ATC130607: Report of the Portfolio Committee on Mineral Resources on public hearings on the Mining Charter , dated 5 June 2013

Report of the Portfolio Committee on Mineral Resources on public hearings on the Mining Charter , dated 5 June 2013

The Portfolio Committee on Mineral Resources, having conducted public hearings on the Mining Charter, reports as follows:

1. Introduction

The Department of Mineral Resources published the Amended Mining Charter on 20 September 2010. Consequently, the Portfolio Committee on Mineral Resources undertook the public hearings with the purpose of listening to the mining industry stakeholders, organised formations, mining communities and mine workers, so as to ascertain whether they are aware of the revision of the Charter and if they were satisfied with the amendments. The public hearings were conducted in Carltonville, Gauteng Province, Klerksdorp, North West Province on 30 and 31 March respectively, and also in parliament on 24, 26, 31 August and 14 September 2011. The Committee also conducted hearings on the implementation of the Mining Charter by the top 10 mining companies on 02, 09 and 16 November 2011. This report therefore seeks to summarize the key issues raised by the organisations during the public hearings.

2. Background

The Mineral and Petroleum Resources Development Act (Act 28 of 2002) stipulates that the Minister must within six months from the date on which the Act took effect develop a broad-based socio-economic empowerment Charter that would set the framework, targets and time-table for effecting the entry of historically disadvantaged South Africans into the mining industry, and allow such South Africans to benefit from the exploitation of mining and mineral resources.

Accordingly, in 2002, the erstwhile Department of Minerals and Energy (now Department of Mineral Resources) together with mining industry stakeholders, including the Chamber of Mines, South African Mining Development Association (SAMDA) and the National Union of Mine Workers (NUM) signed the Mining Charter. The stakeholders agreed to meet after five years to review the progress and to determine what steps, if any, need to be taken to achieve the objectives of the Mining Charter. In accordance with the objective of the agreement by stakeholders, the DMR undertook an assessment to determine the extent to which the objectives of the Mining Charter have been achieved. The Mining Charter Impact Assessment Report was published in October 2009.

Subsequent to the report, the Amended Mining Charter was published on the 20 ^th September 2010 with the 13 ^th September 2010 as the effective date. In a statement issued by the DMR in response to accusations of lack of consultation, it reported that the relevant aspects of the Stakeholder‘s Declaration on Strategy for the Sustainable Growth and Meaningful Transformation of South Africa’s Mining Industry were effectively migrated to constitute the bulk of the amendments of the Mining Charter. The declaration document was signed by all stakeholders represented in MIGDETT, which include the Chamber of Mines, SAMDA, NUM, UASA and Solidarity.

3. Composition of Delegation

3.1 Portfolio Committee on Mineral Resources

The delegation to the Provinces comprised of the Chairperson of the Committee and Leader of the delegation, Mr MF Gona (ANC) , Ms FC Bikani (ANC), Mr C Gololo (ANC), Ms DH Mathebe (ANC), Ms N Mdaka (ANC), Ms LN Mjobo (ANC), Mr MR Sonto (ANC), Adv HC Schmidt (DA).

Support staff

Ms N Skaka (committee secretary), Mr S Ngcobo (committee researcher), Mr V Mfuniselwa (committee assistant), Mr J van der Westhuizen (committee assistant), Mr A Sheldon (technician), Mr T Sithole (technician), Mr G Ntshane (language practitioner), Ms L Molopyane (language practitioner), Mr K Gorata (language practitioner), Mr BG Mani (language practitioner), Mr A Groener (language practitioner), Ms CT Hartogh (language practitioner) and Mr L Namzi (media unit).

4. Stakeholder and Interest Group Participation in the Provinces

The participation in the public hearings varied amongst mining industry stakeholders that were part of the drafting of the charter, organised formations that were not part of the drafting and interested or affected individuals. The list of organisations that participated is as follows:

4.1 Organisations

· Chamber of Mines

· National Union of Mine Workers (NUM)

· Merafong Mining Community Forum

· Merafong Youth Forum

· Wendela Consortium

· Merafong Construction Forum

· Merafong Youth Business Chamber

· South African Women in Mining Association (SAWIMA)

· International Alliance on Natural Resources in Africa-South African Chapter

· Taung Traditional Leadership

4.2 The State

· Municipal representatives

· Gauteng and North West Provincial legislatures representatives

4.3 Analysis of submissions

The submissions, majority of which were oral, were explored in detail for common themes and these were established into units of meaning.

4.3.1. Chamber of Mines

· The mining companies represented by the Chamber of Mines support the New Mining Charter and are currently planning how to implement it.

· The mining companies acknowledge the shortcomings of the Old Mining Charter, which include lack of clarity on targets, gaps on health and safety as well as poor consultation.

· The Chamber hopes that, unlike in the previous commodities boom, South Africa is going to benefit from the new boom.

4.3.2. The Gauteng Provincial Legislature

· The Gauteng Provincial Legislature has identified mineral beneficiation as crucial for value addition and to this effect has identified the OR Tambo International Airport as the strategic beneficiation zone due to its location as an import/export hub.

4.3.3. National Union of Mine Workers

· The National Union of Mine Workers (NUM) pointed out that transformation is very slow in the mining industry.

· The NUM also pointed out that the designation of all women as Historically Disadvantaged South Africans (HDSAs) had an unintended consequence of promotion of white women to key positions.

· The New Charter stipulates that all levels of employment should reflect the demographics of the country.

· The NUM cautioned that the mining companies must not wait until 2014 to achieve targets as section 47 of the MPRDA must apply to those who do not comply.

· The NUM also raised concern about the lack of accessibility of royalties to host communities and lack of development of labour sending areas.

· A concern was also raised by the union with regard to lack of progress on ownership as well as procurement element.

4.3.4. Merafong Mining Community Forum

· The Merafong Mining Community Forum raised a concern about the failure to implement the Old Mining Charter, which has resulted in continued existence of single sex hostels and environmental degradation evidenced by, among other things, acid mine draining.

· The forum complained about not being invited to participate in the drafting of the New Charter.

· The forum submitted the Ghost Town Manifesto.

4.3.5. Merafong Youth Forum

· Provision of bursaries to all deserving students regardless of the field of study is one of the issues raised by the youth.

· It was proposed that West Deep be declared a heritage site.

· A concern was raised regarding the employment of foreign nationals at the expense of South Africans. However, a caution was also raised to avoid a creation of an environment that is fertile for the eruption of xenophobia.

4.3.6. South African Women in Mining Association

· The South African Women in Mining Association (SAWIMA) pointed inconsistencies when applying the Charter elements on applications for mining permits/rights e.g. In Limpopo locals are given priority while in North West only the BEE status is considered.

· SAWIMA would like to see an establishment of a specific body/tribunal that monitors compliance to the Mining Charter.

· It also proposed the introduction of rules to govern foreign investments in the industry.

· SAWIMA also proposed that the issue of workers who work for contractors need to be addressed as these workers appear not to enjoy labour rights enjoyed by all other workers.

· A complaint was raised about the exhumation of graves by mining companies without consultation.

4.3.7. Taung Traditional Leadership

· Kgosi Nyoko Motlhabane of the Batlhaping BaGa Maidi on behalf of the Taung Traditional Leadership gave testimony of the assistance his community received from the Portfolio Committee on Mineral Resources regarding a land dispute with the mining company.

· The Leadership welcomed the review of the Charter and the proposed amendments but believed that more can be done to ensure that the core objectives, i.e. equitable access and improved living standards are fully achieved.

· They welcomed the changes in the Mining Charter to establish targets and to make violations of the Charter violations of the Act itself.

· They supported the change in the provisions for development of mining communities from an approach focused on external planning to cooperative planning with local communities.

· They also supported the requirement that multi-national suppliers of capital goods to the mining industry must contribute to community development.

· They wanted some clarification as to some points related to community development and these were the following:

v How will the Social Development Fund receiving money from multi-nationals be managed and what will be its functions?.

v What is meant by the language in the Scorecard referring to communities owing patronage to projects?

· In order to further strengthen the Charter, the Leadership made the following recommendations:

v They noted that the Charter does not discuss the obligations of government, industry and Traditional Leadership with respect to mining on land of traditional communities. In these cases, particularly with respect to communities that are new to mining and lack resources, Government should play a more proactive and developmental role.

v Historically, these communities have provided workers to the mining industry for many generations and the mining industry should therefore take up responsibilities to assist these communities as well.

v Government should share with traditional leaders and their structures for development all information as to mineral resources on traditional land.

v Government and industry should establish a fund that will provide grants, loans on favourable terms and technical assistance to communities to enable them to-

§ Obtain prospecting and mining rights

§ Mine

§ Develop skills

§ Engage in beneficiation and marketing

§ Create and manage trust funds to ensure that the profits of mining are used for the benefit of past, present and future generations

§ Complete Development Strategies within the framework of government policies and programmes for sustainable growth and development.

v They stated that all of these recommendations are consistent with South Africa’s plan for Government to be developmental as well as provisions of the Amended Mining Charter. These recommendations will also contribute to achieving the newly added objective, i.e. Promote sustainable development and growth of the mining industry.

5. Stakeholder and Interest Group Participation in Parliament

The participation in the public hearings varied between the Department of Mineral Resources, mining industry stakeholders that were part of the drafting of the charter, organised formations that were not part of the drafting and interested or affected individuals. The list of organisations that participated is as follows:

· Chamber of Mines

· Business Unity South Africa

· South African Mining Development Association (SAMDA)

· National Union of Mine Workers (NUM)

· Congress of South African Trade Unions (COSATU)

· National Union of Metal Workers of South Africa (NUMSA)

· Solidarity

· Mpumalanga Women in Mining (WIMM)

· Western Cape Women in Mining (WIMWC)

· Northern Cape Women in Mining (WIMNC)

· Capital Equipment Export Council

· Webber Wentzel

· Equitable Access Campaign

· Royal Hlangwana House

· Sydney on Vaal Beneficiaries

· Merafong Mining Community Forum

· Bravura Consulting

· J Rocha Consulting

· National Youth Development Agency

· Joy Global Africa

· Taung Traditional Leadership

· South African Institute of International Affairs

5.1 Analysis of submissions

The following is the summary of inputs that the Committee received in Parliament.

5.1.1 Department of Mineral Resources

Mr Andre Andrias, the Director for Mineral Policy and Legislation Development made the presentation and began by giving a brief background of the Mining Charter (the Charter). He informed the Committee that Section 100(2) of the Mineral and Petroleum Resources Development Act (MPRDA) made provision for the Minister of Mineral Resources (the Minister) to develop a broad-based socio-economic empowerment Charter to the mining industry. As a result, mining sector stakeholders signed the Mining Charter in October 2002. Stakeholders agreed to review the Mining Charter after five years. In 2008 the Department of Mineral Resources (the Department) appointed an independent service provider to assess progress made on the Mining Charter against specific targets. He outlined the results which the assessment yielded. He then referred to the amendment of the Charter which was aimed at strengthening and sharpening the effectiveness of the old Charter in driving transformation and competitiveness in the mining sector. This was to be achieved through implementation of nine elements, which included ownership; procurement and enterprise development; beneficiation; employment equity; human resource development; mine community development; housing and living conditions; sustainable development and growth in the mining industry; and reporting (monitoring and evaluation).

Mr Andrias concluded by informing the Committee that a monitoring and evaluation module was to be developed to ensure higher levels of compliance with the Charter. He also mentioned the fact that companies were obliged to report levels of compliance annually and that a review of the MPRDA to increase penalty provisions that may be imposed on companies for non-compliance was needed.

5.1.2 Business Unity South Africa

Mr Kganki Matabane, Executive Director for Transformation Policy made the presentation and began by informing the Committee that Business Unity South Africa’s (BUSA) Transformation Policy Committee promoted broad-based Black Economic Empowerment. BUSA believe that the mining industry would continue to be an important pillar of the South African economy for the foreseeable future. The organisation described the evolution of the Charter from the initial Charter of 2002 to the Revised Charter of 2010, which they argued was not aligned to the Broad Based Black Economic Empowerment Codes of Good Practice. This entailed some companies having to double-report, but had the advantage that the Charter was more specific to mining. There is no requirement for verification of the scorecard by an independent body, which is a weakness, but the fact that reporting was now done annually was a positive development.

Mr Matabane commented that the New Growth Path (NGP) had specifically identified mining as one of the main economic sectors with a high potential for creating jobs. He further argued that discussion of the Charter should be in line with the objectives of the NGP. He indicated that mining was an industry with a long lead time on investment decisions. He concluded by emphasizing that rules must be consistent and given enough time for implementation before being changed and that BUSA remained optimistic that the mining and other sectors would meet their transformation targets.

5.1.3 Chamber of Mines

Dr Frans Barker, Senior Executive in the Chamber of Mines (the Chamber) gave the input which focused on the progress with the implementation of the Charter. He began by reviewing the revised Charter which was gazetted in September 2010. He informed the Committee that stakeholders had agreed to retain the principle of a special instrument for mining. He then noted changes and new and improved targets in the revised Charter. These included strengthened annual reporting and a proper scorecard, with provisions to deal with non-compliant companies. He further reported on progress and challenges with implementation. He indicated that mining companies could and should have learned more under the previous Charter.

Dr Barker commented on the Industry Progress Report based on company reports submitted to the Department. He also reported on progress with implementation as to ownership, procurement, skills development, employment equity, community development, accommodation, health and safety, environment, and reporting and suggested how the Charter could be further improved. He argued that the Chamber wanted an opportunity for the revised Charter to show results, rapid feedback from the Department, a guidance document, and alignment with, for example, the Broad Based Black Economic Empowerment (BBBEE) Code on procurement and independent verification. He then gave a detailed progress report, together with challenges, on ownership, procurement, skills development, employment equity, community development, accommodation, health and safety, environment, and reporting. He claimed that no Chamber member was at less than 15 per cent on ownership, measured against the weighted average of 28 per cent as contained in the Charter. Challenges as to ownership included the need to ensure that future deals were sufficiently broad-based. It noted that, as far as it could determine, all its members had reported, and emphasised that speedy feedback from the Department would be very important.

5.1.4 Capital Equipment Export Council

The Director for Group Strategy and Public Affairs, Bell Equipment Sales SA Limited, Mr Guy Harris, gave the input and began by giving a brief background and overview of the Capital Equipment Export Council (the Council). He informed the Committee that the Council fully supported the need to redress imbalances created by the unjust system of the past and stated that the biggest threats in South Africa were unemployment, poverty and inequality. He submitted that job creation in South Africa and the transformation of the economy was best achieved by adapting the Mining Charter to give preference to the South African manufactured product as that would do most in addressing unemployment, poverty and inequality. This could be achieved by setting targets for procurement of locally manufactured equipment, with a local content of at least 50 per cent, by mining companies and contractors of mining companies. He also stated that companies should be able to obtain bonus points for buying locally.

5.1.5 Webber Wentzel

T he Senior Associate for Webber Wentzel, Mr Jonathan Veeren, made the submission and informed the Committee that they advised various mining companies. He informed the Committee that the legal status of the revised Mining Charter and the ability of the Minister of Mineral Resources to amend it were uncertain. He further stated that the revised Charter's failure to adequately define terms such as " BEE entity ", " Demographics ", and " Effective ownership ", and its failure to define " core and critical skills ", " material constraints " and " services " and " consumer goods " rendered the revised Charter vague and uncertain with respect to the referring provisions. He indicated that the concepts of " Effective ownership " and " Meaningful economic participation " were contradictory in material respects and the latter may violate the Companies Act.

