeholders who expressed concerns had an opportunity to present those to the Department of Mineral Resources, ensuring that the assessment takes the views of all stakeholders into account. Beyond these, workshops were held with industry in the various provinces with a view of popularizing and assisting mining companies to complete the templates.

However, despite this process the MIGDETT stakeholders are not of the same mind on the principles applicable to assessing the ownership element. We have agreed to approach the courts for a declaratory order to guide us on the correct interpretation of the afore stated applicable principles. This is a step to promote regulatory certainty.

I am aware that the final submission date is the 31st March 2015, however the data I am about to present, represents more than 80,% in terms of employment numbers in the industry.

Assessment results: Highlights

These are some of the highlights from the assessment report as of 29 March 2015:

Ownership: As stated earlier, there's no consensus on the applicable principle and the courts are being approached to resolve the matter on an urgent basis

Housing and living conditions: 63% of right holders with hostels have converted hostels to either family and/or single units.. The drive to improve the living standard of mineworkers has not fully been realised. More needs to be done to address the broader objective of ensuring that mineworkers live in decent accommodation.

Employment Equity: The percentage of right holders that met the 40% target for each category are:

Top management (Board) - 73%

Senior management (EXCO) - 50%

Middle management - 56%

Junior management - 68%

Core and critical skills - 79%

Procurement and Enterprise Development:

42% met the target of procuring capital goods from HDSAs.

33% met the target of procuring services from HDSAs

62 % met the target of procuring consumables from HDSAs.

Human Resource Development

36.8% of companies have HRD spent the targeted 5% of total annual payroll on training.

Mine Community Development:

47% of mine community development projects are between 75% and 100% completion

Sustainable Development:

Except for the analysis of samples in South Africa, the performance on sustainable development has not met expectations.

Having said that, we would like to thank those companies who have embraced the Charter and the MPRDA, and who continue to be sensitive to their obligations, and for whom implementing their undertakings is not merely a box-ticking exercise. To current investors and potential investors, we value your investment in our country, and your understanding that for mining to be sustainable into the future, meaningful transformation must take place.

The Department would like to thank all MIGDETT stakeholders for their active participation in the process, and for their willingness to assist in ensuring it was concluded timeously.

The Department will further strengthen the efficacy of the Mining Charter through a review process to accelerate the transformation imperative in the mining sector and create a conducive environment for the sustainable growth of the sector. Furthermore, the Department will, following this assessment, continue to engage the industry and other stakeholders on addressing compliance matters both through the tripartite forum and on an individual basis.

To reiterate, government values the contribution of the mining industry to the South African economy. However, we expect investors in the industry to behave in a responsible manner, and to abide by the laws and policies of the country. From these statistics it is clear that there is still some way to go before we can truly transform the industry, and fully realise the objectives set out in the Charter and the MPRDA. We appeal to industry and labour to continue to work with us through MIGDETT and other structures to achieve this aim.

I believe we all can and should do better in this regard.

I thank you.

Issued by the Department of Mineral Resources, March 31 2015

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