FERIAL HAFFAJEE: Is this how Mantashe got the mining job?
BUSINESS LIVE / 04 MARCH 2018 - 00:14 / FERIAL HAFFAJEE
The anatomy of how Cyril Ramaphosa engineered the mining deal
Mineral Resources Minister Gwede Mantashe, along with three other former trade unionists, played a critical role in ending a long-term political crisis between the mining industry and government that ended in his appointment this week.
The story ends over two dramatic days in February, but goes back to mid-2017.
New Mineral Resources Minister Gwede Mantashe with President Cyril Ramaphosa during the swearing-in of ministers on Tuesday. Picture: ESA ALEXANDER
It is the evening of Friday February 16 and President Cyril Ramaphosa is delivering his first state of the nation address. Among many promises, he slots in this one for the scarred mining industry:
"Mining is another area that has massive unrealised potential for growth and job creation. We need to see mining as a sunrise industry. This year, we will intensify engagements with all stakeholders on the Mining Charter to ensure that it is truly an effective instrument to sustainably transform the face of mining in South Africa."
This is a new mood. Years of internecine skirmishes had broken out into open warfare: the Chamber of Mines was in serial lawfare with now former mineral resources minister Mosebenzi Zwane.
The fights ranged from his unilateral imposition of an industry empowerment charter and a moratorium on the granting of mining rights to illegal work stoppages imposed by the mines inspectorate. It was a big hole.
Two nights after Ramaphosa's promise, the Presidency put out a statement that substantially filled the hole and quickly rehabilitated the mining problem. It read: "The Chamber of Mines, on behalf of its members, has agreed jointly with the Department of Mineral Resources to postpone its court application in respect of the reviewed Mining Charter, which was due to be heard in the High Court on 19 to 21 February. The postponement serves to allow parties the space to engage and find an amicable solution."
The story goes back to the middle of 2017 and indicates how Ramaphosa may run difficult economic policy.
The president (then deputy president) leveraged trade union contacts and networks to open up informal talks with the Chamber of Mines. The then secretary-general of the ANC, Mantashe, was his pointman in the negotiation.
As a former mineworkers' leader and a former mining boss, Ramaphosa knew the industry and how serious the political crisis was.
Zwane was isolated in the months of talks that followed and when the coast was clear and he was in charge, Ramaphosa acted to break the most serious log-jam to date in the history of post-apartheid mining.
It is for this reason that Mantashe's appointment was warmly welcomed by the industry this week. He is a unionist and a communist, but his role in ending the charter crisis has earned him respect and kudos. "He is pro-mining, even if he is not necessarily pro-business," said a senior mining executive, adding that the appointment "has brought peace of mind to the industry".
Let's go back a little.
In the middle of last year, Zwane imposed the Mining Charter on the industry by gazetting it while negotiations were still running. In the splash of an inkwell, he signed off on a steep new increase in the black-ownership targets for the industry: from 26% to 30%, along with other clauses that took an already jumpy industry by surprise.
The Chamber of Mines went ballistic.
In fact, Zwane intended to go much further. On the final day of the ANC policy conference in Johannesburg in July, Zwane said there was support in the governing party to lift ownership to 50% plus 1 and that he intended to do so.
But before he could do that, the Chamber of Mines launched two court cases against the minister within weeks of each other - one to set aside the charter and the second to secure an interdict against Zwane's unilateral moratorium on the granting of mining rights.
"The chamber always said court was a last resort. Zwane could simply not be engaged," said an industry representative. The crisis was headed in one direction - south. And South Africa seemed destined to miss out on a third mining boom.
Now it turns out that the crisis in mining was broken by three former trade unionists who brought all their negotiating nous to the table in conjunction with Ramaphosa, who was not always available for talks but was kept in the loop.
Former National Union of Mineworkers general secretary Frans Baleni played a central role in ironing out the impasse.
Together with Mantashe and the ANC's head of economic transformation, Enoch Godongwana, he back-channelled in talks with the mining industry in long meetings that often ended over a good whisky, said a party to the meetings. The former director-general of the Department of Mineral Resources, Sandile Nogxina, who is the architect of the mining rights regime, helped in negotiations too.
Negotiators said the chamber's former president, Mike Teke, played a key role in bringing a furious industry around to negotiation and out of the arena of legal conflict. "He persuaded the Chamber of Mines to come around. He was able to promise that should Ramaphosa win [at the party's presidential elective conference in December], Zwane would go."
It was a close race. In October last year, Zwane told reporters: "We already know who will be president ... It's a done deal. We are not stressing. The policies won't change. In January there will be new leadership and policies will remain the same."
But Zwane miscalculated and Ramaphosa won. The team who had been in talks with the miners ensured that there was a line for the industry in the state of the nation address, which infected the country with a new mood. It infected the industry too.
Chamber of Mines president Roger Baxter was at parliament for the address and he and Ramaphosa spoke on the phone two days later. Hours after that, the charter crisis was out of court and back on the table.
"It was a leap of faith because there was trust, not absolute trust, but some trust," said the mining executive who spoke to Business Times. "[It was deemed] unnecessary to spend three days in court.
It felt like there was finally a president who recognises the potential of mining to [generate] revenue, to influence foreign investors and help employment."
Days later, Zwane was indeed gone and Mantashe was appointed to replace him. He has promised to negotiate and mint a new charter in three months' time.
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