Mr Veeren further advised the Committee that the requirements of mine community development in the revised Charter were not clearly defined and therefore uncertain. Furthermore, he indicated that the requirements of sustainable development were currently governed by other legislation, rendering the provisions unnecessary and as they related to research facilities were not feasible. The revised Charter also failed to provide adequate instruction on the use of the Charter scorecard which had taken on a new and more complex approach in determining the compliance of mining companies. He concluded by submitting that whether the revised Mining Charter may purport to give itself the force of law remained debatable.

5.1.6 National Union of Metal Workers of South Africa

The Parliamentary Officer for the National Union of Metalworkers of South Africa (NUMSA), Mr Woody Aroun, gave the input and informed the Committee that NUMSA was especially concerned with beneficiation and its impact on the metals and engineering sector. He stated that minerals were a non-renewable 'wasting asset' and that South Africa was 'well-endowed with metals' but import parity pricing impeded 'growth and employment creation by the downstream sectors'. Also electricity pricing hampered downstream steel production as downstream producers had to pay more. He further indicated that there was enormous potential for expanding South Africa's capital equipment and medium and heavy commercial vehicle industries and, over time, South Africa should become less dependent on imports.

Mr Aroun emphasized the fact that, if platinum continued to be exported in large volumes without being beneficiated, the chances of making South Africa a leader in the production of catalytic converters was slim. He advised that the revised Charter should not undermine the objectives of the Industrial Policy Action Plan 2 (IPAP2), but should be aligned with the key action plans of the IPAP2, and strategically lever public procurement to facilitate metals beneficiation.

5.1.7 South African Mining Development Association

The President, Mrs Bridgette Radebe, the Chairperson, Mr Peter Temane and the Head of Policy, Mr Nkosinathi Ngwenya, for the South African Mining Development Association (SAMDA), made the input and began by giving some introductory remarks and also a brief overview of the Association and their submission. They informed the Committee that SAMDA was extremely concerned that transformation in the mining industry had not been met and the Charter targets had not been achieved by the majority of the industry. They felt that extension of targets from 2009 to some 2010 and others to 2014 was a betrayal of transformation. They also raised their concern with the fact that the amended Charter made no reference to women and the disabled. They noted that t he Mining Charter has disturbingly low targets for employment equity and has no targets for black women. e.g. Mining Companies are required to achieve a minimum of 40 per cent HDSA representation at all occupational levels. They were of the view that this 40 per cent target should be revised and new targets for black people, black women and black disabled employees should be set. These targets should be in line with EAP (Economically Active Population) targets, as this will avoid over-representation. They viewed HDSA targets as distorting the true picture of transformation in the mining industry because of a significant over-representation of white women in management. For example, the Commission for Employment Equity (CEE) report of 2011 shows that there are 6.5 per cent white women in top management (this is well above the EAP target for white women (5.3 per cent)) compared to three per cent black, coloured and Indian women. The charter must introduce specific interventions to increase the representation of women and in particular black women, in management and the industry at large.

SAMDA felt that the non-adherence to the Housing and Living Conditions and Procurement and Beneficiation requirements was a problem. They submitted that Mine Community and Rural Development requirements in the Amended Charter were vague and that there were no specific targets set. This was despite the fact that the bulk of the South Africans were domiciled in vulnerable rural areas and did not enjoy the benefits of rural renewal projects that would symbolize the value that is extracted from the communities in revenue accumulation by mining investors.

SAMDA proposed that ESOPs should live and exist through the life of a mine. They also provided some statistics on ownership, which placed the total ownership by black people in the JSE at approximately four per cent. They concluded by saying that the mining Charter had a lot of weaknesses and its alignment with the DTI codes would be the best solution, even though, it was promulgated before them. They also proposed that the Department should impose more punitive measures for non-compliance.

5.1.8 National Union of Mineworkers

The National Education Secretary, Mr Zwelitsha Tantsi and the Parliamentary Officer, Mr Madoda Sambatha, for the National Union of Mineworkers (NUM), made the submission. They began by commenting that the Chamber of Mines’ submission to the Committee (in which they questioned the DMR research report that showed a lack of compliance with the Charter) was 'not innocent' and was an attack on the integrity of the stakeholders. They stated that it was a deliberate attempt to rubbish the work of the consultants. The NUM therefore put on record that it did not appreciate the Chamber's attitude. They then gave a background to the NUM’s submission, followed by introductory comments on the Mining Charter and its objectives. They commented on the elements or pillars of the Charter, with reference to ownership and joint ventures, procurement and enterprise development, beneficiation, employment equity, human resource development, mine community development, housing and living conditions, and sustainable development and growth of the mining industry.

Mr Sambatha concluded by providing NUM’s suggested actions required from Parliament after the public hearings. These included, amongst others, the following:

· Parliament should change the focus on the debate on empowering individuals and introduce a new debate on empowering mineworkers, host communities and labour sending communities;

· Parliament must consider mandating both the Department of Mineral Resources (the Department) and the Department of Cooperative Governance and Traditional Affairs (COGTA) on development of Mining Community investment policy;

· Parliament must fall in line with the African National Congress NGC, September 2011 resolution, for the Department and the National Planning Commission to prioritize the Development and Adoption of the Mining Sector Strategy , using the current Department’s strategy;

· Parliament must mandate the Council for Geosciences, Mintek and Mine Health and Safety Council to fast track technological development on possible advanced technology to detect seismicity occurrences;

· Parliament should mandate the Black Economic Empowerment Council and Department of Trade and Industry (DTI) to develop a common formula to be used when assessing Ownership in the Mining Industry and that all parties involved should be compelled to use the same formula;

· Parliament should investigate possibilities of making the Mining Charter a concessionary contract to either a Mining Right or Prospecting Right and this could be made possible by changing the Licensing regime on the Mineral and Petroleum Resources Development Act (MPRDA) when amendments are finally presented to Parliament;

· Parliament must propose the introduction of Minerals Beneficiation Commission to be under DTI and composing the following stakeholders: Department of Health, Department of Mineral Resources, Mintek, Council of Scientific and Industrial Research, DTI, Department of Science and Technology, Organised Business and Organised Labour in Mining;

· Parliament should call on the Cabinet to finalize and call for public hearings on State Owned Mining Company;

· Parliament should request the Ministers of Mineral Resources, Economic Development, COGTA, and Rural Development and Land Reform, to consider the development of policy perspectives in the following:

▪ Social labour plan,

▪ Traditional authority or community ownership, and

▪ Community development;

· Parliament must develop a resolution to exclude white women as employment equity beneficiaries but allow them only on underground employment and must also oppose employing black women for menial and less rewarding jobs while white women were employed for senior administration, management, costing, and finance, or, if underground, only for skilled work;

· Parliament must institute an implementation mechanism for the previous Parliament's resolution on the need to investigate both living and working conditions of mineworkers; and

· Parliament must discourage any attempt by employers to enter into home ownership ventures as a means of alternative income. Home ownership programmes remained a social responsibility for companies towards their employees.

5.1.9 Congress of South African Trade Unions

Ms Prakashnee Govender, the Parliamentary Liaison Officer for the Congress of South African Trade Unions (COSATU) gave the input and began by giving a brief introduction of the organisation’s submission. She noted that the Mining Charter (the Charter) had only recently been amended and asked for clarity on the role of the Committee in relation to any substantive concerns that might be raised regarding the text of the new Charter. She stated that the mineral wealth of South Africa had been exploited with no benefit to the majority of the country and this was overdue for change. According to COSATU, the needs of those directly impacted by the mining industry required emphasis and the mineral-dependent nature of the economy needed to be addressed with the creation of local value-adding industries. Compliance with the Charter needed to be ensured. Ms Govender emphasized the need for social ownership and local value-adding industries needed to get priority over import companies. She indicated that ethnographic consultation with communities needed to be implemented in meaningful ways. She further said that skills development should allow for long-term security, given the finite life-span of mining operations and that provision should be made for the needs and security of foreign migrant workers.

5.1.10 Solidarity

Mr Gideon Du Plessis, the Deputy Secretary General for Solidarity made the presentation and began by emphasizing Solidarity’s strong belief that transformation was a crucial requirement for the stability of the mining industry. He informed the Committee that Solidarity supported the revised Charter and favoured Employee Share Ownership Plans as a model for community ownership and wealth distribution. He further indicated that the average community share ownership should be increased to five per cent and wherever possible, Black Economic Empowerment Service Providers should be used. Furthermore, a National Beneficiation Agency needed to be established and the funding and development of technical colleges to combat the mining skills shortage was urgently required with greater emphasis being needed on the development of transferrable skills so that workers could cope with the closure of mining operations. He emphasized the fact that the Mining Health and Safety Council needed to meet objectives for the Tripartite Action Plan.

5.1.11 Equitable Access Campaign

Mr George Nicolaai, the Spokesman for Equitable Access Campaign (EAC) presented and began by informing the Committee that to date there had been a serious lack of compliance with provisions of the Charter and a lack of action on this matter from the Department of Mineral Resources. He indicated that the EAC was providing an input on behalf of the small-scale marine miners of the Northern Cape. He then gave a brief background on the marine mining sector and the severe lack of compliance and transformation in that sector. He stated that in every element of the Charter, all mines were not meeting the provisions of the Charter except Alexkor.

5.1.12 Royal Hlangwana House

Mr Mamphye Jan Moima, a representative of the Royal Hlangwana House made the submission and informed the Committee that he wished to emphasize two issues. He stated that the land restitution process was lengthy and prospecting rights would not be issued on land that would be reclaimed by a community and mined without their consent. He further indicated that there was no information given to the communities and while policy development was valuable, compliance urgently needed to be upheld.

5.1.13 Sydney on Vaal Beneficiaries

Mr Kabelo Bontsi, the spokesperson for Sydney on Vaal Beneficiaries gave the input and expressed the beneficiaries’ total support for the review of current Charter, stating that the previous one had not served its purpose. He stated that there was a need for community interviews and information sessions before prospecting rights were approved and that areas involved in land claims should no longer be mined. He further indicated that historically disadvantaged people should be given the advantage in benefitting from mineral profits. He also informed the Committee that the community at Sydney on Vaal remained extremely poor and were excluded from the profits and benefits of mining. He then outlined that the new Charter should serve the objectives of mineral beneficiation and Black Economic Empowerment (BEE) in order to ensure the empowerment of mine workers and black people, and that social labour plans should be monitored carefully and should be geared towards infrastructure development.

5.1.14 Merafong Community Forum

Mr Thabiso Monyatsi, the Spokesperson for the Merafong Community Mining Forum (the Forum) gave the input and began by expressing the Forum’s gratitude for the opportunity to contribute to the hearings. He then informed the Committee that the Forum was concerned at the emergence of economic ghost towns in the wake of mine operation closures. He gave a brief background of Merafong City and its economic dependence on mining. He suggested that a national Mines Closure Fund should be set up for community development and that infrastructure investment was needed as well as more focus on local skills development. He further submitted that beneficiation industries should be developed in mining communities and a Minerals Regional Development Agency for the West Rand should be established to develop strategy for the region. He emphasized the fact that strong punitive measures were needed to enforce compliance. Furthermore, mining communities would always have particular needs and this required long term planning and clarity.

5.1.15 Bravura Consulting

Ms Alana Bond, the Head of Sustainable Development for Bravura Consulting (Bravura) made the submission and began by giving a brief overview of the Company and made several recommendations on how to improve the Mining Charter. She mentioned key challenges relating to the review of the Charter and these included the following:

· The procurement measurement in the Charter was not broad-based or focused on sustainable transformation and was open to abuse and fronting;

· Enterprise Development was barely mentioned and not measured; and

· Ownership did not deliver broad based benefits.

Ms Bond noted that Bravura recommended that the beneficiation element of the Charter be divorced from it and that a holistic, nationwide strategy be agreed on by government, the mining industry and other key stakeholders to ensure that it is done properly and in a way that will create real value and economic growth. With respect to Mine Community Development, Ms Bond recommended that mining companies had large community involvement and initiatives needed to be driven by communities. She further recommended that external bodies for verification of annual reports be created to help create a more standardized approach and take some of the pressure off DMR. Ms Bond noted that a high value creation opportunity for the mining industry to promote holistic approaches that include all the different elements of its operations, including environmental and socio-economic aspects should be created. She further indicated that there was a need to clearly state what constituted compliance, since it would be legally difficult to revoke licenses without this. She informed the Committee that the revised Charter should clarify all possible sources of confusion in order to ensure real transformation occurred, including exactly to which business entities it applied to.

5.1.16 J Rocha Consulting

Advocate Jacinto Rocha, the Principal Consultant for the J Rocha Consulting made the submission and informed the Committee that ownership as outlined by the Charter was the most emotionally and politically charged and popular element. He stated that the major debate on ownership was on broad based ownership as opposed to a wider ownership spread. He indicated that broad based ownership was politically sound but represented a commercial disaster as it undermined meaningful participation and was socially misleading with respect to benefits. In terms of procurement, advocate Rocha stated that the Charter had set procurement targets but these raised more questions than they answered and provided a challenge with respect to measuring the outcomes.

Advocate Rocha further informed the Committee that, on beneficiation, BBEE included ownership of and participation by Historically Disabled South Africans (HDSA). He indicated that there was no specificity in the Charter as to how beneficiation offsets would promote the ownership of and participation in the beneficiation by HDSA’s and that was problematic. He also mentioned the fact that there was no clarity as to whether beneficiation offsets would result in greater beneficiation in South Africa. He asserted that beneficiation offsets, where applied, did not promote beneficiation, but undermined HDSAs ownership in the mining sector. He concluded by emphasizing the fact that transformation in the mining sector had still a long way to go and that government needed to be consistent on BEE issues. He said that the Department of Mineral Resources (DMR) could not be the lone champion on transformation and suggested that DMR develop a database on Employment Equity, BEE and other areas pertinent to transformation.

5.1.17 Mpumalanga Women in Mining

Ms Ester Mhlongo, the Chief Executive Officer for the Mpumalanga Women in Mining (WIMM) gave the input and began by giving a brief background of the organization. She informed the Committee that her company of 20 black women was seeking assistance to obtain the dormant, non-operational rights to coal reserves of the old Union Colliery near Breyton in Mpumalanga. She further said that if 50 Disadvantaged Black Women participated in the Union Colliery initiative, each of them would earn in excess of R40 000 per month or R480 000 per year. She stated that WIMM was requesting the Committee to make a recommendation to the Minister of Mineral Resources and Parliament, to inform BHP Billiton Energy South Africa (BECSA) of their support for WIMM’s initiative, to enable the organisation to obtain or purchase the mineral right. She indicated that Disadvantaged Black Women understood and accepted that reserves have to be purchased or exploited in a joint venture/off-take agreement but requested the privilege, in compliance with the Charter, to negotiate prior to any public participation.

5.1.18 Western Cape Women in Mining

Mrs Rhona Marashula, a member of the Western Cape Women in Mining (WIMWC) made the input and began by giving a brief background of SAWIMA and the deals which were made when the organisation was established. She also provided the Committee with concerns which they as the WIMWC had experienced and were still experiencing. These amongst others included:

· Women in Mining being used by BEE groups to get mining rights and varnish with money from the companies;

· Beneficiaries from the mines in the Western Cape are top people who use their relatives and SAWIMA affiliation names to get mining rights; and

· The picketing in the Mining Indaba ignited by the affiliation due to its unhappiness about the Indaba.

