Paul Janisch

Initially he was known as Dinogwed

Initially he was known as Dinogwed.  I had to think about the best type of dinosaur that would suit our mining minister.  He couldn’t be a T-Rex.  He was best suited as a lumbering herbivore, my first choice was an ankylosaurus.  But it I don’t know where to fit the Gwed into the name – Gwedlyosaurus, ankylogwed.  Unfortunately I have to go with the very predictable Gwedosaurus – modeled after the stegosaurus - probably apt because he’s just as prickly as a stegosaurus.  You’ll notice the uppercase – I don’t dislike him, but he is not suited to hold any type of political office.  He’s backward and patently serving a certain segment of our entitled society.

Ed Stoddard wrote something about the recent court case in the Daily Maverick this morning.

In classic Mantashe fashion, his response will have left investors in the dark.

“To me, appealing or not appealing the latest charter ruling is not the issue. I may appeal to ensure the smooth running of the department. But for me, the major issue is whether the industry is committed to transformation, and will we see more black capitalists. If the industry is committed to transformation, we will not be appealing,'” he said. 

So if you want to commit significant capital to South Africa’s mining sector, just wait. The legal shenanigans over this vexed issue may or may not be over. The minister says he wants investors but such uncertainty is a key deterrent to investment. 

I agree with Ed’s comment after the underlined sentence.  BUT – it’s the underlined sentence that worries me the most.  How do you determine whether you are committed to transformation and how does Gwedosaurus determine it.  This is a problem.  It’s not documented.  You’ve got the mining charter that has been chopped down completely.  Does the Jurassic one think that a commitment to those aspects is enough.  Is using the generic scorecard (bolshie’s bullshit one) an acceptable method?

This is a problem.  One of the many in the mining industry.  I’ll leave Ed’s final comment in another article as a good representation of what is happening in the mining industry, although it’s a metaphor for almost every ministry, department or municipality that the anc has corruption control over.

Top it off with an incapable and corrupt state, and you get dramas like the one that just took place in Orkney. It won’t be the last.

Back to the DMRE/Mineral's Council case

A little more on the DMR Minerals Council case

It also noted the removal of other provisions which were seen as onerous. 

“The judgment also sets aside the provisions around procurement of goods and services (especially the capital goods target), and supplier and enterprise development which the Minerals Council argued contained unachievable targets for mining companies to meet, making compliance with the 2018 Charter problematic,” it said. 

Big mining companies here often have to buy specialised and very costly equipment from overseas suppliers because the stuff is simply not made here, and all the ANC talk about “re-industrialisation” is not going to change that. Again, it underscores a fundamental detachment from economic reality, or how ANC policies have undermined the manufacturing sector. A 350-tonne truck does not grow on trees. 

via www.dailymaverick.co.za

via bbbee.typepad.com

I can't let this go quite yet.  The whole judgement can be read here.   All of clause 2.2 in the 2018 charter has been set aside.  It's this clause - 2.2 INCLUSIVE PROCUREMENT, SUPPLIER AND ENTERPRISE DEVELOPMENT.  As Ed Stoddard argues in the Maverick article above, the DMRE cannot set procurement targets that will actually impact on a mine's ability to mine. 

We can't blame Gwede here - even if he has shown that he is in fact a dinosaur.  This appeared in a very vague form in the 2010 version.  The scorecard as we understand came from the incoherent zwane   version. which was duly rejected by the Minerals Council.  On that note - which is not really related to this post.  When zwane found out that his un-procedural charter was going to court, he had this to say.

It is our view that those who support this Mining Charter support our quest for transformation, and those who are in opposition to the charter are, in fact, opposing the transformation objectives of the government, and we stand ready to defend the interests of South Africans in this regard,” Zwane said.

You might remember the tourism relief issue,  I blogged about it recently.     When this went against the government it appears that the deputy minister of tourism (who will remain nameless because he's likely to be as useless as every other anc minister) had the following to say (I may not be taking this correctly - the bits of his speech that were reported don't seem to refer to the ruling)

Tourism is not just for the wealthy.

The average reader will know that this is a standard response.  That the anc government has shown scant regard for the transformation of the poor tends to be forgotten because you are a racist, a stooge or a coconut if you stand up against them.

ANYWAY - back to the setting aside of the procurement requirement in the charter.  This requirement shows that the DMRE, which includes dinogwed, has no fucking clue about what the business of mining is about.

