Indaba follow-up — DMRE ‘dysfunction’ hamstringing vital SA mining industry despite labour improvements

31 Mar 2023

Daily Maverick Editor at Large Richard Poplak spoke to Business Maverick journalist Ed Stoddard about the challenges and reshaping of the mining industry during a webinar held after the recent Investing in Africa Mining Indaba in Cape Town.

The recent Investment in Africa Mining Indaba in Cape Town highlighted the industry’s drive to clean up its act and address the legacies of its often exploitative past.

“We simply cannot do without the mining industry,” Business Maverick Journalist Ed Stoddard noted during a Daily Maverick Webinar hosted by Richard Poplak.

Stoddard said that mining executives in South Africa were well aware of the horrific history of exploitation in the mining industry but that huge improvements have been made on the health and safety front.

Last year 49 miners were killed in South Africa — 49 too many and almost one per week on average. But it was a record annual low in over a century of industrial-scale mining.

Other positive trends include remuneration. Since the violent Marikana strike in 2012 for a R12, 500 monthly wage, miners’ wages have more than doubled. Since 2001, their wages have risen more than fivefold.

Read in Daily Maverick: Marikana: 10 years later

“Other reasons for the improvements can be attributed to unions and a recognition that miners cannot be paid appalling wages for their kind of work,” Stoddard said.

This is off a low base as for decades mineworker wages in South Africa stagnated and declined when the industry was exploiting mostly migrant labour.

Economic backbone

The mining sector also remains critical to the economy, accounting for close to 9% of gross domestic product (GDP). Surging prices and profits over the past couple of years have seen the industry pay significantly higher taxes and royalties at a time when other sectors in the economy have been in distress.

“The mining industry actually threw a lifeline to South Africa’s treasury,” said Stoddard.

Turning to the regulator — the Department of Mineral Resources and Energy (DMRE) — Stoddard said it deserved credit for its efforts to make mining safer and healthier.

“But you know in terms of functionality, transparency and things like that I would give the DMRE a very low rating,” Stoddard said.

Stoddard said the failures in functionality and transparency were emblematic of a failing state.

“Does it seem like there is a whole different set of priorities at work in the DMRE that do not relate to growing, stabilising and sustaining the mining industry?” Poplak asked Stoddard.

“The DMRE's dysfunction has made South Africa almost a no-go zone for exploration,” Stoddard responded.

He said the DMRE has for years promised to fix its “utterly useless system for processing mining rights applications”.

“Some years ago, the backlog in the system was over 5,000. We know the backlog has been reduced by something like 40 to 50% but is still over 2,000,” said Stoddard.

“What the DMRE seems to be doing is that it doesn’t want the light of transparency to be shone on incompetence and alleged corruption,” Stoddard said.

Regarding the burning issue of illegal mining, Stoddard said, “The general view was that illegal or artisanal mining was out of control and that the South African Police Service (SAPS) were doing their job. That speaks to a failed state.” DM

Update: Since the webinar, the DMRE has finally issued a tender for a mining cadastre system which hopefully will bring much-needed transparency to the sector and the regulator.

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