Mrs Marashula concluded by providing WIMWC’s suggestions to the Committee and these included the following;

· The National Office should be in touch with its branches regularly;

· SAWIMA Western Cape should run workshops to empower its affiliates, encourage them to seek more information and do independent research so as to assist them to understand their involvement in the mining sector;

· WIMWC needs to be addressed by both the National office of SAWIMA and Government;

· There must be clarity and a way forward with time lines and desirable results;

· They wished that the Committee dig up information about the mines in the Western Cape and also Uranium Mines in Beaufort West.

WIMWC was also surprised that the National Office of SAWIMA finally called them to a meeting when they heard that they were invited in Parliament.

5.1.19 Northern Cape Women in Mining

Mrs Mzambo, the member of the Northern Cape Women in Mining (WIMNC) gave the input which focused on the challenges, which they as the organisation faced. She informed the Committee that they were having a lot of challenges as far as the DMR’s Provincial office was concerned. She stated that Women in Mining struggled to get their licences and DMR was failing to empower them. She emphasized the fact that economic transformation was lacking in the mining industry. She then proceeded to inform the Committee of the experience they had with the Mickeys Mine as they had a lot of problems. She indicated that they were sent from pillar to post by the DMR’s Northern Cape Provincial office when they applied for the mining right. Mrs Mzambo concluded by requesting that the Committee visit WIMNC and that DMR also be there so that they are there to give their side of the story when complaints are raised.

5.1.20 National Youth Development Agency

Mr Siviwe Mkoka, the Executive Director for Research and Policy for the National Youth Development Agency (the Agency) gave the input and began by informing the Committee that the Agency expressed its support for the Review of the Charter. He submitted that they welcomed the progress indicated by the Review Report of October 2008 and appreciated the acknowledgement made by the review on the failures of achieving important targets especially on ownership for HDSAs. He noted that whilst the review report of the charter acknowledged the absence of disabled people as a designated group, it also failed to recognize the youth as a designated group. He indicated that the Agency proposed that the Charter set targets for youth as a designated group outlined by the Broad Based Black Economic Empowerment (BBBEE), Act 53 of 2003 and Codes of Good Practice championed by Department of Trade and Industry. He further proposed that the target for youth should be set at five per cent for all components of the charter, the target of which was also supported by the recommendation of the Youth Development Strategy of the Department of Mineral Resources. Mr Mkoka emphasized the fact that the Charter should also set a target for disabled people as one of the designated group for all components that are set to be achieved.

5.1.21 Joy Global Africa

Mr Matimba Mahange, the Manufacturing Director for Joy Global Africa gave the input and informed the Committee that the organisation felt that the Charter did not recognize Department of Trade and Industry’s (DTI) codes of good practice and BBBEE scorecards for capital equipment and technology companies, creating non-uniformity and confusion. He stated that the foreign-listed multi-nationals were effectively penalised for investing in local manufacturing and that the codes and the Charter did not recognize the value of foreign manufacturing and technology investment. Mr Mahange further indicated that the Charter provided inadequate structure and process for recognition of local value creation, thus creating uncertainty. He also noted that the organisation was of the view that local procurement created jobs and should therefore be promoted more extensively by the Charter. He highlighted that manufacturing was being attracted to China as tempting benefits were promised to businesses that relocated there. Joy Global Africa therefore recommended that preference be given for South African manufactured products that met requirements and that foreign listed multi-nationals receive recognition for South African procurement and local content.

6. Submissions by top 10 mining companies on their compliance to the Mining Charter

In the course of the presentations on the review of the Charter, a conflict of opinion arose regarding compliance with the Charter. The opinion of some contributors, notably SAMDA and organised labour, was that the mining companies fell short of the Charter targets. On the other hand, the Chamber of Mines reported that its members had exceeded the targets. This prompted the Committee to invite mining companies to make presentations on their compliance with the Charter targets. The following ten mining companies, who together employed over 60 per cent of the mining workforce in 2011, appeared before the Portfolio Committee on Mineral Resources to make presentations:

· BhpBilliton;

· Exxaro;

· Gold Fields;

· AngloGold Ashanti;

· Lonmin;

· AngloAmerican;

· De Beers;

· Xstrata;

· African Rainbow Minerals; and

· Implats.

Mining Charter: Comparative sizes of the 'top ten' mining companies

Company	Employment	Minerals covered	Source
Anglo American South Africa	88 700	Platinum, coal, iron ore	Gomwe and Zikhali, 2011:4 - excluding De Beers
Gold Fields	48 545	Gold	Gold Fields, 2011:5
Lonmin Plc	36 500	Platinum	Farmer, 2011:4 - including 9 500 contractors
Impala Platinum (Implats)	36 049	Platinum	Implats, 2011:12
AngloGold Ashanti	30 000	Gold	AngloGold Ashanti 2011:4
African Rainbow Minerals	28 704	Platinum , iron ore, nickel, manganese, chrome	ARM, 2011:42
Xstrata	25 700	Chrome, platinum, coal, vanadium	Xstrata South Africa, 2011:17
Exxaro	9 750	Coal, mineral sands	Exxaro Resources, 2011:12
BhpBilliton	5 986	Manganese, coal	Moodley, 2011b:35
De Beers	2 801	Diamonds	De Beers, 2011:3
Total employment of 'top ten' mining companies in 2011	312 735
Total mining employment in 2011	513 211		DMR, 2012: Table 41
Percentage of mine employment accounted for by the 'top ten' mining companies	61 per cent	Note: the Chamber of Mines as a whole represents ±90 per cent of the mining industry (Barker et al 2011:12)

6.1 Analysis of submissions

The Portfolio Committee expected that it would be able to get a clear picture of the degrees of compliance with the Mining Charter by carefully analysing the submissions of the “top ten” mining companies. Each company had been asked to present their views on and experience of compliance with the revised Mining Charter. It was hoped that these submissions would provide a clear map of what the Mining Charter was achieving and whether any gaps in compliance were evident.

The summaries below, grouped under the Mining Charter scorecard sections, cover the submissions of each company and include questions and comments made by members of the Committee during the hearings. But it was not possible to use the evidence presented at the hearings to produce the ‘clear map’ of compliance that was expected. It was also not possible, from the information assembled, to either verify or dispute the contention of the Minister of Mineral Resources “that compliance with the requirements of the Mining Charter were very low” [1] .

The reasons for these differences of opinion reflect on the ongoing national debate on how compliance with the efforts to promote Broad-based Black Economic Empowerment is best measured. In the case of the public hearings on the Mining Charter, there were several factors that combined to make it difficult to judge the extent to which mining companies had complied with the Charter or not.

· First, no particular format was prescribed to the companies for their presentations to the Committee at the public hearings ^[2] ;

· Second, the companies did not all base their presentations on the format of the Mining Charter scorecard ^{[3] .} They touched on the issues raised in the scorecard in every case, but did not systematically focus on explaining the actual score for each item. The emphasis was often on whether the targets set in the Mining Charter had been met, not on the finer details of how this had been achieved. This meant that the Mining Charter scorecard could not be applied consistently as a standard against which to evaluate all the submissions.

· Third, the companies’ approaches to reporting varied. Some companies reported for each mining operation. Others gave results generalised for several operations across a commodity.

The net result was that Mining Charter scores could not be applied consistently as a standard to evaluate all the submissions. Beyond the lack of direct comparability between submissions, the Committee had received views that the revised Mining Charter remains open to interpretation in many aspects. [4] There is no independent authority that verifies the claims made by companies when they submit their annual progress reports under the Charter [5] . There is also no verification standard that ensures that there is a single interpretation of how measurements are made.

For all these reasons, it was not possible to assess companies’ performance under the Mining Charter comparatively, to identify which companies were succeeding well (and able to yield lessons for furthering the aims of the Charter) and which were lagging behind or experiencing difficulties related to gaps in the Charter (except when the companies themselves pointed to these issues).

The purpose of the Mining Charter, as stipulated in the MPRDA is to “ensure the attainment of Government’s objectives of redressing historical, social and economic inequalities as stated in the Constitution ” [6] .

The mining companies confirmed the assertions regarding their overall positive performance in terms of the Mining Charter which had previously been made by the Chamber of Mines [7] . The scores and statistics provided by the mining companies were, however, questioned by the committee members in several respects based on the observations they had made during oversight visits.

6.1.1 Ownership

The measurement of ownership proved to be the most contentious of all the nine elements of the Mining Charter scorecard. While the target for ownership was clear – rising from 15 per cent ownership by HDSAs for the March 2011 reporting period up to 26 per cent by 2014 – there was uncertainty on how the quality of this ownership should be assessed. The Charter specifies “effective” ownership, judged by measures of “meaningful economic participation” and “full shareholder rights” [8] .

The presentations by the mining companies echoed the claims of the Chamber of Mines, which stated that the average ownership by HDSAs across their membership was 28 per cent and that none of its members was below the 15 per cent HDSA ownership target set for 2010. The ownership levels reported by the mining companies were far above the determination of the Mining Charter Impact Assessment Report of 2009 which stated that “available data shows that aggregated BEE ownership of the mining industry has, at best, reached 9 per cent”. [9] This situation suggested that the industry and the Department used different measures to determine HDSA ownership.

6.1.1.1 BhpBilliton

BHP Billiton reported 26 per cent HDSA ownership for its mining operations. This was achieved “by concluding, Empowerment transactions with BEE consortiums, Community and ESOPs”. [10]

6.1.1.2 Exxaro

Exxaro reported “BEE ownership” at 55 per cent. [11] This was the highest percentage of HDSA ownership amongst the ‘top ten’ mining companies. BEE entrepreneurs own 52.10 per cent of Exxaro, through BEE Holdco. 9 200 company employees hold 2.97 per cent through MPOWER. Each employee who has held their shares since the scheme was initiated will have received a total of about R114 000 in dividends. Dividend payments paid to BEE Holdco shareholders exceeded R2.8-billion in the four and a half years to 2010. The market capitalisation of Exarro was R64-billion in June 2011 – HDSA ownership was valued at R34.9-billion.

6.1.1.3 Gold Fields

Gold Fields had 15 per cent HDSA ownership in December 2010 [12] and was able to identify this as “excellent performance” in terms of the Mining Charter scorecard because this represented 100 per cent of the target set for that date. Gold Fields reported its results as the company GFI Mining South Africa (Pty) Ltd (GFIMSA), a subsidiary of the listed Gold Fields Limited. BEE ownership of GFIMSA initially comprised a 15 per cent share owned by Mvelephanda Resources. Three additional empowerment transactions were completed in December 2010 which brought the HDSA stake in GFIMSA to 26 per cent by mid-2011. These were an Employee Share Option Plan (ESOP) that involved a 10 per cent share of GFIMSA for HDSAs and two Broad-based BEE transactions for 10 per cent of the South Deep mine and 1 per cent of GFIMSA. These investments were by South Deep Community Trust and Invictus, a vehicle for BEE business and community leaders, none of whom had previously been beneficiaries of BEE deals. Voting rights were established and economic value vested from day one. No funding was required from the beneficiaries, up-front cash was provided. Immediate dividend payments were made and guaranteed annually thereafter. Beneficiaries cannot be diluted and no further cash contribution is required. [13]

6.1.1.4 AngloGold Ashanti

AngloGold Ashanti reported an HDSA participation figure of 26.8 per cent in 2011, more than meeting the formal Mining Charter target of 26 per cent by 2014. This calculation comprised several distinct elements. [14] Before 2004, the company disposed of significant gold mining assets in an empowerment deal with an independent black-owned company, ARMgold. This accounts for 20.8 per cent of the HDSA ownership claimed by AngloGold Ashanti. 4.5 per cent of the company’s South African operations are held by an employee share ownership plan and 1.5 per cent by Izingwe Holdings (Pty) Ltd, a BEE company.

The ESOP and Izingwe transactions were restructured because of difficulties for the financing of the schemes that were created by share prices that were stagnant or weaker following the 2008 global financial crisis. The effect was that “loan shares” vested without real value transfer and that participants did not get meaningful dividends. The restructuring, amongst others, guaranteed a minimum payout of R40 per share and placed a ceiling on value per share payable to beneficiaries to make the costs of restructuring acceptable to other shareholders.

6.1.1.5 Lonmin Plc

Lonmin reported an 18 per cent figure for HDSA ownership in 2011, through its black empowerment partner Shanduka (via the Incwala structure). [15] Its ownership target for 2012 was also 18 per cent and the 2014 target of 26 per cent was marked with a green circle, signalling “On track, no major issues”.

6.1.1.6 Anglo American South Africa

Anglo American gave details of a succession of empowerment transactions, covering all the commodities mined by its South African business units. The minimum HDSA ownership level in 2011, across all enterprises, was 26 per cent.

Business Unit Effect of Transaction for HDSA ownership

Thermal Coal 26 per cent of current and future production

Iron Ore 26 per cent of equity

- Kumba Iron Ore

Manganese 26 per cent of equity

- Samancor

Platinum Greater than 26 per cent of production

- Anglo Platinum

Other Mining and Industrial 26 per cent of equity

- Scaw Metals, Black Mountain

and Gamsberg

Diamonds 26 per cent of equity

- De Beers

The Committee members questioned the ownership figures and wanted to know the real value of shares owned by HDSAs. Anglo American stated that most of its BEE transactions are broad based. It reported that the value of the BEE transactions it had concluded since 1994 amounted to about R60-billion. This calculation combined elements of direct share ownership by BEE partners and by employees through ESOPs with credits for empowerment transactions which “have led to the creation of flagship black-owned mining companies e.g. Exxaro Resources, ARM, Mvelaphanda/Afripalm and Shanduka Resources.” [16]

Anglo American stated that community participation is a key focus of their approach. This includes “the direct participation of communities affected by mining operations in the benefits they generate and transactions aimed at sustainable, long term economic uplift of mining areas” [17] . For example, the community owned three per cent of Sishen mine, which amounts to R6.3 billion.

The Committee members wanted to know how mining communities were defined. Anglo American responded that the mining communities are those within a 50 kilometre radius of its operations.

Members referred to dissatisfaction with the implementation of Employee Share Ownership Plans (ESOPs) and wanted to know what the barriers were. Anglo reported that it recognised ESOPs as the broad based model of ownership and that all its employees in South Africa are members of ESOPs. It informed the committee that about 5 800 of its employees were to receive dividends from ESOPs by the end of November 2011.

Members wanted to know about the sustainability of BEE companies supported by the major mining companies and Project Alchemy in Limpopo. Anglo reported that it funds BEE transactions itself instead of referring companies to banks. In many cases, Anglo American “has contributed directly towards vendor financing for empowerment partners to ensure financial viability and long-term success of the transaction.” [18] It also reported that its transactions involve trickle dividends (flow through) to its BEE partners.

The Committee was informed that the Alchemy Project is a R3.5 billion broad based economic empowerment transaction involving several host communities and labour sending areas. The project involves eight communities and takes Anglo American Platinum beyond the targets for legislative compliance.