Neither does the dti(c).  bolshie bob was just not suited for the job.  He has no clue, but he does have a very generous government pension.  Check this out

5.4.1 all goods and services procured from organs of state and public entities. Despite this, procurement by a Measured Entity from a local government authority, which is a reseller of that service, is measurable at the B-BBEE Recognition Level of the primary Supplier of the service;

This requirement under the amended procurement code is so fucking deluded that verification agencies ignore it mostly because it's not logical.  Do you as the business owner have any choice in who the services providers are?

But the best is this

6.5.2 imported goods and services other than those listed in paragraph 6.5.1 if there is no local production of those goods or services including, but not limited to, imported goods or services that –
6.5.2.1 carry a brand different to the locally produced goods or services; or
6.5.2.2 have different technical specifications to the locally produced goods or services.
6.5.3 The exclusion of imports listed under 6.5.2 are subject to them having developed and implemented an Enterprise Development and Supplier Development plan for imported goods and services. This plan should include:
6.5.3.1 Clear objectives
6.5.3.2 Priority interventions
6.5.3.3 Key performance indicators; and
6.5.3.4 A concise implementation plan with clearly articulated milestones

At face value it doesn't make any sense.  The first thing is who is THEM?  Is it the import or the company doing the import.  Because this is bolshie's document and I doubt whether he ever read any of them, I'll assume THEM is the company.  Now that we haven't cleared that up.  What exactly is a ED/SD plan for imported goods and services?   What does this mean.  When I first read it years ago I thought it was a plan for the importing company to ensure that they now help start a company manufacture or deliver those goods and services.  I'm not so sure now.  It could be that bolshie wants that company to give over part of their imports to a black-owned company.  Yet again we are left in the dark because Rob  fucking Davies was too lazy to actually explain what he meant.

The logic of this is beyond absurd.  If you have an exclusive right to import or sell a foreign product or service that gives you a competitive edge over everyone, why would you then want to hand that right to someone else, or have that edge diminished because you have given over the right to manufacture to someone locally in the name of BEE.    This is not how business works.  You get an edge and you work on it and build the business.

In fact this is pure communism.  Like everything else in these codes they operate in isolation.  You get no tax breaks or  any other incentives, other than BEE points whose value is ever-diminishing.

What happens is that I get hired to do these plans for people.  Because I know what the verification agencies want.  They want paper and they want it  notarised.  And it must look good and credible.  That's what I do.  I make it look good and credible because I know that neither the verification agencies nor SANAS actually know it means either.  God forbid you ask the awful awdoz or anyone at the dtic.

Elections are coming people.  These are all anc policies that lack clarity or credibility and have ever since they became the looters in chief.  Even the thieving eff can do better than this.

 

 

 

 

 

It also noted the removal of other provisions which were seen as onerous. 

“The judgment also sets aside the provisions around procurement of goods and services (especially the capital goods target), and supplier and enterprise development which the Minerals Council argued contained unachievable targets for mining companies to meet, making compliance with the 2018 Charter problematic,” it said. 

Big mining companies here often have to buy specialised and very costly equipment from overseas suppliers because the stuff is simply not made here, and all the ANC talk about “re-industrialisation” is not going to change that. Again, it underscores a fundamental detachment from economic reality, or how ANC policies have undermined the manufacturing sector. A 350-tonne truck does not grow on trees. 

via www.dailymaverick.co.za

Collateral Damage, business and the mining charter. Guess who draws the last straw (and it is very short indeed)

As defined by Wikipedia

Collateral damage is a general term for deaths, injuries, or other damage inflicted on an unintended target

The chances are that the average reader of this blog could be regarded as collateral damage.  This thought occurred to me when I attended an Afrisake business forum a few months' ago.  My Afrikaans is good, I was somewhat forced to learn it in the army.  I sat through a few of the presentations - all were informative, but there was one that really stood out and that was the one delivered by Frans Cronje (Dr).  I am translating the gist of his speech from Afrikaans and memory.  He described how the national government (read aNc)

is driven at its core not by the Constitution, nor by any of the formal economic policy blueprints it has adopted, but rather by the ideology of the National Democratic Revolution or the NDR

There's a link above to the article that I took this from - the sentiment was reiterated by Cronje at the forum.  He explained 

What, then, are the current ideological/policy goals of the South African government?

