In the face of challenges that range from increasing regulatory changes, power and labour issues and rapid changes in technology, the mining industry remains a key contributor to SA's GDP.
The Minerals Council SA’s Facts & Figures 2021 report places the sector's contribution at about 8.7% of GDP for having injected R481bn into the economy and provided about 460,000 jobs in 2021.
As the mining sector showed an impressive recovery from the pandemic, and displaying its agility, it still has a long way to go to meaningfully transform and empower SA's previously disadvantaged.
According to the Sanlam Gauge 2022 report, which places the sector’s B-BBEE achievement at level 4, based on generic sector codes, the mining division shows commitment to transformation despite the challenges that plague it.
It met the targets for black equity ownership and socioeconomic development, scoring 100% in both elements and 84.43% for enterprise and supplier development.
However, the scores for management and control (59.16%) and skills development (67.5%) indicate that a lot of work needs to be done to achieve these targets.
Empowerdex ratings agency MD Lerato Ratsoma says while strides have been made by SA Inc to transform, now is not the time to pat each other on the back.
“We have made strides from where we started in 1994 but there is still a lot of work to be done. Our ownership target on the scorecard is sitting at 25% black ownership, and we need to eventually get it up to 51%.
“The point of the Sanlam Gauge is to determine where we are in relation to where we want to be. We need to look at what it is we are trying to achieve and not only focus on the scorecards,” she says.
Despite the notable gains, the sector continues to be mired in disputes with its regulator, the department of mineral resources & energy.
Explaining the legal wrangles plaguing the sector, senior policy analyst at the Minerals Council SA, Fundiswa Ndaba says the industry took issue with aspects of the 2018 Mining Charter, which have since been set aside.
“It would be unfair to conclude that the mining industry is not committed to transformation based on the outcomes of their B-BBEE scores — a scorecard that is a legal requirement by the JSE for compliance purposes.
“Transformation in the sector should be measured using the 2018 Mining Charter scorecards linked to the mining rights owners’ licences to operate,” says Ndaba.
She adds that before the JSE required all listed companies to publish a compliance report on their B-BBEE status in 2017, only mining companies that supplied Eskom and other government entities elected to have BEE certificates.
The contentious clause of the 2018 Mining Charter pertains to the requirement for mining entities to allocate 60% of their procurement spend to locally manufactured content from SABS certified suppliers, she says.
“As an industry, we are committed to complying with the Charter, but not the 60% local content target because it is too stringent, impossible to meet and the same requirement does not apply to other sectors of the economy.”
Econobee verification agency director Muriel Mushariwa is also disenchanted by sections of the Charter, particularly its target of 10% women representation in top management which she finds to be “overly ambitious”.
“There is a long way to go before this 10% target is reached considering that the first woman mining engineer to graduate in South Africa was only in 1992, while the very first black woman mining engineer only graduated in 2004.”
Mushariwa says the mismatch between employment equity requirements and the B-BBEE codes of good practice hampers the transformation and advancement of black women in the mining sector.
“Not only are black women pushing against a concrete ceiling of cultural and gender stereotypes but they are only 18 years in and playing catch-up with their education,” she says.
Siyandisa Verification Solutions co-director Cedric Singh says he advises entities to be deliberate and strategic about transformation by setting up committees that meet regularly to map out and drive transformation.
To attract and retain top black talent and meet management control targets, Singh advises that companies look inward and create a conducive environment for human resources.
“There’s a frustration that once you invest in and polish a rough diamond, suddenly everyone wants it for themselves. There is a lot of competition for skilled black executives and they are regularly headhunted by different companies.”
Tebello Chabana, senior executive for public affairs and transformation at the Minerals Council, says transformation remains a critical business imperative for the mining industry and that the sector will continue to drive transformation by engaging the department of mineral resources & energy and all its stakeholders to co-create solutions for the provisions of the charter that were set aside.
• This article was paid for by Sanlam.
