Last week the Mining Indaba came and went just like it does every year. Some 7,000 people attended. On its margins, outside of the Cape Town International Convention Centre (CTICC), a different kind of mining indaba, a people's indaba, took place in close by Woodstock. This was the 5th Alternative Mining Indaba (AMI), which serves as a counterpoint to the industry event. AMI voices always struggle to find their way into the CTICC, but the chorus from the margins is growing stronger with each passing year.

1. Africa: Rethinking the Role of Mining in South Africa -
Nothing Changes Until Something Big Happens
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Photo: Harmony Gold Mining Company Limited
Miners at work at Harmony's Elandsrand mine.
opinion
By Saliem Fakir ·
Last week the Mining Indaba came and went just like it
does every year. Some 7,000 people attended. On its
margins, outside of the Cape Town International
Convention Centre (CTICC), a different kind of mining
indaba, a people's indaba, took place in close by Woodstock. This was the 5th Alternative Mining Indaba
(AMI), which serves as a counterpoint to the industry event. AMI voices always struggle to find their way
into the CTICC, but the chorus from the margins is growing stronger with each passing year.
Nevertheless, a sombre mood hangs over mining. The State of the Nation Address (SONA) added to this
dystopia, as President Jacob Zuma's speech and whatever little it had to say about mining got swept away
by the public distraction over the fracas that ensued at the opening of parliament.
The scenes in parliament brought to the fore the slow deterioration of our democracy. Inevitably, these
scenes also cast a dark pall over mining's future. Mining policy remains in limbo, as our government seeks
to redefine the role of mining capital and insert a new ownership and beneficiation model over mining.
At the Mining Indaba there was much agitation about business confidence. Incongruously, the get-rich-
quick mining and extractives lobbyists have turned themselves into latter day development activists
promising to be virtuous and help sort out the poverty oozing from every corner of Africa.
You wouldn't guess it from the current living conditions of mineworkers, but if the talk at the Mining Indaba
is anything to go by, mining companies also want to build social housing, clean up the environment and
sort out the education mess. This is the promise they are making in return for being allowed to dig holes
and meet compliance obligations set out by the Mining Charter and Mineral and Petroleum Resources
Development Act.
The fact that the mining lobby and its coterie of professional consultants now seek to compete with
activists, NGOs and community leaders in tackling the scourge of poverty, was the source of much
amusement for those attending the AMI.
The truth is that more than a hundred years of mining gold and other minerals from the rich seams under
South Africa's soil has led to a distorted development dividend. It's an appalling indictment of how unequal
mining's provident has been.
The tragedy of South Africa's gold mining history was indeed a sore point at the AMI, which examined the
impact of mining on workers and mining communities. At the AMI, we learned that mineworkers, who inhale
goldmine dust, carry the burden and cost of the silicosis epidemic. This occupational lung disease is a

2. sombre illustration of how mining companies externalise social, economic and health costs. These
externalities are not reflected on the balance sheets of mining companies.
Poor rural communities throughout Southern Africa carry the burden of these externalised costs, especially
the occupational lung disease, silicosis. Perhaps the most tragic part of it all is that these diseases could
have been prevented if proper health and safety standards were instituted, such as kitting out mineworkers
with proper clothing and taking other preventative measures.
All of this happens against the backdrop of the recently released Mbeki report on illicit financial flows from
Africa over the last few decades.
The report confirms what we know already. There is as much money leaving Africa through tax avoidance
and corruption, as the money entering the continent by way of overseas development assistance. The
inability to stem these outgoing illicit flows has retarded development in Africa, denying generations of
Africans economic opportunities.
Notwithstanding this problem and the associated question of governance, a new economic framework is
necessary for mining in South Africa. It is not about digging holes, but about building a more resilient and
sustainable economy that is less dependent on mining for exports and more about converting minerals
into products and services that further integrate mining into the rest of the economy. If this is not the
trajectory we embark on in the next decade, mining will become an island economy.
Africa's mining wealth and that of South Africa is vast, but what we must pay attention to is the fact that
mineral wealth is a depleting resource. If our mineral resources are used wisely, a lot could be done not
only to grow our economies, but also to direct wealth generation away from depleting resources towards
the development of other types of non-depleting economic assets. These non-depleting assets should
ideally be in the area of human capital, infrastructure development, manufacturing and accumulating
savings so as to reduce the need for borrowing.
The terrain on governance over mining is constantly shifting in South Africa and is not quite pleasing to
international capital that wishes for stability and an exclusive mining economy that harks back to bygone
days. Nevertheless, while that era is over, exclusive relations are taking new forms.
Within the ruling elite there is much debate about how to change the game. New legislation is meant to
modulate the tone and nature of the game as well as the relationship between private capital, the state and
empowerment beneficiaries.
However, the new dispensation that will follow revisions to current mining legislation evidently is still
empowerment-ownership focused with a strong emphasis on beneficiation through discounted domestic
pricing for strategic minerals that are relevant for specific types of industrial uses and other areas of the
economy.
The current empowerment model in the mining sector emphasises an orientation that is corrupted by
short-termism. The problem with this empowerment model is that it always rewards only a few players,
even if arrangements with mining capital are broad-based.
This model remains the prevailing paradigm of mineral wealth control and distribution. In many respects, it
gets in the way of creating a fairer dispensation and allowing a more holistic economic model to prevail.
There are different empowerment models that can facilitate an alternative result. But these receive little
attention or coverage in mining debates.
Good economic planning for minerals would be better enabled through a transition model where one

3. doesn't see minerals ownership and its immediate exploitation as an end in itself, but a stepping-stone
towards creating a more resilient and diversified economy.
An alternative model could increase the state's share in mining companies and in this way also enhance
capital accumulation for the state. More capital accumulation means the state can do more whilst
borrowing less in the long-term. This is the direct approach.
An indirect approach is to mine and convert these goods into other types of products and services that
have higher value - the beneficiation model. This enables higher levels of income to be earned in the
national economy, which in turn means that mining wealth is more likely to be socialised than privatised.
All of these possibilities are feasible if there is a more inclusive political economy and more stable
governance over the mining sector and extractive industries. The current state of dysfunction is not
conducive even for private capital. It certainly isn't predictable enough for investment decisions and
certainty over the flow of proceeds from mining.
But there are stumbling blocks, which must be overcome if change is to be introduced.
The prevalence of weak governance over mining may be a deliberate attempt at dysfunction, as it allows
informal mechanisms and backdoor dealing for securing mining licenses.
Weak governance may also reflect the inability of the state to resolve internal conflicts where special
interests closely aligned to the ruling party seek to restructure ownership and the right of access to the
mineral wealth of the country.
The policy machinery of the state is weak, cumbersome and bogged down in bureaucratic red tape. It
simply reflects weak capacity. Those who want a better economic dispensation over mining must
contemplate whether the current system should be fixed or be replaced by an altogether new paradigm
and mining regime.
Most agree the current system will not produce a fair dispensation and a new paradigm is necessary. Only
time will tell as to which will evolve - reform or radical change.
Fakir is an independent writer based in Cape Town.