6.1.1.7 De Beers Consolidated Mines

26 per cent of De Beers Consolidated Mines (DBCM) is owned by Ponahalo Holdings, a collection of Black Economic Empowerment entities. Ponahalo Holdings comprises Ponahalo Capital (50 per cent), a key employee trust (15 per cent) and the Equal Allocation Trust (35 per cent). Details were given of the beneficial owners of Ponahalo Holdings which include individual HDSAs, and trusts representing disadvantaged women, disabled people and communities. [19]

6.1.1.8 Xstrata

Xstrata reported that it had achieved the 2014 minimum of 26 per cent ownership target across the entire value chain of all its businesses in South Africa with the implementation of an ESOP. Cash dividends have been paid out from inception and the total pay-out to November 2011 was R2.1 billion. Xstrata informed the Committee of an agreement that was concluded on 2 November 2011 between the DMR, organised labour and Xstrata South Africa to implement a landmark R2.6 billion ESOP that will benefit almost 12 000 employees for the full life of Xstrata’s South Africa operations.

Xstrata’s empowerment transactions [20]

Operation	Date	Interest	BEE partner (s)
Xstrata South Africa
ESOP	Nov-11	3 per cent	Permanent A-C band employees
Alloys
Xstrata Merafe Chrome PSV	Jul-04	20.5 per cent of PSV (option to increase to 26 per cent)	Merafe Resources (Royal Bafokeng) - broad-based
Mototolo Platinum	Jul-06	26 per cent of JV	Kagiso - broad-based
Eland Platinum	Dec-07	26 per cent of JV	Ngazana
Xstrata Bakwena Vanadium PSV	Jul-07	26 per cent of PSV	Bakwena-Ba-Mogopa - communities
Coal division
Xstrata Coal	Jul-06	ARM – 10 per cent	ARM
	Sep-06	ARM Coal – 20 per cent
Goedgevonden	Jul-06	ARM Coal – 51 per cent	ARM

PSV - pooling and sharing venture

There is no downside financial risk exposure for ESOP beneficiaries – the scheme can never be “under water” (ie where the debt exceeds probable income flows). It was fully vendor-financed through an interest free loan with no fixed repayment term. No capital was required from beneficiaries at any point. Employee ownership held through an ESOP Trust, controlled by beneficiary-appointed trustees. The ESOP Trust has right to appoint one Xstrata South Africa board member. Xstrata is listed in Switzerland, not in South Africa.

6.1.1.9 African Rainbow Minerals

African Rainbow Minerals (ARM) is a diversified mining and minerals company [21] which is 54 per cent owned by two fully empowered South African entities [22] . Each of the South African mining ventures that ARM is associated with report to the DMR independently in terms of the Mining Charter. The main entities have the following ownership profile, with all companies already meeting the 2014 Charter target of 26 per cent HDSA ownership:

	Meaningful economic participation		Full shareholder rights
	2010 Target	Achieved	2010 Target	Achieved
Beeshoek Iron Ore Mine	15 per cent	41.41 per cent	15 per cent	41.41 per cent
Khumani Iron Ore Mine	15 per cent	41.41 per cent	15 per cent	41.41 per cent
Black Rock Manganese Mines	15 per cent	41.41 per cent	15 per cent	41.41 per cent
Dwarsrivier Chrome Mine	15 per cent	41.41 per cent	15 per cent	41.41 per cent
Modikwa Platinum Mine	15 per cent	31.95 per cent	15 per cent	31.95 per cent
Two Rivers Platinum Mine	15 per cent	36.03 per cent	15 per cent	36.03 per cent
Nkomati Nickel Mine	15 per cent	27.35 per cent	15 per cent	27.35 per cent

ARM has a 15 per cent stake in Harmony (gold), which was not covered in the ARM presentation. [23]

6.1.1.10 Impala Platinum Holdings Limited (Implats)

Implats reported that they are empowered above the 2014 target of 26 per cent. Their shareholding structures are fully broad based, including communities, employees and BEE partners. They pride themselves in being one of the largest unencumbered empowerment stakes. BEE ownership was reported according to mining operations as follows [24] :

· Impala – 26 per cent

· Marula – 27 per cent

· Leeuwkop – 26 per cent

· Two Rivers – 55 per cent

6.1.2. Housing and Living Conditions

The Mining Charter scorecard required performance to be demonstrated on two elements, the conversion and upgrading of hostels to attain the occupancy rate of one person per room, and the conversion and upgrading of hostels into family units.

6.1.2.1 BhpBilliton

BhpBilliton housed 52 of its 5 986 employees in hostels in October 2011. All the hostels would be demolished and replaced by single units by October 2012. 941 employees were living in family and single units provided by the company, but home ownership was encouraged “by awarding qualifying employees an allowance of R3 969 per month.” [25] The company more than met the transitional targets for housing and living conditions and with the demolition of all the hostels, the company would be in 100 per cent compliance with this aspect of the Mining Charter well before 2014.

6.1.2.2 Exxaro

Exxaro housed 24 of its 9 750 employees in shared hostel accommodation in 2011. [26] It had already converted all the other hostels into family units or one person single accommodation and was “on track” to meet the targets for 2014. Exxaro reported as follows on this element:

Houses rented from company – 53 per cent

Self-provided accommodation – 20 per cent

Accommodation in single quarters – 12 per cent

Home owners (bought company property) – 11 per cent

Family quarters/ flats – 5 per cent

Shared hostel accommodation – 0.25 per cent

6.1.2.3 Gold Fields

Gold Fields stated that 21 per cent of employees occupied single hostel accommodation in 2011, and presented a R788 million housing and hostel upgrade programme which is in progress for the period 2006 to 2014. [27] This will lead to all hostel rooms being for single occupancy by the end of 2014. The Committee was informed that more than 560 family housing units had been completed by end of 2010 and 957 units were planned for 2012. This will double the number of family occupancy units converted from hostels compared with the baseline (where 58 per cent of employees live in upgraded hostels/family units). Company-owned housing units are leased to category 3 to 8 employees at a nominal rental and some will be available for purchase by the occupant. The Gold Fields home ownership scheme is open to all employees who are South African citizens.

6.1.2.4 AngloGold Ashanti

AngloGold Ashanti did not indicate the number of its employees still occupying shared hostel accommodation, but it outlined a staged plan to attain the occupancy rate of one person per room by 2014. [28] This would involve converting 6 676 rooms at a cost of some R224-m between 2011 and 2014. In addition, some R68-m will be applied to creating an additional 278 family units from hostel infrastructure. These investments will allow AngloGold Ashanti to record 100 per cent compliance with the terms of the Mining Charter by 2014, and in some cases it will meet the targets before then.

6.1.2.5 Lonmin Plc

Lonmin did not indicate the number of its employees still occupying shared hostel accommodation in 2011, but it reported that it had converted 47 per cent of the hostels into “bachelor” (single occupancy) and family units. [29] 68 hostel blocks remained to be converted by 2014. The planned hostel conversion spend for 2012/2014 by Lonmin is R306 million.

The Committee members wanted to know how much it cost Lonmin to convert 47 per cent of hostel blocks into family units. Lonmin informed the committee that it takes about R200 000 to build a house but also that houses are unaffordable for most of its employees. This was the reason why there was a “high risk” of missing the promotion of Home Ownership targets set by the company for 2014. However, Lonmin assured the committee that hostel conversion targets would be met.

6.1.2.6 Anglo American South Africa

Anglo American companies housed 12 547 employees in hostels in 2009/2010. [30] The target occupancy rate of one person per room by 2014 will be met through a combination of hostel conversions and facilitating home ownership by employees. Anglo American reported that they had converted 80 per cent of their hostels into family and single-occupancy units. About R2-billion will be committed to employee housing initiatives to be implemented by 2014. This will include building some 28 000 housing units (20 000 units in partnership with the national Department of Human Settlements in the Limpopo and North West Provinces).

6.1.2.7 De Beers Consolidated Mines

De Beers has no employees living in hostels. The company has converted all their hostels into ”proper accommodation units”. [31] It was not able to claim any points in terms of the Mining Charter scorecard for this reason and its score for the component on Housing and Living Conditions still has to be determined.

6.1.2.8 Xstrata

Xstrata reported that it does not have hostels and therefore the housing and living conditions aspect of the Mining Charter scorecard was not applicable to the company. Employees receive a housing allowance that ranges between R3 000 and R6 000 a month. The Xstrata housing scheme has been developed in conjunction with and approved by organised labour, namely NUM and NUMSA.

6.1.2.9 African Rainbow Minerals

ARM has hostel accommodation for employees only at the Black Rock Manganese Mines, but the company did not indicate the number of employees still in hostel accommodation and whether rooms are single or shared. The existing hostel accommodation “will be fully converted by 2014” [32] . ARM actively facilitates home ownership for its employees.

6.1.2.10 Impala Platinum Holdings Limited (Implats)

Impala Platinum did not indicate the number of its employees still occupying shared hostel accommodation, or quantify its progress towards the Mining Charter target of an occupancy rate of one person per room by 2014. The company indicated expenditure of R1 674-m on “housing and living conditions” over the five years to 2011 [33] . This included the conversion of hostels to single room dwellings and the provision of family accommodation.

6.1.3. Procurement and Enterprise Development

Mining companies have huge procurement budgets and how they spend them influences the viability of many enterprises. The revised Mining Charter set targets for companies to meet related to the percentage of their non-discretionary procurement expenditure that is made up of transactions with BEE entities. A "BEE entity" is defined purely in terms of ownership. It is "an entity of which a minimum of 25 per cent + 1 vote of share capital is directly owned by HDSA [Historically Disadvantaged South Africans] as measured in accordance with [the] flow through principle" [34] .

Three targets are set in the revised Charter for the procurement of goods from BEE entities:

1. For the procurement of capital goods the target was 5 per cent in 2010, rising to 40 per cent by 2014

2. For the procurement of services the target was 30 per cent in 2010, rising to 70 per cent by 2014

3. For the procurement of consumables the target was 10 per cent in 2010, rising to 50 per cent by 2014

All the companies that made submissions on this element in 2011 reported that they exceeded the 2010 targets.

Some capital goods are not available from domestic manufacturers and have to be imported. The revised Mining Charter stipulates that when a mining company purchases such goods, it should “ensure that multinational suppliers of capital goods annually contribute a minimum of 0.5 per cent of annual income generated from local mining companies towards socio-economic development of local communities into a social development fund from 2010.”

The scorecard generates points from two values here:

a) Your company's total spending on procurement of capital goods from multinational suppliers operating in SA.

b) Total contribution by such suppliers to social development in respect of your company's procurement.

6.1.3.1 BhpBilliton

BhpBilliton reported that it met the Mining Charter targets for 2011 for the percentage of its procurement spend with companies that were more than 25 per cent owned by HDSAs.

Procurement spend from BEE entity	2011 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	10 per cent	51 per cent		40 per cent
Procurement of services	40 per cent	42 per cent		70 per cent
Procurement of consumables	15 per cent	57 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

BHP Billiton 2011

Calculation formulation underway

It was still occupied with the calculation of the percentage of its procurement spend from multinational suppliers that were being channelled into a social development fund

6.1.3.2 Exxaro

Exxaro did not achieve the 2010 target set for the procurement of services. Less than 25 per cent of their procurement spend was with Black Empowered companies, compared with the 30 per cent target for 2010 (and the 40 per cent target for 2011).

.

Procurement spend from BEE entity	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	43 per cent		40 per cent
Procurement of services	30 per cent	24 per cent		70 per cent
Procurement of consumables	10 per cent	25 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Exxaro 2010

Systems and structures in place to receive contribution

Exxaro said that it had a “Focus on raising performance of services procurement” to achieve the 70 per cent target by 2014. [35]

6.1.3.3 Gold Fields

Gold Fields met the 2010 targets set for local procurement spend from Black Empowered companies.

Procurement spend from BEE entity	2010 Target	Per cent spendwith BEE entities		2014 Target
Procurement of capital goods	5 per cent	39 per cent		40 per cent
Procurement of services	30 per cent	39 per cent		70 per cent
Procurement of consumables	10 per cent	44 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Gold Fields 2010

Not mentioned in presentation

674 companies out of a supplier base of 2,200 companies (31 per cent) had HDSA ownership levels above 25 per cent. Gold Fields reported that it spent R2.6 billion (41 per cent of total South African procurement) with BEE suppliers in 2010. Gold Fields is “planning to increase number of HDSA suppliers through various initiatives such as mentorship programmes and SMME incubators” [36] .

6.1.3.4 AngloGold Ashanti

AngloGold Ashanti (AGA) did not achieve the 2010 target set for the procurement of services. Less than 30 per cent of their procurement spend was with Black Empowered companies, compared with the 30 per cent target for 2010 (and the 40 per cent target for 2011).

Procurement spend from BEE entity	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	39 per cent		40 per cent
Procurement of services	30 per cent	29 per cent		70 per cent
Procurement of consumables	10 per cent	40 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

AngloGold Ashanti 2010

All AGA multi-national companies have been briefed to set aside to provide for this requirement

AngloGold Ashanti said that in the year to August 2011, it spent R2.2bn with BEE entities against a total measurable procurement spend of R5.5bn [37] (40 per cent) and outlined action items designed to meet procurement targets under the Mining Charter.

With regard to the required contribution of multi-national suppliers to a Socio-Economic Development Fund, AngloGold Ashanti said that while it had informed its foreign suppliers of the 0.5 per cent levy, it regretted the lack of guidelines.

AngloGold Ashanti raised the issue that municipalities were making demands that mines procure their needs locally (independent of any BEE requirements) and that there was a misalignment in BEE legislation between the Mining Charter (and how it defined empowerment) and the BBBEE Act, 53, 2003. This leads to misunderstanding in the supplier community about BEE requirements. Suppliers provide goods and services to other industries. They can comply with the BBBEE Act and its codes without meeting the over 25 per cent HDSA ownership requirement set in the Mining Charter.

6.1.3.5 Lonmin Plc

Lonmin met the 2010 targets set for local procurement spend from Black Empowered companies.

Procurement spend from BEE entity	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	28 per cent		40 per cent
Procurement of services	30 per cent	48 per cent		70 per cent
Procurement of consumables	10 per cent	41 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Lonmin 2010

Not mentioned in presentation

Lonmin’s BEE procurement spend for financial year 2011 amounted to R4.3 billion. Challenges reported by Lonmin included the small number of black owned suppliers of capital goods and the limited availability of experienced local suppliers. Enterprise development programs are in place to address this over time. [38]

6.1.3.6 Anglo American South Africa

Anglo American South Africa, and the subsidiary mining companies under its control, met the 2010 targets set for local procurement spend from Black Empowered companies.

Procurement spend from BEE entity
Anglo American Platinum	2010 Target	Per cent spend with BEE entities				2014 Target
Procurement of capital goods	5 per cent	50 per cent				40 per cent
Procurement of services	30 per cent	43 per cent				70 per cent
Procurement of consumables	10 per cent	35 per cent				50 per cent
Anglo American Thermal Coal	2010 Target	Per cent spend with BEE entities				2014 Target
Procurement of capital goods	5 per cent	51 per cent				40 per cent
Procurement of services	30 per cent	50 per cent				70 per cent
Procurement of consumables	10 per cent	67 per cent				50 per cent
Anglo American Kumba Iron ore	2010 Target	Per cent spend with BEE entities				2014 Target
Procurement of capital goods	5 per cent	25 per cent				40 per cent
Procurement of services	30 per cent	59 per cent				70 per cent
Procurement of consumables	10 per cent	31 per cent				50 per cent
Anglo American South Africa	2010 Target	Per cent spend with BEE entities				2014 Target
Procurement of capital goods	5 per cent	43 per cent				40 per cent
Procurement of services	30 per cent	47 per cent				70 per cent
Procurement of consumables	10 per cent	42 per cent				50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Anglo American South Africa

Not mentioned in presentation

In 2010, procurement spend by Anglo American South Africa (excluding state owned enterprises and municipalities) was some R48-billion. R21-billion of this (44 per cent) was spent with companies where over 25 per cent of equity was owned by HDSAs. [39]

6.1.3.7 De Beers Consolidated Mines

De Beers did not report on the details of its procurement performance as outlined in the scorecard for the Mining Charter, although it reported a 15 point score for procurement overall and indicated that all the targets for 2010 had been met. [40] In the first part of 2011, 67 per cent of local procurement expenditure was placed with HDSA owned or empowered firms.

