Citizens expect action in the mining industry
THE discussions at this year’s Mining Indaba look set to be far gloomier than the preoccupations of a year ago, when the main focus was on how major mining houses proposed to eke profit and growth out of uncertain commodity prices in a sluggish global economy.
Mining bosses worried alternately that demand for commodities would tank, that mines would not be brought on stream in time and under budget, or used the stage to try to sell their alternately aggressive or conservative growth plans to investors.
Business as usual, you might say.
This year, though, South African citizens will be an invisible but compelling presence at the largely exclusive gathering. Those same bosses will know that Marikana, news of mine closures, job losses and the knock-on effects on the national economy and personal savings have soured the national mood and brought their industry into sharp focus. And this is at a time when new research from FTI Consulting shows high levels of concern among South Africans about foreign ownership of this most international of local industries on the one hand, and a willingness to act when they see something they do not like, on the other.
According to the findings, while 71% of South Africans view foreign direct investment favourably, 41% are concerned about foreign investment in the metals and mining industry. Most South Africans view Chinese inward investment favourably, according to the study, with 71% saying it is beneficial. But a large number are wary of perceived Chinese neglect for worker welfare, their crowding out of local employment and the potential loss of control of strategically important minerals. Respondents expressed most concerns over investments by overseas state-owned companies (75%) and by sovereign wealth funds (74%).
The more salient point is that most, by a wide margin, said they would act in the event of a controversial overseas investment (87%) by talking to people they know across the country (71%), joining a protest group (21%), writing about it online (21%) and contacting the media (14%). Only 10% would contact a political representative.
The worst thing the industry could do is to ignore how last year has unsettled the nation, or try to put lipstick on the beast. Nor will finger-pointing suffice. If there ever was a time to look a situation in the eye and speak directly and truthfully, this year’s event is it.
When the sector gathers this week, leaders must recognise that millions of South Africans have witnessed some of last year’s scenes that were at once visceral and unsettling and, more troubling, uncomfortably similar to scenes from apartheid.
It will not help that South Africans are now extremely aware of past and present conditions in the mining industry and their lack of improvement, and many stridently want explanations for the continued poverty surrounding many mines. The nation’s deep social divisions and predisposition for violence that played out in the largely unchanged lives of migrant miners have similarly been made real.
For a nation that prided itself on being a miracle of reconciliation and a model for peaceful transition to the world, it was embarrassing to sit through a week of CNN journalism uncovering its shame and playing that to a global audience.
It would have been bad enough had Marikana been a one-off occurrence, but mine closures and job losses now threaten the national economy and will test the social net. That bears repeating: what happened in the mining industry has the potential to become a threat to social stability in an already polarised country.
Then there are those who look at their pension fund, unit trusts and other investments, who will also look bleakly back at the mining sector in 2012 when it dawns on them that their individual wealth is closely tied up with what has happened in the industry and what its leaders think and say about its future.
So when mining executives gather under these foreboding clouds, they should remember what South Africans have seen, and many are outraged. They are no longer at arm’s length from the industry. To respond with closed discussions in sealed-off rooms will simply not be acceptable to them. Nor will high sounding statements of intent be enough. This will be a time to engage, and then to do.
Who then, at this indaba, will take up this task, recognising that the industry’s principal stakeholders are all South Africans, and they are asking questions and expecting answers and action?
• Peach is senior vice-president at FTI Consulting.