With the implementation of the revised – and heavily contested – Mining Charter Three postponed to December, Finance Minister Malusi Gigaba on Wednesday said it was critical that the current impasse in the mining sector be resolved.
Earlier this year, the Department of Mineral Resources(DMR) published the revised charter to much criticism.
In response, the Chamber of Mines filed a court bid halting the implementation of the charter. Mineral Resources Minister Mosebenzi Zwane has agreed not to implement the charter until judgment on the matter is handed down by a court.
“Government is eager to get all parties back to the negotiating table to find a solution,” Gigaba said during his first Medium-Term Budget Policy Statement, noting that Cabinet approved National Treasury’s move to intervene.
National Treasury, the Department of Trade and Industry and the DMR planned to sit down with the mining sector to find a solution to the Mining Charter woes.
Elevated operating costs and uncertainty related to the Mining Charter and the Mineral and Petroleum ResourcesDevelopment Act Amendment Bill continue to constrain growth, the National Treasury’s mid-term budget documents noted.
Gigaba reiterated the urgency to “find common ground” between government and business on a Mining Charter that attracted investment, advanced transformation and benefited workers and communities.
The Medium-Term Expenditure Framework showed an expansion of 4.3% in mining value-add during the first half of this year, compared with the first half of last year, indicating a recovery, supported by higher commodity prices and growth in iron-ore, manganese and copper, after a contraction in 2016.
Mineral sales increased by 6.8% in the first half of this year, compared with the same period last year, driven largely by coal and iron-ore. Gold sales fell by 16.2% over the same period.
However, the declining fixed investment in mining was undermining any sustainable growth, Gigaba commented.