• liberate South Africans from the exploitation still implicit in ‘colonialism of a special type’ – and of which Western investment is seen as both a symptom and an extension;
• ‘eliminate apartheid [ie existing] property relations’ through the ‘redistribution of wealth and income’, which implies a need  to reduce or take control of Western interests/assets in South Africa;
• establish an ‘African hegemony’ in political, economic, and social life and so reject and limit Western influence;

The overarching goal is to push forward with the NDR because it:

•  offers the most direct route to a socialist and then communist society.

 Cronje then took us through the mentality of large (big) business.  Big business will do whatever it takes to cosy up to the government.  They might not agree with government privately but it is very unlikely  that they will do so publicly, the only example I can think of is FNB and that didn't go down well - even if they were correct in their approach and remarkably restrained. We would be under a false impression if we thought the big business will come to the aid of the economy if it doesn't serve them.  However they are very vocal when it comes to the Mining Charter.  This has everything to do with the sheer incompetence of wabenzi zwane.  He was so useless that they stopped bothering talking to him, they just litigated.  The Mining Charter has gone through yet another iteration under Mantashe.  And once again, following the NDR, Mantashe has produced a document that the mining community is not interested in implementing. 

Most of the issues revolve around ownership and related concepts.

In a nutshell, the new charter:

• Recognises the "once-empowered, always-empowered" principle, unlike Zwane’s charter. This means companies that did empowerment deals will still get credit for those transactions, even though black investors have since sold out;
• • Raises the requirement for black equity investment from 26% to 30% for existing mines;
• • Requires mines to have a minimum of 50% black directors, and 20% black women directors;
• • Stipulates that mining companies must pay a minimum 1% "trickle dividend" to communities and labour from the sixth year of a mining right;
• • Requires 30% black shareholding for new licences, but stipulates that labour and communities must hold 8% each. Of that 8%, the mine will have to give each group 5% for free. Taken together, that amounts to a 10% "free carry".
• The "free carry" is the most contentious clause. While it commendably seeks to extend wealth beyond the elite to include communities, the Minerals Council SA argues that the "free carry" makes it "uneconomical" to build new mines.

The most vocal critic is AngloGold Ashanti chairperson Sipho Pityana.

South Africa risks driving away new investment and crippling its mining sector if “reckless” new rules are implemented.  The latest Mining Charter, which is aimed at sharing the benefits of the country’s mineral wealth more equally among South Africans, doesn’t provide solutions to the industry’s challenges and will make it difficult for companies to buy and sell assets, Pityana said on Thursday.

 And here's where the collateral damage comes into the picture.  The table below shows the proposed procurement scorecard.

Element Description	Measure	Compliance Target %	Weighting %
Goods Procurement: A minimum of 70% of the total mining goods procurement budget must be spent on South African manufactured goods with a 60%+ local content value must be sourced from compliant manufacturing companies.	Percentage of the total mining goods procurement budget spent on South African manufactured goods by BEE Entrepreneurs.	21%	10%
	Percentage of the total goods procurement budget spent on South African manufactured goods from companies BEE Women Entrepreneurs or Youth owned and controlled company	5%	5%
	Percentage of the total goods procurement spend on South African manufactured goods from BEE compliant companies	44%	5%
Services Procurement: A minimum of 80% of the total spend on services must be sourced from South African based companies.	Percentage of total services budget spent on services from BEE Entrepreneurs	60%	5%
	Percentage of total services budget spent on services from BEE compliant companies	10%	5%
	Percentage of total services budget spent on services from companies who are 51% youth owned and controlled companies or BEE Women Entrepreneurs	10%	10%

 A few definitions.

“BEE Entrepreneur” refers to Black enterprises that are at least 51% owned by black persons in which Black persons hold at least 51% of exercisable voting rights and 51% of economic interest or an organ of State excluding mandated investments;

“BEE compliant company” means a company with a minimum B-BBEE level 4 status in terms of the BBBEE Codes of Good Practice and minimum 26% black ownership;

What this scorecard shows is that 51% black-owned companies will be favoured, and those that don't want to go that route will be able to provide about 55% procurement if they are a level 4 with 26% black ownership.  This section is unlikely to be contested by the mining companies.  In fact they might push up these targets as a compromise if Gwede relaxes the ownership requirements.   This is the collateral damage.  Big business is not going to be concerned about the status of their smaller down-the-line suppliers.  They will push unreasonable targets on them, because it's the line of least resistance.