De Beers did not comment on the second aspect of the measure of procurement and enterprise development. This looks at the annual spend on procurement from multinational suppliers and requires that 0.5 per cent of this value should be contributed to a social development fund.

6.1.3.8 Xstrata

Xstrata South Africa, reported that it met the 2010 targets set for local procurement spend from Black Empowered companies. This was illustrated by the procurement figures for Xstrata Alloys and Xstrata Coal. The divisions were said to be “well on track to achieve the 2014 targets” [41] .

Procurement spend from BEE entity
Xstrata Alloys	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	50 per cent		40 per cent
Procurement of services	30 per cent	32 per cent		70 per cent
Procurement of consumables	10 per cent	51 per cent		50 per cent
Xstrata Coal Division	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	38 per cent		40 per cent
Procurement of services	30 per cent	54 per cent		70 per cent
Procurement of consumables	10 per cent	41 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Procurement spend from BEE entity

Not mentioned in presentation

In 2010, procurement spend by Xstrata South Africa divisions (excluding state owned enterprises and municipalities) was some R18.3-billion. R7.3-billion of this (40 per cent) was spent with companies where over 25 per cent of equity was owned by HDSAs. This was reportedly as a result of significant facilitation afforded by Xstrata. This included the encouragement of non-HDSA suppliers to partner with HDSA companies (through ring-fencing of contracts). Larger suppliers were encouraged to permanently partner with local HDSA suppliers and facilitate skills transfer. Xstrata informed the committee that its enterprise development strategy is aimed at assisting members of the communities to establish small to medium sized enterprises and helping smaller companies to become suppliers to Xstrata. This is achieved through “soft loans on favourable terms” and other forms of business development assistance.

6.1.3.9 African Rainbow Minerals

African Rainbow Minerals (ARM) reported that it met the Mining Charter targets for 2011 for the percentage of its procurement spend with companies that were more than 25 per cent owned by HDSAs.

Procurement spend from BEE entity	2011 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	10 per cent	49 per cent		40 per cent
Procurement of services	40 per cent	51 per cent		70 per cent
Procurement of consumables	15 per cent	32 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

ARM 2011

Not reported on - Target recorded for 2011 and 2014

African Rainbow Minerals gave details of the 2010 procurement performance for each of the mines it reported on: [42]

Procurement spend from BEE entity
Black Rock Manganese Mines	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	47 per cent		40 per cent
Procurement of services	30 per cent	15 per cent		70 per cent
Procurement of consumables	10 per cent	22 per cent		50 per cent
Khumani Iron Ore Mine	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	52 per cent		40 per cent
Procurement of services	30 per cent	13 per cent		70 per cent
Procurement of consumables	10 per cent	17 per cent		50 per cent
Black Rock Manganese Mines	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	27 per cent		40 per cent
Procurement of services	30 per cent	28 per cent		70 per cent
Procurement of consumables	10 per cent	25 per cent		50 per cent
Dwarsrivier Chrome Mine	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	31 per cent		40 per cent
Procurement of services	30 per cent	46 per cent		70 per cent
Procurement of consumables	10 per cent	28 per cent		50 per cent
Modikwa Platinum Mine	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	25 per cent		40 per cent
Procurement of services	30 per cent	43 per cent		70 per cent
Procurement of consumables	10 per cent	49 per cent		50 per cent
Two Rivers Platinum Mine	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	60 per cent		40 per cent
Procurement of services	30 per cent	77 per cent		70 per cent
Procurement of consumables	10 per cent	32 per cent		50 per cent
Nkomati Nickel Mine	2010 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	5 per cent	37 per cent		40 per cent
Procurement of services	30 per cent	69 per cent		70 per cent
Procurement of consumables	10 per cent	16 per cent		50 per cent

In all cases the ARM mines met the 2010 Mining Charter targets for procurement.

6.1.3.10 Impala Platinum Holdings Limited (Implats)

Implats, reported that it met the 2010 targets set for local procurement spend from Black Empowered companies. This was illustrated by the procurement figures for Impala Platinum and Marula Platinum. [43]

Procurement spend from BEE entity
Impala Platinum	2011 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	10 per cent	58 per cent		40 per cent
Procurement of services	40 per cent	58 per cent		70 per cent
Procurement of consumables	15 per cent	49 per cent		50 per cent
Marula Platinum	2011 Target	Per cent spend with BEE entities		2014 Target
Procurement of capital goods	10 per cent	48 per cent		40 per cent
Procurement of services	40 per cent	55 per cent		70 per cent
Procurement of consumables	15 per cent	44 per cent		50 per cent

Multinational suppliers contribution to the social fund Target: 0.5 per cent of procurement value

Annual spend on procurement from multinational suppliers

Procurement spend from BEE entity

Not mentioned in presentation

In 2011, procurement spend by Implats divisions (excluding state owned enterprises and municipalities) was some R9-billion. R4.9-billion of this (55 per cent) was spent with companies where over 25 per cent of equity was owned by HDSAs. Over a third of the BEE spend was placed with local empowered companies, in the vicinity of the mines.

6.1.4. Employment Equity

The revised Charter set the targets for employment equity in terms of HDSA representation. The targets for 2010 (reporting period was March 2011) were as follows: 20 per cent representation in top management, 20 per cent representation in senior management, 30 per cent representation in middle management, 40 per cent representation in junior management and 15 per cent representation in core skills.

Almost all companies reported that they had succeeded in meeting the 2010 targets for performance in terms of the Charter.

The table below compares the employment equity percentages presented by the “top ten” mining companies to the Committee in 2011.

For ease of comparison, they are ranked from highest to lowest, with rows at the bottom showing the Mining Charter Targets for 2010 and 2014. Xstrata gave information for its two divisions separately, so it is listed twice in the table. Grey shades areas indicate where figures are below the 2010 target.

Comparison of Employment Equity percentages across the companies in 2011

"RANK"	Top Management	Senior Management	Middle Management	Junior Management	Core Skills
1	50 per cent Lonmin	40 per cent ARM	55 per cent Exxaro	76 per cent Exxaro	87 per cent Xstrata Coal
2	50 per cent Exxaro	39 per cent Implats	52 per cent Xstrata Coal	72 per cent De Beers	82 per cent Xstrata Alloys
3	50 per cent De Beers	37 per cent BhpBilliton	51 per cent De Beers	69 per cent ARM	82 per cent De Beers
4	46 per cent BhpBilliton	31 per cent Gold Fields	50 per cent Xstrata Alloys	61 per cent BhpBilliton	69 per cent Implats
5	38 per cent Xstrata Alloys	31 per cent De Beers	50 per cent ARM	58 per cent A. American	59 per cent Gold Fields
6	38 per cent ARM	31 per cent A. American	50 per cent A. American	56 per cent Xstrata Coal	52 per cent BhpBilliton
7	33 per cent Gold Fields	30 per cent Xstrata Coal	46 per cent Gold Fields	53 per cent Implats	46 per cent Exxaro
8	29 per cent A. American	30 per cent Exxaro	43 per cent BhpBilliton	50 per cent AGA	42-94 per cent ARM
9	25 per cent Implats	24 per cent AGA	40 per cent Implats	49 per cent Gold Fields	no data A. American
10	25 per cent AGA	23 per cent Xstrata Alloys	37 per cent AGA	46 per cent Xstrata Alloys	no data AGA
11	18 per cent Xstrata Coal	15 per cent Lonmin	26 per cent Lonmin	36 per cent Lonmin	no data Lonmin
Target 2010	20 per cent	20 per cent	30 per cent	40 per cent	15 per cent
Target 2014	40 per cent	40 per cent	40 per cent	40 per cent	40 per cent

Notes : AngloGold Ashanti (AGA) limits the number of white women classified as HDSAs to 6 per cent - their share of the total population. [44]

Lonmin excludes white women from its Employment Equity calculation. HDSA representation across all management levels was 43 per cent, inclusive of white women, in 2011. [45]

ARM gives core skills figures individiually for each mining operation. The 2014 target is exceeded in all cases. [46]

With the exception of Lonmin and Xstrata Coal, all of the mining companies more than met the targets for 2010 in all the ‘management’ categories.

With the exception of Lonmin, all of the mining companies already more than met the targets for Junior Management in 2014 and most also met the 2014 target for Middle Management. AngloGold Ashanti just missed the 2014 target of 40 per cent, reporting that 37 per cent of middle managers were HDSAs in 2010.

Employment equity in Senior Management is much less evident, with a single company, African Rainbow Minerals, meeting the 2014 target of 40 per cent HDSAs by 2014. But companies still have time within which to address this target.

Four companies already met the 2014 target for Top Management (including Lonmin).

Lonmin did not give detailed employment data and did not include any white women in its employment equity calculation. This may account for its weak performance, missing the 2010 targets for senior, middle and junior management. In its presentation, Lonmin said that it was on track to meet the 2014 transformation goals for employment equity, with “no major issues”. [47]

Xstrata met the 2010 target for top management overall, but not within the coal division measured alone.

All the companies that reported on employment equity within “Core and Critical Skills” indicated that the 40 per cent target set for 2014 had already been met. This category is, however, very broadly specified. “ These are skills necessary and inextricably linked to day-to-day operations OR skills that enhance the performance of an operation and are in scarce supply This could include artisans; engineers incl. rock engineers; professionals (ie recognized by a professional body), specialists (e.g. surveyor, safety, geologist, metallurgist, winding engine driver, environmental, etc.), technologists, technicians, and persons with mining specific qualifications or licenses” [48]

Some committee members wanted to know if the statistics on employment equity included foreign nationals. Anglo American reported that 6 265 of its 91 000 employees are foreign nationals (6.9 per cent). Foreign nationals are not counted for the purposes of employment equity.

While targets for the employment of women in the mining industry are not part of the scorecard for the revised Mining Charter, the number of women employed is included in the reporting template. [49] The original Mining Charter of October 2002 committed companies to ”“Ensuring higher levels of inclusiveness and advancement of women. The stakeholders aspire to a baseline of 10 per cent of women participation in the mining industry within 5 years”. (ie by 2007 – or 2009 from the date the Charter was Gazetted). Several companies highlighted the small, but growing, proportion of women in the industry in their reports to the Committee. For example, AngloGold Ashanti provided data to show that it “exceeded the baseline of 10 per cent as at the end of September 2011 by achieving 12 per cent women in mining” [50] .

Xstrata reported that females comprised 15.6 per cent of total workforce and 11.9 per cent of total management. De Beers reported that 13 per cent of their employees were women. Fourteen per cent of ARM employees were female in 2011. (11 per cent were black females and 3 per cent white females).

6.1.5. Human Resources Development

The revised Charter set a 2010 target of three per cent of the total annual pay roll to be spent on human resource development, excluding the mandatory skills development levy. This percentage is to be increased five per cent by 2014.

All companies reported that they had met the 2010 target. Six said they had already surpassed the 2014 target.

Company	2010 HRD expenditure as per cent of payroll
Exxaro	6 per cent
De Beers Consolidated Mines	6 per cent
African Rainbow Minerals	6 per cent
Impala Platinum Holdings Limited (Implats)	6 per cent
AngloGold Ashanti	5 per cent
Anglo American South Africa	5 per cent
BhpBilliton	4 per cent
Gold Fields	4 per cent
Xstrata	4 per cent
Lonmin Plc	4 per cent
Target 2010	3 per cent
Target 2014	5 per cent

This was reflective of the Chamber of Mines’ statistics, which stated that the average spending of its members on skills development as percentage of total pay roll was 4.6 per cent. However, the Commission for Employment Equity Report indicated that white males at top and senior management levels benefitted more from skills development initiatives. At top management level, 48.7 per cent of beneficiaries of skills development programmes were white males, while they constituted 37.7 per cent of beneficiaries at senior management level. It must be noted that these statistics reflected the profiles and movement of employees across all sectors. The revised Charter score card does not require the mining companies to report on profiles of beneficiaries of skills development initiatives, although a race and gender breakdown is required for the detailed reporting template, which also divides expenditure items into the following five categories:

· Learnerships

· Artisans and apprentices

· ABET training

· Other training initiatives

· Bursaries and scholarships

The material presented to the Committee on Human Resource Development was informative, but often too varied in its detail to allow for further comparison.

6.1.5.1 BhpBilliton

BhpBilliton initially reported a 3.5 per cent performance as against the 3.5 per cent target for 2011. [51] In response to a request for additional information, the company provided figures that allowed the following calculation [52] :

Human Resource Development: BHP Billiton SA Mining Operations 2009-2011

	African, Coloured and Indian			White
Three year summary	value	number	average	value	number	average
Learnerships and bursaries of core and critical skills	R 34 -m	214	R 162 109	R 6.7-m	39	R 172 308
ABET	R 1.8-m	434	R 4 056	R 0	0	-
Other training initiatives, school and post matric programmes	R 99.9-m	3 931	R 25 409	R 20-m	1 081	R 18 543
Combined summary	R 136 –m	4 579	R 29 774	R 26.8-m	1 120	R 23 897

Total HDSA training expenditure (includes white women) R 137 366 415 (A)

HDSA payroll R 1 816 213 710 (B)

Percentage (A/B) 7.6 per cent (“3.5 per cent mining charter 2011 target exceeded” [53] )

6.1.5.2 Exxaro

Exxaro reported that it spent R23.7 million on artisan training and learnership. An average of 430 engineering learners received training each month. This constitutes 5.4 per cent of all learnerships in the mining sector even though Exxaro employees only make up 2.5 per cent of the industry. For 2011, 76 per cent of learner intake was black. Over the previous five years, Exxaro had qualified over 500 artisans and 108 engineers. Exxaro was funding 103 bursars who are studying full time at universities at a cost of R11 million per annum. A total of 88 professionals-in-training are participating in internships at a cost of R40 million per annum.

6.1.5.3 Gold Fields

Gold Fields informed the Committee that it has an academy that manages its internal training programme with a budget of R275 million per year. The academy funded over 600 mining and engineering learnerships in 2010. It had offered 13 150 staff and 3 100 community members ABET opportunities to date. Over the previous five years, a total of 4 845 employees and learners received portable skills training.

6.1.5.4 AngloGold Ashanti

AngloGold Ashanti provided data to illustrate the training it had provided for 44 806 employees and 6 377 members of mining communities in the 2004 to 2010 period. [54] It showed the HRD plans for the years up to 2014 and indicated that it would meet the 2014 target for HRD expenditure as percentage of total annual payroll (excluding the mandatory skills development levy).

