Former gold-mining heavyweight Bernard Swanepoel, who as CEO of Harmony Gold had a deft turn of phrase, captured what is wrong with SA’s resources sector succinctly.
He noted the plush new buildings constructed in Sandton were nearly all for law, auditing and consultancy firms. No mining firm had built a new skyscraper office in Sandton.
The reason, he contended, was because the complexities of mining and environmental regulations, and the need for companies to comply with reams of laws meant junior mining was as good as dead in the water.
Who could pay for armies of lawyers and experts within the company and from external firms, as laws and regulations became increasingly demanding and convoluted?
These comments were made about five years ago and they’re more pertinent today than they were then.
There’s the third iteration of the Mining Charter that new mineral resources minister Gwede Mantashe oversaw and gazetted late in 2018. It has ballooned to more than 40 pages from the original eight when first introduced in 2004.
There are the proposed new regulations released suspiciously close to the end of the year and which will tighten the way the department enacts parts of the mineral and petroleum resources development act.
Lawyers welcomed the repeal of regulations governing environmental compliance because they now fall under another act, but there was puzzlement at other regulations, particularly those that dictated how companies must interact with the mineral resources minister around restructuring and retrenchments.
There is also duplication of the Labour Relations Act, which strictly controls how companies interact with unions and cutting jobs.
As companies deal with the consequences of abysmal decisions by the governing party in the way state-owned assets have been managed and their balance sheets destroyed, this increased meddling by the state in trying to manage the fallout as workforces are cut to manage costs is an unwelcome addition.
Investors drive firms to disclose plans for fighting climate change
In the wake of Sir David Attenborough’s recent pronouncement that climate change cannot be reversed, only slowed down, panic regarding the effects of the phenomenon are making their way — sometimes forcibly — onto the agenda of corporate SA.
Climate-change-related questions were the defining features of the AGMs of both Sasol and FirstRand last week.
Sasol’s engagement with nongovernmental organisations who were permitted to ask questions at the meeting as a result of obtaining a proxy shareholding was more direct given that the company is one of the country’s largest emitters of carbon dioxide.
FirstRand was a different proposition in that the country’s largest financial institution’s own carbon footprint is negligible in relation to the Sasols and Eskoms of the world. But what advocates were pushing for was greater transparency in relation to the carbon intensity of clients the bank finances through the operation of its vast, R1-trillion balance sheet.
While FirstRand does not in any way dispute climate science, it says it requires more time to compile figures and intends to provide a full road map on climate disclosure in 2020.
While it can be relatively easy for boards to fob off requests from environmentalists regarding disclosure, the tone of the conversation changes when large pension funds raise the issue as a large and influential shareholder of the business concerned.
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