If the codes that these down-the-line suppliers had to implement were reasonable, fair and had achievable targets then my response would be different.  They are not.

Cronje recognised this and left us with four guidelines that he believed would ensure the survival of small and smaller non-black owned businesses.

1. Don't do business with the government.  They aren't great payers (ask Liviero) and frankly they've made it very clear they don't want to business with you.  I would include all the state owned entities in this equation. (They do love your tax ZARs though)
2. Don't do business with big business. For the above reasons. (Note that they will refer to you as their "valuable clients")
3. Don't over-capitalise
4. Try to expand into foreign markets.

I could be a bit off the mark with this, but if it's not Cronje's wisdom then you can call it mine.

Namibia may scrap black ownership requirements for miners

We are just slowing down the (black) empowerment that we want to achieve, says the country’s mines minister.

This is a difficult one.  Clinging onto licenses for resources does give a government a lot of power and control but it also scares off investors.  

Diamond and uranium producer Namibia may scrap requirements for black ownership in the mining sector as it seeks to woo investors to an industry that is rebounding with the commodities cycle, its new mines minister said on Tuesday.

Regional peers such as Angola and Zimbabwe are also trying to kickstart their mining sectors by easing investment rules at a time when other African countries such as DRC are embracing resource nationalism and hiking taxes and royalties.

“I am not going to withdraw them (black ownership requirements) unilaterally, obviously we first have to discuss and see if they are really serving the purpose of why they exist. If the answer is, they don’t, then maybe we should change,” Mines Minister Tom Alweendo told Reuters.

“To give exploration licences to many people who won’t add value, I think we are just slowing down the (black) empowerment that we want to achieve at the end of the day,” he said.

Under the current policy, there must be a minimum 20% representation of historically disadvantaged, or black Namibians, in the management structure of a company that applies for an exploration licence.

As per Moneyweb

South Africa is not deterred by this.  You may have heard that the Chamber won a certain court case about topping up ownership.  Old incomprehensible Mantashe is appealing it.  Policy certainty - he's just taking a leaf from bolshie bob.  Here are the two perspectives.  Firstly the rancid capitalists

The appeal will add a layer of uncertainty to a sector battered for years by depressed prices, soaring costs and opaque policies, and which had hoped that new mines minister Gwede Mantashe would quickly act to improve the investment climate.

Earlier in April a high court ruled in favour of a Chamber of Mines’ challenge to a government regulation which specifies that a black ownership target of 26% must be maintained throughout the life of the mine.

The ruling, in the form of a declaratory order, means mining companies in the world’s top platinum producer need only to make the 26% threshold once, and do not need to top up again if black shareholders decide to sell their stake.

The industry has said it cannot afford to continually top up its black ownership levels as such shares are often offered at a discount in complicated and costly transactions. Mining accounts for about 8% of South Africa‘s GDP and is an important source of export revenue.

And then there is the DMR that is still struggling under the zwane yoke.  If in doubt claim that any investment is inherently anti-transformation

In a statement, the mines department said the judgement would hurt the policy of “economic transformation” – changing the ownership structure of the economy that was controlled by the white minority under apartheid. In a statement, the mines department said the judgement would hurt the policy of “economic transformation” – changing the ownership structure of the economy that was controlled by the white minority under apartheid.

The department said it had already approached the Supreme Court of Appeal (SCA).
“The judgement has dire implications for the economic transformation imperatives of the Constitution, the mining sector and South Africa at large. It further has the potential of extending regulatory and policy uncertainty,” the department said.

Love the reference to ownership structure because that's all that matters.

 

 

 

 

 

awdoz, enawz sdrawkcab. Will ruling be decree work?

There are two personages that should not be spared today's vitriol.  awdoz is the bee commissioner - great name when spelled backwards.  wabenzi-gupta boy's name spelled backwards is enawz.  awdoz and enawz are attempting to rule by decree.  Let's start with enawz (you can pronounce is ehnause or eenouse if you choose). enawz has pushed through his mining charter which calls for "radical economic transformation" as well as 30% black ownership.  The problem that enawz faces is that he is both not clever and he hasn't followed due process.  Already we've seen the mining shares take a knock.  What surprises me about enawz is whether he hadn't anticipated that there would be a market and legal kickback - we know that he expects other types of kickbacks because of his aptug relationship (I love this backwards stuff).  Why is he pushing this through -  the chamber is going to block it. 

