GOLD SMELTING: Job creation could best be achieved by industrial development. It was believed that manufacturing could employ a much higher proportion of workers than mining because of its greater need for skilled labour.  Picture: PIETER DE RAS
Ngoako Ramatlhodi's removal has shocked the mining industry. Picture: PIETER DE RAS

NEW Mineral Resources Minister Mosebenzi Zwane — whose appointment has been met with dismay by the industry — has to also contend with fallout within the governing party.

Mr Zwane is viewed within the industry and the African National Congress (ANC) as weighed down with the "baggage" of being a Gupta family sanctioned appointment.

He replaced Ngoako Ramatlhodi in a Cabinet reshuffle late on Tuesday evening.

Mr Ramatlhodi’s removal has shocked the industry, which is battling low demand and plunging commodities prices and is under pressure to avoid cutting tens of thousands of jobs.

The Department of Mineral Resources is also mired in three major court cases: on the interpretation of the ownership clause in the Mining Charter; an attempt to have the mining charters set aside and another on overlapping rights on a manganese project.

A number of senior mining figures, speaking on condition of anonymity, said Mr Ramatlhodi’s departure could not have come at a worse time and criticised the fact that Mr Zwane, who appears to have little or no experience of the sector, was linked to the Gupta family.

"It was one thing Ramatlhodi being pushed to another ministry by the president, but it’s another having someone with baggage or a perception of baggage at this critical time for the industry," said a senior executive.

"We need someone who will make decisions for the good of the industry and the country, but critically, we needed someone who is squeaky clean. That would have been far more desirable," the executive said.

John Meyer, an analyst at SP Angel in London, said SA had a long list of problems in the mining industry including electricity prices and supply, and uncertain labour relations.

"Any negative history relating to the minister of mines will serve to put off investors into SA (in the) longer term," he said.

ANC leaders who wished to remain anonymous were still furious about the appointment on Thursday. A senior alliance leader said the link between Mr Zwane and the Gupta family was clear, which was worrying in light of the Guptas’ interests in the mining sector. The Guptas have a close relationship with President Jacob Zuma.

Mr Zwane was central to a controversial dairy project driven by associates of the Gupta family, reported the Mail & Guardian newspaper.

It also reported that a letter written on Mr Zwane’s behalf provided an "official alibi" to turn a visit for a wedding by members of the Gupta family from India, into an official one.

That preceded the controversial landing of an aircraft full of Gupta guests at the Waterkloof Airforce Base.

Earlier this week, the ANC said it would investigate factionalism in the party. Three premiers dubbed the premier league — from the Free State, North West and Mpumalanga — appear to wield a disproportionate amount of influence in the ANC. Mr Zwane’s appointment is seen as a sop to them.

Chamber of Mines CEO Roger Baxter said it found Mr Ramatlhodi accessible and open to dialogue even if those discussions were sometimes heated. Mr Baxter said the chamber would engage openly and constructively with Mr Zwane and try to move the industry forward. "We don’t choose the minister. We will work with whoever is there," Mr Baxter said.

But another executive said his openness with the industry might have contributed to Mr Ramatlhodi’s undoing as the ANC might have perceived him as too accommodating of mining companies.

"We had started building a relationship with him. The relationship was not great, but it had started to make headway. The industry put a lot of time and effort into it over the past 18 months," he said.

There were mixed reactions from unions.

The United Association of SA said this week’s reshuffle could be one of the "worst decisions" yet taken by Mr Zuma.

National Union of Mineworkers president Piet Matosa said the union did not want to judge before interacting with Mr Zwane, but urged him to continue Mr Ramatlhodi’s work on helping the industry save jobs.

The Association of Mineworkers and Construction Union reportedly criticised the appointment.

Mr Zwane was formally trained as a teacher and has served as an MEC for agriculture and tourism and economic development.

He was quietly made an MP in Parliament earlier this month, most likely in preparation for his move to the Cabinet.

Free State ANC spokesman Thabo Meeko said that as economic development MEC, Mr Zwane had worked extensively with the mining and agriculture sectors.