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Mining industry must do more for communities – BMF

24th October 2016

By: Anine Kilian

Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – With mining communities not having reaped the expected benefits that mining companies were meant to provide, the industry has become a difficult subject to discuss in South Africa, despite current levels of interest in the subject being unparalleled since South Africa’s transition to constitutional democracy, says Benchmarks Foundation (BMF) chairperson Reverend Jo Seoka.

Speaking at a BMF conference themed ‘Mining: Development or Disaster?’ on Monday, he noted that mining was seen as the “holy cow” of the economy, and one that was usually portrayed as a source of investment for development and jobs, and a contributor to the gross domestic product (GDP).

However, according to Seoka, mining communities are subjected to suffering by “greedy politicians, businesspeople and self-serving local politicians”.

“It seems as if the mining industry cannot be challenged, despite the fact that hundreds of thousands of poor people live in abject poverty owing to loss of arable land, aggravating health conditions and cultural and social upheavals, all of which manifests itself in unemployment and has pushed poor communities to the margins of society,” he held, adding that the challenge presented by mining would, however, not be insurmountable if the industry focused on contributing to a sustainable society.

Seoka noted that a sustainable society included giving people access to better livelihoods, freedom of choice in economic activities and a healthy environment that contributed to the quality of life.

“It must benefit society and contribute to evenly developed economies, which, in turn, spreads benefits to a wider society. Sadly, this is not the reality of mining,” he said.

He stated that, globally, mining was suffering a crisis of legitimacy as a result of its negative impact on climate change through air pollution, water scarcity and contamination.

He said that it also impacted significantly on communities and rural lifestyles, which gave rise to serious health concerns.

“Africa has an extractive economic model [whereas it] once had a proud record of manufacturing stemming from mining. The continent now imports 80% of mining machinery and exports 80% of its gold and platinum refining, while having little local manufacturing capacity,” he added, by way of context.

SADC AND MINING
Seoka said that Africa had a history of conflict over minerals and that the Southern African Development Community (SADC) was one of the most mining-dependent regions in the world.

Zambia is dependent on copper while Botswana is dependent on diamond exports, and both these countries are considered to be dependent on mineral resources, he said.

In addition, the Democratic Republic of Congo is largely dependent on copper, cobalt and coltan exports, while Angola is largely dependent on the revenues it derives from the export of oil, and Zimbabwe depends on platinum and diamonds.

“Given the reality of the mineral wealth of these countries, they should have a high standard of living. However, the region with the highest mineral wealth on the planet is also the region where people live in abject poverty, with the highest rates of HIV/Aids infections and tuberculosis, as well as the highest levels of silicosis and malaria,” he said.

Seoka added that, despite its mineral resources, the SADC region had the largest wealth and poverty gap globally.

“So far, after 22 years of democracy, things are getting worse as corporate interests supersede those of society,” he said, regarding foundering hopes of the divide between the haves and the have-nots in South Africa narrowing.

He further highlighted data from the International Monetary Fund (IMF), which recently found that South Africa’s nonfinancial returns on investment were high, ranking the country third among 19 developing countries, with an estimated 14% return on investment against a global average of 8%.

“Illicit financial flows, estimated at 20% of GDP, are huge. Global financial integrity puts the mining sector in the lead when it comes to trade-invoicing, finding South Africa with the highest illicit capital export,” said Seoka.

He pointed out that, in 2012, illicit capital outflows amounted to R300-billion, or close to 10% of GDP.

Moreover, South Africa lost R237-billion in 2011, which could have built 18-million low-cost houses, created 6.6-million youth jobs, or funded 1.1-million student scholarships, stated Seoka.

He added that South Africa was in a crisis and that mining, which was under immense pressure across Africa, was undermining democracy and not helping to solve the challenges facing the continent’s developmental needs.

“The BMF believes that, as a country, we need political will to enforce binding regulations with strong implementation. We also advocate a rethink around mining models and fundamental change of the paradigm to one of people-centred development and a participatory approach,” he said.

Seoka stressed the BMF’s belief that this would only happen when mining communities take ownership and once mining companies distribute benefits evenly and have a long-term mining plan for people and development.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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