Chairperson, the Marikana tragedy in August last year undisputedly blemished South Africa's mining industry. The events at Marikana changed the lives of more than 34 families who lost a child, a father, a brother or a husband. Marikana also changed the lives of everyone involved in the mining industry. It also illustrated the thoroughly weak state and the political-economic challenge of managing the most unequal country 19 years after democracy.
A well-known supporter of the ANC remarked, with reference to the Marikana tragedy, and I quote: "It looked like the ANC turned its guns on its own people." It is all about perception, hon Minister. These perceptions of the Marikana tragedy have contributed to threats by the Association of Mineworkers and Construction Union, Amcu, not ANC-affiliated, to bring South Africa's economy to a standstill. This, in turn, contributed to the rand sliding to a four-year low against the dollar, which could trigger another downgrade of South Africa's ratings.
The government's feeble response to the Marikana disaster was to send a ministerial task team and to appoint the Farlam Commission of Inquiry. The initial ministerial task team, which produced few results, was followed by a second and similar task team in response to renewed unrest at Marikana.
Not being welcome at Marikana, none of the problems leading to the Marikana disaster was addressed. An increased number of illegal strikes - and I emphasise illegal strikes - resulted, which cost the country at least R15 billion in revenue. An acting Minister in the President's Office recently stated that, and I quote: "We are confident we will be able to curb this problem and nip it in the bud." A rather contemptuous remark, considering the historical context.
A recent newspaper headline stated the obvious, and I quote: "Ministers misread mining crisis". The fact that the ANC government is allied to Cosatu, to which the National Union of Mineworkers, NUM, is affiliated, is leading to allegations of clientelism and patronage. Government is perceived as not being able to act impartially between NUM and Amcu.
The secretary-general of the ANC has already indicated to NUM workers that:
You are not being victims because of your membership of Num, but because you are a loyal member of the revolution...
... thereby creating more divisions. Last Friday, the hon Minister indicated that NUM was not to blame for the Marikana tragedy. Workers are losing faith in ANC-affiliated unions. [Interjections.]
Failure by local government to upgrade informal settlements, provide water, electricity, housing, sanitation and refuse removal increased problems regarding the social wage of workers at Marikana. It is particularly this failure which has created immeasurable hardship for mine communities. The trade-offs of paying living-out allowances, as compared to accommodation provided by government and mining companies, should be considered.
A co-ordinated structure between stakeholders needs to determine short, medium and long-term goals to prevent a second Marikana tragedy from taking place. The Mining Industry Growth Development and Employment Task Team, Migdett, which represents mining stakeholders, needs to step up to the responsibility.
A model community serving as a developmental model for the industry, as proposed by the Southern African Institute of Mining and Metallurgy, should include an integrated income-generating community of mineworker families whilst taking note of the Benchmarks Foundation report, which summaries most of the issues. The Minister of Finance, Pravin Gordhan, was correct when he stated recently that something needed to be done urgently in the mining industry as the country would lose jobs and investor confidence, resulting in companies closing. Unfortunately, this has already started to happen. Mining output contracted by 3,5% in March, according to Statistics SA. South Africa's foreign direct investment plunged from R45,4 billion in 2011 to R1,7 billion last year, as compared to Zimbabwe's foreign direct investment of R3,5 billion last year. What has happened, hon Minister?
Whilst mining contributes approximately 19% to GDP directly and indirectly and provides 1,3 million people with mining-related jobs, the proposed amendments to the MPRDA will lead to less regulatory certainty, less compliance with international best practice standards and hence less investment, thereby creating more social tension.
What South Africa needs to deal with to prevent another Marikana tragedy are threats of mine closures following the Marikana tragedy; veiled threats of nationalisation by the ANC government; more state involvement, control and interference; declaring certain minerals strategic minerals, with the Minister setting prices and determining the quantity to be exported; declaring an unspecified free carried interest in exploration activities to the benefit of the state and creating a perception of controlling certain markets.
Black economic empowerment has failed workers and mining companies. It has not been broad-based or economically viable in many instances. Mine employees should benefit from a responsible transformation of the mining industry such as employee stock ownership plans, formulated by Kumba. The criticism expressed by Africa's richest man towards the manner in which South Africa implements BEE is well known.
Following the Marikana tragedy, South Africa needs a social compact that encourages transparency and accountability, better governance and a shared understanding of the role and value of business in society. Marikana has led to South Africans re-examining the actions of the SA Police Service and those of an ill-equipped, unprepared and seemingly disinterested government in relation to the plight of the mining industry.
We should address the problem of being the most unequal society, manifesting itself acutely in the mining industry, by, inter alia, the following considerations: responsible downstream and side-stream beneficiation in an investment-friendly climate rather than imposing more taxes; a new labour dispensation model where mining is reintroduced as a continuous operation leading to more jobs and a higher frequency of leave; new, clean energy initiatives providing incentives to mining companies to build self-sustaining energy systems and the development of infrastructure inclusive of private sector participation; qualitative training for employees, including women engineering graduates; developing platinum-based fuel technologies, incentivising independent power-producer agreements based on, for instance, coal gasification and methane gas technologies; implementing well-considered special economic zones for certain commodities and poverty-stricken areas; concluding fair and representative union recognition agreements; developing an independent regulator responsible for applications for mineral rights and involvement by the state in the mining industry to provide an investor-friendly climate.
In conclusion, the future of South Africa's mining is on the brink of another crisis without definitive steps to resolve the underlying issues which contributed to the Marikana tragedy. I thank you. [Applause.]