AngloGold Ashanti Human Resource Development: Actual 2004 to 2010

Category	Employee	Community
ABET (Including RPL)	38 530	3 697
Engineering Learnerships	424	213
Mining Learnerships	1 535	128
Bursars	102	369
Alternative Skills to Mining	1 391	1 577
Management Trainees	517
Community Mining Skills		393
Study Assistance	2 307

6.1.5.5 Lonmin Plc

Lonmin indicated that it had fallen short of its 2011 targets for the numbers of ABET Trainees and Learnerships but had exceeded the 2011 target of 3.5 per cent of payroll for expenditure on human resource development. 2011 targets in other categories were met or exceeded and the company was on track to reach its 2014 targets. [55]

	2011 Actual	2011 Target
Number of ABET trainees	601	823
Number of Learnerships	184	276
Number of bursaries	44	43
Number of sponsorships	30	27
Number of graduates in development programme	29	29
Number of portable skills learners	57	55

6.1.5.6 Anglo American South Africa

Anglo American reported that in 2010 about R810 million was spent on employee training initiatives, bursaries, ABET, management programmes and re-training despite a headcount reduction.

Anglo American: Numbers - 2010	ABET Learners	Bursars
Platinum	2 358	341
Thermal Coal	444	397
Iron Ore	95	55
Other	85
Total	2 982	793

– Platinum c. R441 million 4.3 per cent of total payroll

– Thermal Coal c. R202 million 8.2 per cent of total payroll

– Kumba Iron Ore c. R167 million 6.8 per cent of total payroll

About 2 600 employees received portable skills training to be employable outside the mining industry in South Africa. Anglo American stated that it “operates a global world-class technical centre in South Africa, the Technical Business Coordination Group, which employs 883 personnel in South Africa and the budgeted cost for 2011 was R 946 million.” [56]

6.1.5.7 De Beers Consolidated Mines

The total HDSA HRD expenditure for De Beers amounted to R60 million in 2010. It spent R12.5 million on learnerships, R20.86 million on artisans and apprenticeships, R12.35 million on ABET, R2.73 million on bursars and scholarships and R2.62 million on school support and post matric programmes. De Beers also partnered with the University of Johannesburg on the Maths and Science Programme for schools. It also financially assisted 375 tertiary education students at 32 institutions of higher education.

6.1.5.8 Xstrata

Xstrata reported that its commitments to human resource development exceeded the 2010 Mining Charter target. About R133m was spent on human resource development in 2010 (excluding skills development levies). This amounted to 3 per cent of payroll at Xstrata Alloys (R66m) and 5.9 per cent of payroll at Xstrata Coal (R67m). There had been a 100 per cent increase in total training hours amounting to 41.7 hours per employee (incl. contractors) per year. The training was provided on environmental, health, human rights, safety and professional development / mentorship. Skills training centres each costing R30-million, had been built in Mpumalanga and Limpopo: the Steelpoort Artisan Training Centre and the Kwa-Guqa Learning Centre (to develop communities’ literacy and IT skills). Additional skills development initiatives focused on youth and learning. These totalled 4 443 apprenticeships / learnerships; 863 bursaries, 507 graduate trainees and 991 student work placements. [57]

6.1.5.9 African Rainbow Minerals

While ARM reported that 6.4 per cent of its payroll was spent on training in 2011, two of its individual mines missed the 2010 target of 3 per cent - these were Black Rock Manganese Mines (2.9 per cent) and Modikwa Platinum Mine (2.7 per cent). ARM spent over R92 million on training in the 2011 financial year representing an average of over R4 700 per employee. R50 million was spent on training in the 2010 financial year. ARM is in the process of establishing or has the following learning academies:

· Leadership (Management and Supervisory) – capacity 150 trainees

· Mining (Shiftboss/ Mine Overseer) – capacity 50 trainees

· SHERQ (Safety, Health, Environment, Risk and Quality) – capacity 45 trainees

· Engineering – capacity 350 trainees

· Operator – capacity 500 trainees

231 learnerships were in place in 2011 (some two per cent of the total number of employees) and 220 bursaries. These include study assistance to own employees (120), and bursaries for children of employees and community members. [58]

6.1.5.10 Impala Platinum Holdings Limited (Implats)

Implats reported that it spent R357 million on HRD in the year 2011, which constituted 6.4 per cent of its payroll. The expenditure was channelled to the following projects in 2011:

· Engineering learnerships – 274

· Trainee engineers/ Learner mining officials – 104

· Bursaries – 78

· Secondary school bursaries – 155

· Experiential/ Internship – 151

The key focus for external HRD support was on engineering learnerships, technical school support and experiential internships. [59]

6.1.6. Mine Community Development

The component of the scorecard relating to Mine Community Development comprises two elements: an evaluation of consultation processes with the beneficiary communities and a calculation relating the amount spent to net profit before tax.

6.1 Consultation process (Each “yes” response is allocated one point) [60]

a) Did the company consider the profiles of relevant communities, and identify credible leaders of the communities?

b) Did the company consult with such leaders prior to the implementation of projects?

c) Did the company consult with the leaders to identify projects within the needs analysis and prioritise such projects?

d) Did the company consult with the relevant Ward/Municipality to determine possibility of partnerships in respect of identified projects and the Ward/Municipality’s Integrated Development Plan (IDP)?

e) Has provision been made for the transfer of skills and capacity building within the relevant community?

6.2 Expenditure on mine community development projects

Expenditure on community development in R million as a prercentage of the

Company’s net profit after tax in South Africa (NPAT)

(The BBBEE Codes have a target of 1 per cent of NPAT. One point is deducted for every full 0.1 per cent below NPAT target. The NPAT of the previous financial year can be used to set the target.)

In late 2011, not all companies tied their reporting on community development to the scorecard questions and measures.

6.1.6.1 BhpBilliton

With regard to community consultation BhpBilliton reported that “Material progress has been made in this area, baseline studies have been conducted in areas where we have operations, stakeholder analysis and engagements and management are carried out regularly and we record all queries and complaints arising from our communities and address them appropriately.” [61] In response to a request from the Committee for additional information, BhpBilliton reported total Community Development spending in excess of R300-million in the period from 2009 to 2011 and detailed a list of specific Corporate Social Investment (CSI) projects in mining communities that totalled some R146-million for the same period [62] The company did not record answers to the scorecard questions or calculate the percentage of net profit after tax represented by the community development spending. It indicated an 8 per cent achievement in 2011 for Mine Community Development. [63]

6.1.6.2 Exxaro

Exxaro did not comment on the processes around community consultation, but it reported that 2.5 per cent of its net profit after tax in 2010 went to community development. This was a total of R39-million and exceeded the target of 1 per cent. Some R223-million was spent on community development from the mid 2007 to September 2011 period. This expenditure was divided as follows: [64]

Sustainable Development –	36	per cent
Enterprise Development –	21	per cent
Infrastructure –	18	per cent
Education –	11	per cent
Skills development –	9	per cent
Environmental stewardship	3	per cent
Health and Welfare –	2	per cent
Sport and recreation –	0.4	per cent
	100	per cent

6.1.6.3 Gold Fields

Gold Fields outlined its philosophy of how a “self-sustaining post mining economy” would come about after the closure of a mine. This is based on plans such as the Environmental Management Plan (EMP) and the Social and Labour Plan (SLP) for each mine. R86 million was to be spent in 2011 on socio-economic development programmes. These focussed on Community Health Programmes (Health Care Centres); Education (Schooling infrastructure and support programmes) and Agriculture (Animal husbandry and training hubs). A key requirement was to design projects to be sustainable and independent of the mine.

Gold Fields evaluated its performance under this aspect of the mining charter as “50 per cent to 75 per cent - marginal to acceptable”, noting that while revised EMPs had been submitted for approval, the targets for the approval and implementation of community projects had not been met. [65]

6.1.6.4 AngloGold Ashanti

AngloGold Ashanti outlined the Socio-Economic Model that it uses when interfacing with communities, recognising that “every community is different, but each has structures around five elements”:

Land & Enviroment	The geographic area is utilised effectively.
Infrastructure	Infrastructure development is sufficient.
Social	People are healthy and educated.
Economic	There is financial liquidity and employment opportunities.
Institutional	There is a respected governance framework.

AngloGold Ashanti has engaged with the Executive Mayors and teams in the Merafong and Matlosana municipalities in Gauteng and North West Province and OR Tambo municipality in the Eastern Cape to identify Local Economic Development (LED) projects and revise Social and Labour Plans. There is a “focus on stakeholder engagement and relationship building, especially with DMR, as well as municipalities of host and labour-sending areas”. [66]

AngloGold Ashanti embarked on 616 projects/ initiatives to the value of R224-million in the period 2004 to 2010. These comprised 13 local economic development projects, 50 enterprise development projects and 553 social development projects. Cash disbursements to projects totalled R132-million while the value of non-financial commitments (infrastructure, buildings & land) was R92-million. The calculation of the value of these expenditures compared to net profit after tax was not made.

6.1.6.5 Lonmin Plc

Lonmin reported “good progress, accelerating investment in high visibility and impact projects” in 2011 but acknowledged that it had missed meeting its 2011 community development expenditure target of R44-million by R2-miilion. ^[67] Its basic service infrastructure development projects were delayed by capacity constraints in local municipalities. Lonmin indicated there was a need to respond to the “early warning of potential risk” in not meeting the 2014 targets.

Lonmin invested R194 million in community development projects between 2007 and 2011:

· Infrastructure

o Water connections to households - 805

o Access to sewer treatment – 904

o Eastern Cape Multi-purpose Centre – 1

o Silindini Bridge-Eastern Cape – 1

· Education

o Schools upgraded – 29

o Computer laboratories – 21

o Science laboratories – 8

o Learners benefiting from learner support programmes – 1980

o Educators trained – 180

· Capacity Building

o Community Members Trained – 1823

· Health

o Build and Upgrade Clinics – 7

o Mobile Clinics – 2

o Ambulances - 1

Lonmin did not respond directly to the issues raised in the new 2010 reporting template related to mine community development – consultation and the proportion of NPAT spent on community development.

6.1.6.6 Anglo American South Africa

As required by the mining charter, Anglo American aligns its community development initiatives to municipal integrated development plans (IDPs). Infrastructure, Education and Health are the main divisions into which community development initiatives fall, enterprise development being considered as a separate area. Collectively, since 2007 Anglo American has spent about R1.1-billion on various community development initiatives (including corporate social investment).

2007-2011 Sample of Mine Community Development Initiatives Supported

· Road/Bridge construction & upgrading

o 7 areas and 3 villages immediately benefited (incl. a bus/taxi rank)

· Community Centres

o 4 community halls / centres built; 1 sports ground built; 1 multipurpose community centre constructed; 2 traditional courts and offices built

· Infrastructure

o 16 schools and crèches constructed and upgraded; 15 classrooms upgraded; 4 science labs constructed and upgraded; 11 computer centres constructed and upgraded

· Health

o 6 wellness clinics constructed; 1 area provided with mobile clinics

· Water Supply

o 9 areas supplied with fresh water

· Electricity

o 9 areas in Limpopo, N. Cape and Mpumalanga supplied with electricity infrastructure; Bethal substation upgrade benefited c. 100 000 people

· Sanitation

o 6 areas received sewage works upgrades

· Education

o R250m annual spend on R&D; R128m spent on education support (incl. educator training, Maths/Science support and early childhood development)

Anglo American emphasised the role of consultation processes, but did not indicate the proportion of NPAT spent on its mine community development initiatives.

6.1.6.7 De Beers Consolidated Mines

De Beers reported a maximum point score of 15 for mine community development in 2010. It answered “yes” to all five of the questions in the report template (recording five points) and obtained the full ten point score for meeting its target for expenditure on mine community development projects. The target was of 2 per cent of net profit after tax in South Africa. De Beers reported expenditure of 2.3 per cent of its net profit after tax. This amounted to about R23 million in 2010. [68]

6.1.6.8 Xstrata

Xstrata did not comment on the consultation processes it uses in framing its mine community development initiatives, nor did it indicate what proportion of NPAT is absorbed. Over R500m had been invested in social development initiatives since 2006, exceeding the requirements under Xstrata’s Social and Labour Plans. About R154m was spent on community projects in 2010 and examples were given of ongoing key community initiatives in education, health and the provision of multipurpose community centres. [69] Both the alloys and coal divisions reported 100 per cent up to date project implementation of approved community projects.

6.1.6.9 African Rainbow Minerals

ARM did not comment on the consultation processes it uses in framing its mine community development initiatives, nor did it indicate what proportion of NPAT is absorbed. ARM reported that it invests in surrounding communities through its Social and Labour Plans, Local Economic Development and its Broad-Based Economic Empowerment Trust. In the 2011 financial year it invested R142.5 million in mine community development. In the preceding 5 years ARM invested approximately R300 million in the upliftment of communities. [70]

6.1.6.10 Impala Platinum Holdings Limited (Implats)

Implats did not comment on the consultation processes it uses in framing its mine community development initiatives, nor did it indicate what proportion of NPAT is absorbed. Implats received a Sunday Times TOP 100 CSI (Community Social Investment) Leadership Award in 2010 and 2011. Local Economic Development and housing initiatives totalled R1.8-billion in the five years to 2011 and R221-million in 2011 alone. [71] These included infrastructure development, income generating and other initiatives.

6.1.7. Sustainable Development and Growth

The revised Mining Charter included Sustainable Development and Growth as new ‘pillar’. The intention is that social, economic and environmental factors should be integrated “into planning, implementation and decision-making to ensure that the mineral and petroleum resources development serves present and future generations” [72] . The scorecard divides the measures for this aspect of the Charter into three, each of which has a 100 per cent achievement target by 2014. These are:

DESCRIPTION	MEASURE
Improvement of the industry's environmental management	Implementation of approved EMPs (Environmental Management Plans).
Improvement of the industry's mine health and safety performance	Implementation of the tripartite action plan on health and safety
Utilisation of South African based research facilities for analysis of samples across the mining value chain	Percentage of samples in South African facilities

In addition, the reporting template includes many finer elements to judge whether the measures have been achieved.

6.1.7.1 BhpBilliton

On environmental management, BhpBilliton reported a score of 11 out of 12 points for 2011, and commented that all was proceeding as per the plan (EMP). [73]

On health, BhpBilliton reported a score of 11 out of 12 points for 2011 and commented that 89 per cent of the tripartite action plan on health and safety had been implemented.

On sample analysis, the 25 per cent improvement target has been achieved, but the 2010 baseline was not indicated.

6.1.7.2 Exxaro

On environmental management, Exxaro stated that it was “Fully compliant in terms of Environmental Management”. [74]

On health, Exxaro reported that performance was on track and commented that 70 per cent of the 2014 tripartite action plan on health and safety had been implemented.

On sample analysis, Exarro indicated that it had achieved the 2014 target of 100 per cent South African based sampling.

6.1.7.3 Gold Fields

On environmental management, Gold Fields stated that it was implementing EMPs in terms of the submitted plan and in the process of submitting revised plans for approval. [75]

On health, Gold Fields reported that four per cent of the workforce had been trained as health and safety representatives, compared with the 2010 target of two per cent in the tripartite action plan on health and safety.

On sample analysis, Gold Fields indicated that 80 per cent of sampling was South African based in 2010 and that it was on track to meet the Charter improvement targets.

Overall, Gold Fields rated its performance on Sustainable Development and Growth as “50 per cent - 75 per cent Marginal to Acceptable”.

6.1.7.4 AngloGold Ashanti

AngloGold Ashanti did not include environmental management as part of its presentation on the Mining Charter. [76]

AngloGold Ashanti reported comprehensively on HIV/AIDS and TB actions but did not cover other aspects of the tripartite action plan on health and safety.

Sample analysis was not part of the AngloGold Ashanti presentation.

