1. TRANSFORMATION IN SA MINING INDUSTRY Thibedi Ramontja: Dept of Mineral Resources

2. Structure Background and Context of Transformation Summary of Status of Mining Pre-1994 Evolution of the Legislative Framework for Transformation in the Mining Industry – Post 1994 Observations and Challenges Conclusions

3. Background and Context: Status of Mining Pre-1994  Dominated by few companies – Mainly six big companies (AAC, Gold Fields, Anglovaal, JCI, Rand Mines and Gencor)  They owned and hoarded most of the mineral resources of the country  Black people were historically excluded from meaningful participation  Majority of the mineworkers were housed in single sex hostels/ compounds  Migrant labour system was an integral part of the industry

4. Background: Evolution of Transformation – Post 1994  The Journey of Transformation began with the Green Paper and White Paper on Minerals and Mining Policy. This requires that the industry be transformed in terms of: 1.Ownership and Management –Deracialisng of business ownership –Workers being empowered through ESOP’s, and meaningful participation in management of SA mines

5. Background: Evolution of Transformation 2. On people and environmental Issues: It is required that the following be addressed: –Mine Health and Safety –Human Resources Development –Housing and Living Conditions, and Migrant Labour –Downscaling.

6. Background: Evolution of Transformation  Policy was translated into Legislation through the, MHSA and MPRDA, which provided for; a) State custodianship of the country’s mineral and petroleum resources b) Equitable access to South Africa's mineral resources c) Expanding opportunities for HDSA’s to enter the industry d) Development of the Mining Charter i.t.o. sect.100 of the MPRDA

7. Background: Evolution of Transformation The Mining Charter has 9 elements – covering critical aspects of transformation, including Ownership – an element that caters for ESOPS

8. IMPLEMENTATION OF THE MINING CHARTER: SELECTED OBSERVATION AND CHALLENGES

9. Observations and Challenges 9 ElementObservation/Challenges Ownership Current Situation: No new mining right is granted without 26% ownership in place There are a nuber of new companies that emerged e.g. ARM, Mvelaphanda, Exarro, UMK, Makau, Kalagadi Manganese, Sekoko, Shanduka, Holgoun, Kuyasa coal, Continental coal etc.

10. Observations and Challenges 10 ElementObservation/Challenges Ownership Challenges resulting in slow pace of transformation Quality of most transactions remain a challenge Number of transactions under water due to debt levels Lack of sustainability of most transactions due to lack of access to capital ESOPs and community schemes are heavily indebted Most deals include or indicate women but there are concerns about their active participation Youth participation must be accelerated The notion of “Once empowered always empowered” will undermine what government is attempting to achieve

11. Observations and Challenges 11 ElementObservations and challenges Housing and living conditions of workers The situation is currently in four forms: Some companies have achieved the target of conversion of single sex hostels and implemented housing development programmes. Some companies are way behind schedules Some have converted hostels but still undermined human dignity – poor quality structures/accomodation Living out allowance (LOA) present a challenge and needs to be addressed by stakeholders.

12. Observation and Challenges 12 ElementObservations and challenges Procurement and enterprise development Some HDSA suppliers have core procurement contracts but there is a long way to go. Still a tendency to allocate non core procurement such as catering, entrance guarding, access control to BEE. Tendency to procure imported goods through local BEE does not support the local manufacturing interests of the country.

13. Observations and Challenges 13 Element Observation and challenges Employment Equity There is definitely an increase in number of Black Mine Managers Challenges Insufficient number of Blacks and women occupying strategic positions Few if any Black CEOs of globally operating mining companies HDSA are often given positions that have weak authority Tendency of Reversing the gains made in RSA by importing skills and not developing these locally is not helpful

14. Observations and Challenges 14 Element Observation and challenges Human Resources Development Training programmes are made through SLPs and reviewed every 5 years However, It is important to have clearer and sustainable programmes in place ABET should be linked to future HR developmental plan Bursaries should focus on local community development and mine skills.

15. Observations and Challenges 15 Element Observation and challenges Mine Community Development One of the biggest challenges in the industry – However, there are some good practices key challenges relate to: Fragmented contributions by mines to local socio-economic development - coordination needed Size and impact of some of the socio-economic projects are a problem Alignment of SLP with Integrated Development Plans needs to be improved and aligned to town planning –strong partnership is required

16. ETHRIDGE PRIMARY SCHOOL BIZANA –S&L Plan Project launched by His Excellency, President Zuma on 04 th October 2013

17. Online IT Project

18. Observations and Challenges 18 Element Observation and challenges Sustainable Development It relates to the implementation of approved EMPs – there are good practices but there are “apple” Implementation of tripartite action on health and safety is monitored every two years – the Health and Safety Summit later this year will be assessing progress Challenges: Need to ensure that the industry moves to concurrent rehabilitation should take place Bad “apples” should be removes. Need to address environmental legacies of the past - acid mine drainage is a typical example

19. Observations and Challenges 19 Element Observation and challenges Beneficiation The biggest challenge on beneficiation is iro downstream fabrications and maximizing value of South Africa’s minerals

20. Conclusions  The Mining Charter can still be used as a tool to transform the industry Mining Charter is imbued with a scorecard to self assess and report on progress. Assessment of level of compliance is ongoing Key to success of Mining Charter and future for transformation is in enhanced partnership amongst stakeholders

21. THANK YOU 21