Let's move onto the BEE Commissioner who has all of a sudden decided that she too can rule by decree.  A while ago she published another of those stunningly well-written opinion pieces about when the last BEE certificates under the old codes could be issued.  You'll probably find it somewhere here.  I initially ignored this because again it's an opinion and that's all.  You can see what I wrote about her opinions elsewhere on this blog.  In the newest opinion (PRACTICE GUIDE 02 of 2017 ) she states (as an opinion I stress) 

11. ..........B-BBEE Commission in accordance with the requirements to advice on the interpretation of any provision of the Act as per section 13F(1)(a) and (3)(b) (ii) of the B-BBEE Act, has concluded that the application of the old generic codes lapsed on the inaugural year the amended codes came into effect.

I didn't want to lumber you with her logic. As usual it's not bad, but it's her opinion.  We know that she's just opinionated.  This has really got her goat.  It seems that no one is taking her seriously.  She has decided to approach the Association of B-BBEE Professionals (ABP) and told them to withdraw all certificates under the old codes issued after the 30th of April 2016 - a year after the note about financials ending before 30 April 2015.  She apparently wants to go to court to get a clarification order - but has decided that before she gets to court she'll rule by decree (something her boss bolshie bob is very wont to do).

AND WHAT DID THE ABP DO?

Hulle het "fok die korporaal" gese.

We therefore could not reach a consensus as the B-BBEE Commissioner is still of the opinion that the Practice Guide 02 of 2017 stands and that Verification Professionals must withdraw these certificates from the market. Whilst the practice guide is not legally binding, the B-BBEE Commissioner expects the Verification Professionals to abide by it and withdraw these invalid certificates and where Verification Professionals do not heed this call, the B-BBEE Commissioner’s office will institute legal action as per the powers vested on her office by the B-BBEE Act as explained in the Practice Guide 02 of 2017, paragraphs 13, 14 and 15. (Against any certificate she comes across).

We understand that this is a very difficult time for our Members and the Verification Industry at large because of the potential negative impact which will have huge implication for the Verification Professionals and the industry. After discussing the application of the 18-month rule with Members we also believe that Verification Professionals did not intentionally sought to delay the implementation of the amended Codes. We therefore will be seeking a legal opinion on the matter and will advise accordingly

Something happens to public office holders, I doubt it's a uniquely South African issue, they just get a little too drunk on power.  In the case of enawz, I can't be sure that he's drunk on power, I just think he's thick.  He's out of his league, he's in the wrong province, he's badly advised and is now attempting a Comrades marathon on a three metre plank.  We don't expect much more from him. If you don't appreciate the sheer scale of his lunacy  perhaps this will clarify it for you

The Commissioner is different.  She's not thick, she's nowhere out of her league and I'm not so sure that she's badly advised.  I think the problem lies in the fact the no one takes her seriously.  That unfortunately for her comes with the territory.  When you work for an institution that is premised on arbitrariness in the form of draconian BEE codes then you are up against it. 

My advice to awdoz is to talk to the people you are supposed to be working for.  There are stories about her being aggressive and unpleasant and very unsympathetic.  If you want a hint of the aggression take a look at the FAQ's on her website.   Id est

What are the penalties for non-compliance?

The amended Act ha (sic) specified amongst other the following penalties: 10 years imprisonment for misrepresentation, 10% fine of annual revenue, 1 year imprisonment for failure to report misrepresentation and 10 year restriction from doing business with government.

 Er what?  What they are saying here (notice I didn't say awdoz) is that those companies that come up non-compliant are liable for 10 year in gaol.  Really!!!!  

awdoz, you'd get better results if you stopped behaving like an ANC-deployed cadre and started talking to your constituents.  Ask enawz about this, he's in for a fucking rough time (along with that doos amuz and his buddy abagig).

 

 

This will end up in court - mining charter on a collision course

wabenzi is determined to push his new mining charter through.  Even that doos zuma told a public that openly detests him yesterday, that it is coming.

The problem is that the mining houses have not agreed to it

Mining companies in SA have been frozen out of consultation over regulatory changes that could dilute shareholders, raise costs and impose new levies to fund community development.

Last week, SA’s Cabinet approved a new draft of the country’s Mining Charter and Mineral Resources Minister Mosebenzi Zwane has promised it will be gazetted within weeks. Yet while labour leaders have been consulted on the long-delayed new rules, the Chamber of Mines, which represents producers, says it "does not have any insight" into the latest version and hasn’t met government officials on the subject since March.