6.1.7.5 Lonmin Plc

Lonmin did not deal with the Sustainable Development and Growth pillar in its 2011 presentation on the Mining Charter.

6.1.7.6 Anglo American South Africa

Anglo American dealt in some detail with its commitments regarding the environment, health and safety and research and development. These were not, however, linked to the Mining Charter scorecard in the presentation.

On environmental management, Anglo American stated that it is committed to addressing environmental concerns and illustrated how its mines are dealing with water issues. [77]

On health, Anglo American stated that “management has been working with government,

unions and peers to find common solutions to achieve a breakthrough in safety in the industry”. The tripartite action plan on health and safety was “now being rolled out to operational level within our own South African business units”

On sample analysis, Anglo American reflected more broadly on its in-house R&D capability. In 2011, Anglo American’s South African business units spent R722-million on research and

development, with about 50 per cent spent locally in South Africa.”

6.1.7.7 De Beers Consolidated Mines

On environmental management, De Beers detailed a full, 12 point score for 2010, against the Charter reporting template, but awarded itself 10.2 points in a summary of the 2011 scorecard.

On the health components of the scorecard, De Beers indicated a 7.3 out of 12 performance for 2011 (no results given for 2010), stating that there was still a need for implementation of leading practices and research findings.

On sample analysis, the 25 per cent improvement target required by the Charter has been achieved, but the 2010 baseline was not indicated.

6.1.7.8 Xstrata

On environmental management, Xstrata reported that it had implemented 97 per cent of its approved Environmental Management Plans, (100 per cent in alloys and 95 per cent in coal). Xstrata has also focused on reducing its carbon footprint and usage of key South African resources in accordance with its EMPs.

On health, Xstrata reported that it had implemented all its health and safety commitments as agreed in tripartite action plan. Xstrata reported that it achieved 49 per cent reduction in total recordable injury frequency rates since 2005. Its health initiatives focused on prevention and treatment of occupational illnesses and health epidemics (HIV/AIDS and TB).

On sample analysis, according to its presentation to the committee, Xstrata utilises South African based research facilities for all its research needs. [78]

6.1.7.9 African Rainbow Minerals

On environmental management, ARM achieved 100 per cent implementation of its approved EMPs on three of its seven mines. Implementation rates were above 80 per cent at another three mines and 42 per cent at the Black Rock Manganese Mines. [79]

On the health components of the scorecard all the ARM mines achieved at least a 93 per cent implementation rate for tripartite action on safety.

On sample analysis, ARM indicated that it had achieved its 2010 target of 100 per cent of samples being processed in South African facilities.

6.1.7.10 Impala Platinum Holdings Limited (Implats)

Implats did not deal with the Sustainable Development and Growth pillar in its 2011 presentation to the Committee on the Mining Charter.

6.1.8. Beneficiation

One of the most difficult areas in which to judge mining company performance is that of beneficiation. This component is not included in the reporting template issued by the DMR in 2010. [80] The Mining Charter scorecard refers to the “contribution of a mining company towards beneficiation” as an element that will be effective from 2012 and sets as its measure “additional production volume contributory to local value addition beyond the base line”. [81]

The revised Mining Charter defines “Beneficiation” to mean “the transformation of a mineral (or a combination of minerals) to a higher value product, which can either be consumed locally or exported. The term “beneficiation” is often used interchangeably with mineral “value-addition” or “downstream beneficiation”.” [82]

Mining companies “must facilitate local beneficiation of mineral commodities by adhering to the provision of Section 26 of the MPRDA and the mineral beneficiation strategy”, but they are not obliged to engage in beneficiation processes themselves, as miners. However “Mining companies may offset the value of the level of beneficiation achieved by the company against a portion of its HDSA ownership requirements not exceeding 11 per cent.” [83]

Some clarity on Government’s thinking on beneficiation was provided by the “Beneficiation Strategy for the Minerals Industry of South Africa”, published in June 2011. [84] In August 2011, the DMR told the Committee that it was still looking at the modalities to provide a beneficiation offset to against the Mining Charter’s ownership requirements. [85]

The seven mining companies which gave presentations to the Committee on the issue each approached beneficiation in an individual manner. The summary below is not comprehensive (some of the presentations were extremely detailed), but reflects the range of responses.

6.1.8.1 BhpBilliton

BHP Billiton noted that 25 per cent of the manganese that it produces goes to its Metalloys smelter in Gauteng. [86]

6.1.8.2 Exxaro

Exxaro stated that much of its involvement in beneficiation was in partnership with other enterprises and customers. But beneficiation is part of its core business strategy. One example was the establishment of a local production facility for new titanium metal production as part of its mineral sands operations in KwaZulu Natal. It was also involved in downstream beneficiation opportunities for titanium slag and zircon. Another example was the production of char and coke by Exxaro Reductants. Exarro supports medium to long-term research in beneficiation through its involvement with SAMMRI (the South African Minerals to Metals Research Institute). This project develops value-adding technologies and broadens the skills base in South Africa. [87]

6.1.8.3 Gold Fields

Gold Fields did not report on beneficiation issues in 2011, noting that this measure – of the extent of local value addition beyond the baseline – was only effective from 2012. [88]

6.1.8.4 AngloGold Ashanti

AngloGold Ashanti’s largest beneficiation commitment is its long-time 25 per cent investment in Oro Africa, South Africa’s largest manufacturer and exporter of jewellery. Oro Africa sells 18 000 kg of jewellery per year. AngloGold Ashanti has 53 per cent ownership in the Rand Refinery, which refines most of South Africa’s gold, and in the Gold Zone. The Gold Zone comprises South African Manufacturing Jewelers, Gold Reef City Mint, Intsika Skills Beneficiation Project and the Ekurhuleni Jewelry Project. [89]

6.1.8.5 Lonmin Plc

Lonmin stated that its 2014 plan to contribute to beneficiation goals under the Mining Charter was “still undefined” [90] in 2011. It outlined several aspects of its involvement in beneficiation apart from its provision of inputs for manufacturing (Lonmin delivered 16 per cent of its total PGM production in 2011 to the local auto catalytic converter industry). Lonmin contributed to the discussions on the government policy framework on beneficiation through the Platinum Beneficiation Committee and identified downstream opportunities and made strategic recommendations to the DMR for local value addition to minerals. Lonmin also identified the factors which need to be addressed to enable greater levels of beneficiation. These were:

· Coordinated interdepartmental action from government to advance viable beneficiation models.

· Alignment in targeted projects for optimal impact.

· Infrastructure bottlenecks in transport, energy and water must be addressed.

· A more enabling industrial, trade, tax and skills policy environment is needed.

6.1.8.6 Anglo American South Africa

Anglo American commented that the original 2004 Mining Charter “provided little clarification as to the definition and meaning of beneficiation for the mining industry. Despite this, Anglo American continued to conduct extensive work and research into formalising its beneficiation strategy and approach at Business Unit level. In 2009, position papers for the beneficiation of Anglo American’s core commodities in South Africa (iron ore, platinum and thermal coal) were developed for approval at ExCo level within each respective Business Unit (Kumba Iron Ore, Anglo American Platinum and Anglo American Thermal Coal). Since this process was initiated, work has been under way to further develop the initiatives already implemented to enhance beneficiation in line with section 26 of the MPRDA and the new Beneficiation Strategy [91] . Beneficiation initiatives have been implemented across all of Anglo American’s business units in South Africa and have directly contributed to job creation.” [92]

Anglo American gave a detailed presentation of beneficiation initiatives and support measures across its platinum, coal and iron ore operations. These included:

· Collaboration with the Department of Science and Technology, providing seed capital through the R100 million PGM Development Fund to connect international partners with the South African fuel cell development program.

· Measures to process coal before sale to make it more attractive to customers and efforts to find productive uses for the by products and waste products from the combustion of coal.

· The upgrading of what was formerly waste material into iron ore. (20 per cent of iron ore production in 2010 was sold to the South African steel production industry.)

6.1.8.7 De Beers Consolidated Mines

De Beers reported that it is involved in the following beneficiation initiatives:

· Harry Oppenheimer Diamond Training School.

· Kimberley International Diamond and Jewellery Academy (in partnership with the Northern Cape Provincial Government).

· Over 40 per cent of diamonds produced are sold to local cutters and polishers (2010 average was 53 per cent. [93] )

6.1.8.8 Xstrata

Xstrata reported that it had spent R8.5-billion on beneficiation initiatives in South Africa by 2011. These included R6.5-billion on the two phases of the Lion ferrochrome smelter in Steelpoort and over R2-billion on UG2 chromite recovery and agglomeration facilities. Xstrata saw itself as “a meaningful contributor to the achievement of Government‟s beneficiation strategy through its leadership position in the global ferrochrome industry. Xstrata is the chief sponsor of the drive to curb unbeneficiated chrome ore exports in favour of growth in ferrochrome production and, by implication, job creation in South Africa.” [94]

6.1.8.9 African Rainbow Minerals

ARM did not report on beneficiation issues. [95]

6.1.8.10 Impala Platinum Holdings Limited (Implats)

Implats did not report on beneficiation issues. [96]

REFERENCES (Section 6.1)

Submissions by the ‘top ten’ mining companies

African Rainbow Minerals (ARM). (2011) ARM’s implementation of the Mining Charter Presentation to the Portfolio Committee . 9 November. Available at: <www.pmg.org.za> [Accessed 20 March 2013].

AngloGold Ashanti (2011) Presentation to the Parliamentary Portfolio Committee on Minerals: 2004 – Current . 16 November. Available at: <www.pmg.org.za> [Accessed 18 March 2013].

De Beers. (2011) De Beers in South Africa: Presentation to the Portfolio Committee on Mineral Resources . 2 November.

Exxaro Resources. (2011) Progress Report on the Mining Charter. 9 November. Available at: <www.pmg.org.za> [Accessed 19 March 2013].

Farmer, I. (2011) Lonmin plc: Presentation to the Portfolio Committee on Mineral Resources . 2 November.

Gomwe, G. and Zikhali, L.(2011) Transformation in Anglo American South Africa: Presentation to the Portfolio Committee on Mineral Resources . 2 November.

Implats (2011) <Undated and untitled presentation to the hearings on the Mining Charter>. 9 November. Available at: <www.pmg.org.za> [Accessed 22 March 2013].

Moodley, R. (2011) BHP Billiton –Implementation of the Mining Charter and Job Creation . 9 November. Available at: <www.pmg.org.za> [Accessed 19 March 2013].

Moodley, R. (2011b) BHP Billiton SA – Transformation beyond compliance . 25 November. <further submission to Portfolio Committee on Mineral Resources>

Turner, P. (2011) Gold Fields: Presentation to Parliament . 15 November. Available at: <www.pmg.org.za> [Accessed 18 March 2013].

Xstrata South Africa (2011) Presentation to the Parliamentary Portfolio Committee. 9 November. Available at: <www.pmg.org.za> [Accessed 22 March 2013].

Xstrata South Africa. (2011) Presentation to the Parliamentary Portfolio Committee . 9 November. Available at: <www.pmg.org.za> [Accessed 18 March 2013].

Other Submissions and DMR documents

Barker, F., Baxter, R. and Sibiya, B. (2011) Chamber of Mines Presentation to the Portfolio Committee on Mineral Resources . 25 March.

Bell Dewar Inc. (2011) Submission to the Portfolio Committee on Mining. Review of the Broad-based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry. 25 March.

Business Unity South Africa (BUSA) (2011) Submission on the Charter for the South African Mining and Minerals Industry (Mining Charter) . 24 August.

Chamber of Mines of South Africa. (2011) Progress with the implementation of the Mining Charter . Presentation to the Portfolio Committee on Mineral Resources. 24 August

Eskom. (2011) Eskom’s commentary on the review of the Mining Charter. 11 March. <submission to the Portfolio Committee on Mining>.

Webber Wentzel. (2011) Submissions to the Parliamentary Committee on Mining on the Amendment of the Broad-based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, published on 13 September 2010 (“the Revised Mining Charter”). 26 August. Available at: <www.pmg.org.za> [Accessed 15 March 2013]

Department Mineral of Resources. (2012) Minerals Statistical Tables 1990 – 2011 Directorate: Mineral Economics Bulletin B1/2012. Fourteenth Edition. November.

Department Mineral of Resources. (2011) Beneficiation Strategy for the Minerals Industry of South Africa . June.

Department Mineral of Resources. (2010) Mining Charter Impact Assessment Report, 2009. Available at: <http://www.dmr.gov.za/mining-charter.html> [Accessed May 26 2011].

DMR (2010a) Amendment of the Broad Based Socio Economic Empowerment Charter for the South African Mining and Minerals Industry . 20 September. Available at: <http://www.dmr.gov.za/mining-charter.html> [Accessed 18 March 2013]. <The Mining Charter >

DMR (2010b) Scorecard for the Broad Based Socio Economic Empowerment Charter for the SA Mining Industry. Available at: <http://www.dmr.gov.za/mining-charter.html> [Accessed 18 March 2013].

DMR (2010c) Mining Charter Reporting Template . Available at: <http://www.dmr.gov.za/mining-charter.html> [Accessed 18 March 2013].

POSA (Parliament of South Africa) (2011c) Portfolio Committee on Mineral Resources. Public hearings on Mining Charter. E249. 24 August 2011. Disc 1 of 2. [DVD]

PMG (Parliamentary Monitoring Group) audio recording 1/11/2011 Part 1 of 3: Introductory remarks and Anglo American South Africa. Length 02:12:32. PC Min: Public Hearings on the implementation of the Mining Charter and job creation efforts

6.2. Report by the 10 Mining Companies on their Job Creation Initiatives

In addition to reporting on compliance to the Mining Charter, the mining companies were also required to report on their job creation initiatives, especially for the youth. The reason for the request was a result of the Committee observation during oversight visits and public hearings where such engagements were conducted during the normal working hours but were largely attended by the youth. This raised concern of high levels of youth unemployment among the mining communities.

The mining companies reported as follows:

6.2.1. BhpBilliton

BhpBilliton reported that it recently completed two projects, namely Douglas Mine Optimisation and Klipspruit New Mine. It invested R6.8 billion in Douglas Mine Optimisation and R600 million in Klipspruit New Mine resulting to the creation of 100 and 916 jobs, respectively. It further reported that it envisage investing R1.5 billion in Wessels Graben Expansion project, R800 million in Hotazel Town Development and R715 million in M14 project in the future. BhpBilliton listed the additional job creation initiatives as follows:

· High school artisan project

· Artisan learnership

· Production/ process learnershiop

· Social and Labour Plan (SLP) bursaries

· Skills Development youth project

However, the company did not state the number of jobs that went to the youth. The Committee was impressed about the amount invested but felt that the investment yielded fewer jobs. The members of the Committee also raised concern about the commitment of the company to South Africa.

BhpBilliton assured the Committee of its commitment to the country as displayed by the size of its investment in manganese and coal in South Africa.

6.2.2. Exxaro

Exxaro approach to youth development is premised on a progressive approach from Basic Education (Ensuring well-functioning schools and professional career guidance),Skills Development (technical skills development), Tertiary Education (bridging programmes bursaries), Business Incubation (business skills development, mentorship and coaching aligned with procurement at the mine) to Business Hubs. It is envisaged that each business hub will incubate 20 new enterprises per annum resulting in 100 new jobs. It is further expected that by 2015, 38 business hubs will be established thereby creating 760 enterprises. At a ratio of 5 jobs per enterprise this translates into the creation of 3 800 jobs. The Grootegeluk Medupi Expansion Project is expected to create 11 470 jobs by 2012.