The looming dispute threatens to prolong uncertainty and further slow spending in SA’s biggest export industry. Fixed investment in mining dropped in each of the past two years and companies, including Sibanye Gold, have warned that any new investment will be a tough sell in the current environment.

"The government and the Chamber of Mines haven’t really sat down on this issue, and much of the public discourse has been posturing by both sides," said John Meyer, a London-based analyst at SP Angel Corporate Finance. The industry may head to court if the government imposes harmful changes, the chamber said this month.

I spoke to an attorney who specialises in the mining sector (and who is not subject to the fucking mining charter) this morning, he says if the chamber doesn't interdict it then someone else will. You would think that this useless government who is absolutely up against the ropes would attempt to follow due process. We know that bolshie bob pushed his unintelligible codes through without adequate consideration of the comments it received and no one blocked him (I tried but raised no cash to do so).  The mining sector is different, it is litigious.  There is a lot more money invested in the mining sector.

What is wabenzi's agenda here?  Surely he knows that this will be blocked; he hasn't even followed the most basic process.  Perhaps his idea that this will prove that business is (read white monopoly capital) is anti radical economic transformation and hence the mines need to be nationalised.  He can then take them and hand them over to the guptas.  We've learned not to second guess the average anc cabinet minister - retarding South Africa tends to be their priority.  What we do know is that zwane is absolutely out of his league, he's a gupta puppet and he's actually quite thick.

See you in court.

 

 

Zwanton Behaviour – malicious mine minister mangles Mpowerment

This is the blog post that's been sitting in my head for over a week now. Let's say you are a mines minister who has been known to celebrate Diwali in Saxonwold and arrange for plane flights to Waterkloof and go to Switzerland to chat to Ivan about a certain Tegeta company and a mine. In short you are one hell of a GupTankCommander. Rumours are that it is likely that you got the gig because the Guptas decided they needed a patsy to push through a wide variety of their business interests. You were the man. Ah yes but there is a problem, you have inherited an old spat between the Chamber of Mines and the DMR over the once-empowered, always-empowered issue which is now sitting in court. You have said over and over again that you are seeking a negotiated settlement. This all suggests that you are reasonable man, someone who is willing to talk, your doors are open.

But as a man known as Ed Christie said to me many years ago in Oshakati – our initial assessment of the man was "'n kak waardeuring gewees". In English a shit appreciation of the man. Here's a little bit of background.

There's been a dispute for a long time about the effect of the once-empowered, always-empowered rule. The Chamber argues that they have achieved the targets and hence should be allowed to focus on the other aspects of the charter. The Minerals Department argues that this is not the case, when the black shareholders go you get others. The Chamber's argument that the beleaguered resources industry can barely afford to mine let alone refinance deals. They were getting nowhere and so it went to court. This was done under the tutelage of the former mines' minister, Ngoako Ramatlhodi. He gets fired by the Guptas/ Zuma and is replaced by one Mosebenzi Zwane. To get a feel for Zwane take a look at Justice Malala's assessment.

Mineral Resources Minister Mosebenzi Zwane, a man spectacularly unqualified and unsuitable for the office he occupies, continues to demonstrate that he was appointed by Zuma to be the Gupta "baas boy" in cabinet. Remember this is the man who facilitated the Guptas' acquisition of a farm in Vrede when he was a lowly mayor. He also facilitated their landing a plane at the Waterkloof Air Force Base in Pretoria for their wedding guests. Within months of being appointed minister he flew to Switzerland to facilitate their acquisition of the Optimum coal mine from Glencore.

Still the man was willing to go to court. Wasn't broadsided by the Malan Scholes court case. Oh he was a man you could talk to. Yeah fucking right!!! This same personage decides that he'll allow the court case to go ahead but the outcome will be a moot point because he's publishing a new charter for comment that absolutely forbids the once-empowered rule. He justifies this using the following reasoning.

"Whether or not the mining charter is before a court does not preclude us from legislating," Zwane told reporters in Cape Town on Tuesday, without providing dates for the meeting. "We released the charter so as to engage in robust debate. That is how the final Mining Charter will come about - as a result of the engagements we have with stakeholders."

The 26% provision could have been higher, Zwane said. "If we wanted to we could have made ownership 35% or 40% as the wealth of South Africa belongs equally to all."

Ahh the wisdom of a Gupta/Zuma patsy. You might recall that a rumour went around 15 odd years ago that mining ownership compliance figures were to be 51%. Investors left in their droves. Billions were lost on the JSE. It's clear that Zwane is a very dangerous man. This move is being done with malicious intent.

Yes, the mines will engage and negotiate, they've got no choice. Mines!!!! – you are attempting to turn a mamba into a family pet. A mamba knows only to bite and flee. It's not going to sit on your lap and cuddle you on those cold wintery nights. Don't bother with the argument that it is only black people who will suffer because the unintended consequence is that the sector will collapse. They DON'T GIVE A FUCK. THEY DON'T GIVE TWO SHITS. THEY TRULY COULD NOT BE BOTHERED. Understand that when you negotiate. There is no reasonable argument that that will be considered. What they want to do is destroy white monopoly capital. And this must happen at all costs.

It still bothers me what they are doing it now, Pravin is trying his damndest to preserve the economy and the Zuma patsies are attempting to scuttle his efforts. This is a structured programme by Zuma to wreak havoc and weaken all opposition to him. Perhaps the thought is that Pravin will toss it all in and just fuck off to his retirement home.

No – we need to take the lead from the likes Malan Scholes and litigate when their arbitrariness gets out of hand. At least we know that they listen to the Constitutional Court.

Now – the final question is. Is it a mere coincidence that the mining minister has the word Benz in his first name? I think not.

Wabenzi boy – take a look at this poster. You can extrapolate it into the modern world – loose lips sink economies in this century.

 

 

 

 

 

 

 

 

 

Or is it that you prefer Catherine Tate…..

Maladministration mails

Maladministration is a long-time reader of this writty. He's sort of faded off the radar but he knows a person or two. He responded to my weekend post

Rob has a bigger problem. 3(2) is potentially meaningless to the objective he wants to achieve.

All empowerment licensing regimes of which I know have specific BEE criteria either hard-coded into the primary legislation (MPRDA being a case in point) or hard-coded into regulations (Sea Fisheries). In the case of the former, the BEE requirements for licensing are specifically dealt with in the MPRDA. Hence, section 3(2) does not trump the MPRDA as the BEE requirements for licensing are not specifically dealt with in the BBBEE Act and are, at best, generally dealt with in the BBBEE Act. Where the BEE licensing requirements are dealt with in regulations associated with another piece of primary legislation, the same should apply, although I can see a bit more scope here for debate - a crack in the door, at most.

Moreover, the MPRDA has a different empowerment objective specifically dealt with in the MPRDA with its own beneficiary class which is wider than that in the BBBEE Act. No trumping here, regardless of all the noise these guys make. All this pretence that he has jurisdiction over the MPRDA is demeaning of his own intelligence, let alone ours.

When asked whether he thought Rob Davies was strong like Mother Russia

That ministry is up to no good. Stuffing up international investment and trade with reckless abandon. Not just AGOA, see BITs, SADC Protocol, Protection of Investment Bill and the new SADC EPA Agreement with the EU which will be signed by October 2016. Under cover of darkness, Rob is turning us into Albania circa 1974. BEE is their sideshow...

Albania, now there is a communist country I hadn't considered. Thank you for your input Maladministration

Related articles

We are here today to bury ................

Does the Mining Charter have any teeth? Written by Allan Reid via BDLive

Draft PPPFA regulation disgust (discussed and cussed)

2009 Mining Charter is still on hold

The Minerals bill also puts great pressure on mining companies to give away 26% of their equity or assets to black economic empowerment (BEE) investors. It does so by redefining the Mineral and Petroleum Resources Development Act of 2002 to include a controversial code of good practice gazetted in 2009 but put on hold because of the consternation it caused. This code, in effect, requires that mining shares or assets sold to BEE investors be debt-free within two years. As most BEE investors lack capital and need extensive loans to fund their acquisitions, companies might have to forgive most of this debt to satisfy the requirement. This risk will revive if the present bill becomes law and automatically brings the code into effect.

via www.bdlive.co.za

It didn't seem like the 2009 Mining Charter was in effect.  It apparently is not

Who or what exactly is BEE enough for the mining charter?

This post is about HDSAs and procurement under the Mining Charter. I wouldn't recommend that you start getting all the white mommies that make up the cake and candy committee at St Stithians to form a HDSA company and take a shareholding in a mine. What am I saying – that's actually a very good idea.