6.2.3. Gold Fields

Gold Fields made the following commitments in support of job creation:

· To increase bursary awards for engineering students by 20 per cent in 2012;

· To expand experiential learning opportunities for MQA/DMR sponsored engineering graduates. An additional 45 section 18.2 engineering learners will be taken in 2012 in partnership with the Department of Labour and MQA;

· To facilitate vacation work opportunities for 250 engineering students per annum, 50 per cent of which are non-Gold Fields bursars;

· To establish partnerships with FET colleges to prioritise technical qualifications for employees;

· To continue to contribute to the Mining Education and Training Fund (METF-a fund that sponsors university mining schools) and considering increasing the annual levy by up to 50 per cent; and

· To consider giving a once-off contribution to a National Youth Development Fund.

It was further reported that the R9 billion investment at the South Deep mine should lead to about 1 000 new jobs by 2015.

6.2.4. AngloGold Ashanti

AngloGold Ashanti’s (AGA) job creation and youth development plan for 2012 to 2014 is focused on education and skills development. It involves funding 2 200 learners and investing R33.6 million in Minerals Education Trust Fund. AGA intends creating 2 500 additional positions for community youth.

However, AGA cautioned that the decline in gold mining is inevitably going to lead to a reduction in the number of jobs. AGA noted that in 2005 it mined 80 000 tonnes of gold and is currently down to 50 000 tonnes. When asked by members about the number of employees that are currently employed by AGA, the committee was informed that the establishment consists of 30 000 employees. AGA projected that in future the establishment might be down to 10 000 employees.

The Committee wanted to know about the AGAs expansion plan in South Africa. AGA informed the Committee that there are two expansion plans that can only work when experimental technology plan worked. The first aspect is the increase of speed of mining if new technology worked that would result in lower ore bodies being mined and thus more jobs being created. The other aspect was looking into international suppliers of equipment creating capability in South Africa, which would also lead to job creation.

6.2.5. Lonmin Plc

Lonmin Plc’s job creation initiatives focused on interventions to grow skills base through successful training directives with a 2012 budget of R260 million. It also reported that it is advancing community initiatives to further job creation initiatives. Lonmin plans to invest $2 billion over four years in order to grow production from 700 000 oz and in the process create approximately 2 000 new full time jobs. It reported that it had created 5 000 jobs in the past two years. However, Lonmin emphasised that the local and international investment climate impacted on its ability to be successful on job creation.

When asked to further clarify its job creation initiatives, Lonmin informed the Committee that there were roads required in its mining areas, and this could lead to job creation. The Committee also raised concern about the R5 million of the amount earmarked for SLP projects in the North West Province that had not been spent resulting in possible retardation of job creation. Lonmin responded that the underspending had resulted from municipal delays, since the funds had been intended for a water reticulation project.

Lonmin addressed the issue of job creation in general and did not have specifics for youth employment.

6.2.6. Anglo American South Africa

Anglo American South Africa (AASA) informed the Committee about the Zimele Enterprise Development/ Job Creation Funds, which advances loans to Small and Medium Enterprises (SMEs). The Zimele project was done through 32 small business hubs located across the country and in some labour sending areas. It reported that the Zimele initiative had created and sustained 18 267 jobs since 2008. There were about 1 300 businesses across the Fund, each generating about R1.9 billion turnover. The AASA investment had been R519 million. AASA informed the Committee of its commitment to generating employment in the SME sector. The SMEs were located in the areas around the mines in the poverty nodes. It was reported that present, 35 per cent of entrepreneurs were women and 48 per cent were the youth. AASA made a special commitment to the Call to Action by the United Nations, and it projected that by 2015 it would have created 25 000 employment opportunities in this particular initiative.

The Committee expressed concern about high levels of unemployment, poverty and inequality and wanted more information on job creation initiatives. AASA informed the Committee that besides the Zimele initiative, the Pipeline Project involving the investment of R30 billion would generate 19 800 jobs. It further reported to the Committee that 3 000 jobs had been created through Corporate Social Investment projects. AASA estimated that, overall, 40 000 jobs had been created. Other job creation projects included the approved ostrich farming in the Northern Cape, which was expected to create about 850 jobs.

6.2.7. De Beers Consolidated Mines

DBCM conceded that the industry might not have done enough, especially for young people, to ensure that they had hope and opportunities. DBCM had adopted the AASA’s Zimele model, and it had a target of creating 5 000 jobs by 2014. It had started the programme a year and a half ago. It funded 106 companies and employed about 600 people. It reported that 50 per cent of these companies were owned by the youth and 36 per cent were owned by women. DBCM reported that it had created five strategic hubs in strategic areas near its operations. The biggest challenge in these areas was unemployment.

In response to the question on adoption of the Zimele model, DBCM informed the Committee that the model was adopted as best practice since it was developed over 20 years and had been proven to work. On the question of sustainability, the Committee was informed that a number of entrepreneurs were already coming back for additional funding, which clearly demonstrated the success of the businesses.

6.2.8. Xstrata

Xstrata reported that it had invested R68 billion in South Africa since acquiring Duiker’s coal assets in 2002, creating a significant number of job opportunities. It employed 25 700 workers, of which 13 000 were permanent. It further reported that 7 900 permanent jobs would be created from new projects. The new projects are Goedgevonden worth R4.1 billion and expected to create 532 permanent jobs; Atcom East project worth R3.5 billion and expected to create 263 permanent jobs; Lion II project worth R5.1 billion and expected to create 1 042 jobs; and Eland project worth R4.5 billion and expected to create 3 650 jobs. Xstrata informed the Committee that it intended to increase the number of youth employment through investment in new projects within the period of four years. The youth is expected to comprise 39 per cent of the employees at Goedgevonden and Atcom East projects. At Lion II and Eland projects the youth is expected to comprise 52 per cent of the total workforce.

When asked if the new job creation projects were already in operation, Xstrata informed the Committee that the projects were approved.

6.2.9. African Rainbow Minerals

African Rainbow Minerals (ARM) reported that the number of their employees had increased from 11 805 in 2006 to 28 704 in 2011. For the 2011 financial year, ARM created three permanent positions per calendar day and during the last five financial years it created 2.5 permanent jobs per calendar day. This amounts to 4 553 permanent jobs created in the past five years. ARM informed the Committee that it was its policy to, as far as possible recruit locally in order to address high unemployment among local communities. ARM projected that it will create 10 000 jobs in the next five years, once logistical constraints are resolved and there is significant growth in their production volume.

6.2.10. Impala Platinum Holdings Limited (Implats)

Implats told the Committee that it was concerned about youth unemployment and in response to this it had put 389 people through the Novice Training Program and it hoped 140 youth per month could be put through this program.

The Committee probed Implats on its insignificant contribution to job creation. In response Implats informed the Committee that the aim of training 140 youth per month was to give 1 500 people annually access to the mining job market. It however mentioned that the company would have to grow at a substantial rate in order to be able to absorb them. Implats is therefore training for the mining industry in general. It is projected that the Leeuwkop project would create 5 000 new jobs and many other jobs in the process of developing the project.

7. Findings and Observations

7.1 Summary of salient issues raised by different stakeholder groupings

The Portfolio Committee on Mineral Resources, having met with all stakeholders as mentioned above made the following observations:

7.1.1 Mining Companies/ Business

· Some mining companies supported the revised Mining Charter while other companies supported the amendments with some reservations.

· The mining companies represented by the Chamber of Mines (COM) were aware of and expressed support for the amendment of the Mining Charter. They also expressed appreciation of the reasons behind the amendments.

· The mining companies represented by the South African Mining Development Association (SAMDA) were aware of the amended Charter but concerned about the failure of the majority of the mining industry to meet the transformation targets. They pointed to what they described as “disturbingly low targets” for employment equity. There is a lack of clear targets for black women in the revised Charter. SAMDA recommended that new targets for black people, black women and black disabled employees should be set. These targets should be in line with representation in the economically active population.

· Business represented by BUSA was concerned about non-alignment between the Mining Charter and the Broad-Based Black Economic Empowerment Codes of Practice, which resulted in some companies having to double report. This concern was also shared by SAMDA. BUSA drew attention to an important weakness in the Mining Charter: there is no requirement for verification of the scorecard by an independent body

7.1.2 Organised Labour

· All unions were aware of the amendments to the Charter.

· The National Union of Mine Workers (NUM) was dissatisfied with the slow pace of transformation in the mining industry and recommended that section 47 of the MPRDA be applied to non-compliant companies.

· The NUM also pointed out that the designation of all women as Historically Disadvantaged South Africans (HDSAs) had an unintended consequence of the promotion of white women to key positions at the expense of other HDSAs.

· National Union of Metal Workers of South Africa (NUMSA) was in favour of alignment of the Charter with the Industrial Policy Action Plan.

· Solidarity favoured Employee Share Ownership Schemes as a model for community ownership and wealth distribution.

7.1.3 Youth Organisations

· Youth organisations that presented were aware of the amended Charter and were in support of it.

· Merafong Youth Forum was concerned about skills development issues and said that bursaries should be provided to all deserving students.

· National Youth Development Agency (NYDA) proposed the inclusion of the youth as a designated group with a five per cent compliance target for all elements of the Charter.

7.1.4 Traditional Leaders

· The Taung Traditional Leadership was aware of and supported the revised Charter while the Royal Hlangwana House was unhappy about not being consulted.

· The Taung Traditional Leadership wanted clarity on the administration of the social development fund to which multinational suppliers of capital goods for mines are required to contribute.

7.1.5 Mining Communities

· Some mining communities e.g. Merafong Mining Community, were not aware of the Charter and complained of lack of consultation.

· Communities also complained that the mining companies favoured non-South Africans over local persons.

· The small-scale marine miners of the Northern Cape were concerned that, with the exception of Alexkor, none of the major mines were meeting the provisions of the Charter .

7.1.6 Women in Mining

· SAWIMA was aware of the amended Charter.

· SAWIMA pointed out the inconsistencies with regard to criteria for issuing mining permits e.g. some provinces use locality while others use BEE status as a criterion.

· SAWIMA also recommended the establishment of a specific body/ tribunal to monitor compliance to the Charter.

7.1.7 Businesses related to mining

· Bravura Consulting noted that there was no requirement for verification of the completed score card by an independent agency. This observation was shared by BUSA. Bravura Consulting also wanted compliance to be clearly defined.

· The Capital Equipment Export Council wanted the Charter to be amended to give preference to South African manufactured products in mine procurement policy. COSATU was also in favour of this view.

· Webber Wentzel (Law firm) was concerned about the legal status of the Charter and “inadequate” definition of terms. Concerns about the vagueness of the wording of aspects of the Charter were also raised by Eskom and Bell Dewar.

· Rocha Consulting wanted clarity on how beneficiation offsets would promote the ownership of and participation in beneficiation by HDSAs.

7.2 General observations

· The slow progress of transformation in the mining industry was the dominant theme in the hearings. [97] Disappointment with the pace, depth and scope of change was voiced most strongly by people from the mining communities who gave evidence in the hearings. In most cases, their comments were not directly about the Mining Charter, but about the mining industry, about the Department of Mineral Resources and about why such meagre benefits are seen to flow to ordinary citizens and mining communities from South Africa’s much vaunted mineral wealth.

· All stakeholders support the transformation of the mining industry in principle.

· The Chamber of Mines, representing some ninety per cent of the industry, acknowledged that the mines could have done more in the way of promoting transformation under the original Charter, but felt that the revised Charter should be given an opportunity to show results. The Chamber made specific suggestions on how implementation efforts could be more intensive. These included clear guidelines and feedback from the DMR and the independent verification of compliance claims. [98]

· Submissions by the department (DMR), the South African Mining Development Association (SAMDA) and the National Union of Mineworkers (NUM), for example, all signalled a view that transformation could be accelerated by attaching strong punitive measures to non-compliance with the Mining Charter. This could include the suspension or cancellation of rights under Section 47 of the MPRDA and other penalties under section 99.

· There were many suggestions for further amendments to the Mining Charter – to include clearer targets for the employment of women, youth and people with disabilities; to improve the quality of consultation with mining communities and to create procurement incentives so that mines would buy more local and South African manufactured products.

· The most striking feature of the hearings was the total lack of agreement on whether mines had complied with the Mining Charter or not.

· The Mining Charter Impact Assessment produced by the DMR in 2009 presented figures that differed drastically from those relied upon by the Chamber and by the ten mining major companies in 2011.

· The differences in judgements on compliance are apparently due to the use of different formulas and assumptions to calculate the measures. This view was shared by the NUM.

Possible questions for the workshop

· Many of the people who participated in the hearings said that the reason for the slow pace of transformation in the mining sector was the non compliance by the mining companies with the terms of the Mining Charter. The major mining companies on the other hand, said that they had largely complied with the Charter. It was not possible, from the available evidence, to disprove this claim.

· The question then becomes a different one. If the mining companies have complied with the Mining Charter and if transformation in the industry has still been weak, does that not mean that another avenue for hastening transformation in the mining sector is called for?

· Is the Mining Charter really an effective tool for transformation? The hearings on the Mining Charter suggest that it has clearly failed this test. Calling for more intense implementation of the Charter is not going to lead to more transformation than what has been experienced since 2004.

8. Recommendations

The Portfolio Committee on Mineral Resources having heard evidence from all stakeholders listed above, recommends the following:

The Minister of Mineral Resources should ensure that:

· The DMR considers conducting road shows to inform the mining communities about the revised mining Charter;

· The DMR and relevant stakeholders develop a common formula to be used when assessing ownership in the mining industry and all parties should be compelled to use the same formula;

· The DMR strengthens its compliance monitoring capacity or consider appointing an independent agency to verify the completed scorecards;

· The DMR submits summary of bi-annual reports submitted to the department by the mining companies to determine the level of compliance and transformation by 05 July 2013 and also make presentation to the Portfolio Committee on Mineral Resources;

· The DMR should report back to the Committee on all recommendations submitted; and

· The Mining Industry Growth, Development and Employment Task Team (MIGDETT) makes a presentation to the Committee on their role and activities at the envisaged workshop pertaining to Mining Charter.

9. Conclusion

The public hearings on the Mining Charter and the “transformation process in the mining industry” [99] were held just one year before the Marikana tragedy brought into sharp focus the socio-economic problems that confront the mining industry, quite apart from business difficulties. The phrase “ticking time bomb” was used several times in evidence to the Committtee. And the Chairman repeatedly voiced concerns well known to all members of the Committee:

“When we conduct oversights, we come back depressed. Because before you enter into a mine, you walk through a sea of poverty. ... In our own experience these Social and Labour Plans are indeed not implemented...Mining communities lament that here, within our area we extract the wealth of the country but there is no drop that comes back to us as the mining community.” [100]

To the first set of hearings with the ‘top ten mining companies’, the Chair said:

“The Portfolio Committee has had oversight visits across the country...where we would be overseeing the compliance on the mining laws but also the mining charter as well as the social and labour plans implementation. What we have found, which is in our reports that are in the public domain, is an appalling situation. Mining communities specifically are trapped in abject poverty. What we have seen is a picture that is not good at all. It does not auger well for the future of the country... Your words will not speak more than what we have seen in the actual situation” [101]

The Marikana tragedy – and the ongoing lack of peace in the mining sector in 2013 – provides an even more urgent context for the workshop that will consider the findings and recommendations that emerged from the 2011 public hearings on the Mining Charter.

Report to be considered.