The preamble of the "broad-based socio-economic empowerment charter for the South African Mining and Minerals Industry", more commonly known as the Mining Charter starts with

The systematic marginalisation of the majority of South Africans, facilitated by the exclusionary policies of the apartheid regime, prevented Historically Disadvantaged South Africans (HDSAs) from owning the means of product ion and from meaningful participation in the mainstream economy. To redress these histone inequalities. And thus give effect to section 9 [equality clause) of the Constitution of the Republic of South Africa Act 108 of 1996 (Constitution), the democratic government has enacted, inter alia, the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA

This paragraph tells us a lot about the intentions of the Mining Charter. My reading tells me that there are two classes of people that may be regarded as HDSA. The first are those who were "prevented from owning the means of product ion" AND those who were prevented "from meaningful participation in the mainstream economy". Both of whom were marginalised by "the exclusionary policies of the apartheid regime".

The premise of this post is that the HDSA definition includes all women and disabled people as per the 2001 PPPFA regulations. The regulations defined HDI as

(h) "Historically Disadvantaged Individual (HDI)" means a South African citizen –

(1) who, due to the apartheid policy that had been in place, had no franchise in national elections prior to the introduction of the Constitution of the Republic of South Africa,1983 (Act No 110 of 1983) or the Constitution of the Republic of South Africa,1993 (Act No 200 of 1993) ("the Interim Constitution"); and / or

(2) who is a female; and / or

(3) who has a disability:

Provided that a person who obtained South African citizenship on or after the coming to effect of the Interim Constitution, is deemed not to be an HDI;

I don't think that it's a disputed fact that the HDSA referred to in the Mining Charter (which came out in 2010) and the 2001 PPPFA regulations are effectively the same people. The Mining Charter quite probably realised that white women would make a killing on mining deals, as one does these days. They attempted to limit white women involvement with this definition.

Historically Disadvantaged South African (HDSA) refers to South African citizens, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993) came into operation which SHOULD be representative of the demographics of the country

I wrote a year ago that the underlined sentence referred to the Economically Active Population (Manyi's scourge). I don't think this is correct. The EAP refers to those between the ages of 16-65 (give or take a year or two), who make up 66% of the total population according to the 2011 census. The EAP therefore cannot be solely viewed as reflective of the demographics of the population. This is the breakdown of the population as per the census.

Race Group	Black African % of population	Coloured % of population	White % of population	Indian or Asian % of population	"Other" % of population
TOTAL %	79.20%	8.92%	8.86%	2.49%	0.54%

Those with an eye for detail might have noticed that the Black African section must include naturalised non-South African born Africans. This is because the Other number is only 280,000, and there must be a lot more than that number of naturalised Africans. That in itself is marginally problematic for Mining Charter and BEE purposes. What the census document doesn't appear to do is breakdown the number of men and women in each racial category. But it does give us a male to female ratio which is 48.65%:51.35%. Therefore the beneficiaries of the Mining Charter would need to follow these statistics.

Race Group	Black African % of population	Coloured % of population	White women % of population	Indian or Asian % of population
TOTAL %	79.20%	8.92%	4.55%	2.49%

The huge difficulty we face here is that Indian/Asians would never get a look in because they make up an even smaller number than white women. And then there's the practical application of the "representative of the demographics of the country". You're not going to get a company that will be made up like this – although Davies would love this. I asked an Anglo representative about this and he said that Anglo ask for BEE certificates and measure BEE ownership as per the BEE certificates. This must be new because there is an Anglo American letter sent to suppliers stating that

Anglo American Kumba Iron Ore must procure from BEE entities. A BEE entity is defined as an entity of which a minimum of 25% + 1 vote of share capital is directly black owned as measured in accordance with the flow through principle. B-BBEE ratings do not currently form part of the Mining Charter criteria for BEE procurement.

A BEE certificate will only mention black ownership, not the breakdown of the ownership in terms of the demographics. Perhaps a solution is to calculate all procurement and measure it according to the ratios above to see if you get to meet the charter.  The definition uses the word "should" which might allow for an average. If you were to favour African suppliers as a legislated requirement you are going to have trouble. I have seen a verification certificate that measures HDSA status in terms of the MPRDA. I suspect we'll see more of these in future and if the company turns out to be white women owned then I suggest that it is still in keeping with the spirit of the Mining Charter.

Related articles

Mining Charter and beneficiaries

Treasury, PPPFA and reforms

Who is an African?