Bridgette Radebe is president of the South African Mining Development Association
(SAMDA), a director of the New Africa Mining Fund (NAMF) as well as executive chairperson
of Mmakau Mining. With extensive experience in contract mining and mergers and acquisitions
in the mining sector, Ms Radebe was also South Africa's first black mining entrepreneur
in the 1980s, in contract mining.
Could you tell us about SAMDA's impact on the mining industry so far,
specifically with regards to development and transformation?
The South African Mining Development Association was started in 2000 as the Junior
Mining Initiative to represent the sector, by a group of leading mining investors
from established South African junior producers and emerging companies. SAMDA was
established in response to the need for a collective lobbying organisation that
would articulate the interests of the junior mining companies, during the creation
of the mining legislation in the transformation period. Lack of finance has always
been a challenge for junior companies, especially for exploration funding. The Bakubung
initiative, consisting of leading mining executives, gave rise to the creation of
the New Africa Mining Fund (NAMF) - a venture capital junior mining fund for exploration.
What are the general requirements and profiles of SAMDA's members?
The Minerals and Energy Policy Centre research established that a junior mining
company was one with an asset base of between R30million and R1billion, and a turnover
of between R18million and R1billion. As most SAMDA members eventually graduate from
junior companies into majors, membership has grown to include companies with an
asset base and turnover beyond R1billion such as Impala, Harmony and Xstrata to
name a few.
Could you expand on SAMDA's contribution to skills upliftment in mining?
We have been lobbying the South African Treasury Department to reinvest royalties
received from the mining sector in science councils such as Mintek, GeoScience and
Mining Tech, in order to aid the industry in developing skills. SAMDA have also
lobbied the Department of Education to establish mining faculties in the historically
disadvantaged South African universities, which are located in the former homelands
where the bulk of mining investments and development is taking place. The localisation
of skills and resources in these areas is important in order to abolish labour migration
and 'ghost towns'. SAMDA has been a catalyst for the creation of a programme
linking the University of the North to Wits University, in which the former acts
as an incubator university to feed the first year mining faculty at Wits. Beneficiation
is also a prime focus for SAMDA as this increases the value chain of locally produced
raw materials, so creating jobs and skills in addition to the export focus.
Opening up the mining industry to development must have caused some teething
problems for newcomers;
can you give us an idea of what these are and how you are addressing them?
The processes of conversion and application for mining licences are a new experience
for our members - and this has certainly created teething problems, which SAMDA
is addressing. SAMDA, together with the Chamber of Mines, the Foreign Investors
Forum, rural communities and labour recently held a workshop with the Department
of Minerals and Energy (DME), to address these challenges. The DME's award winning
data processing computer program and the GeoScience computer capturing of exploration
data will be of great benefit to mining producers, as these efforts by government
will assist in the conversion and application processes. Since the workshop with
the DME, we have committed to employing a Social Affairs and Conversions Officer
who will assist members with all applications, hence enabling members to effectively
address concerns and delays in the application process. The R564 million New Africa
Mining Fund (NAMF) is limited in addressing the exploration funding challenges of
the mining sector. With the formation of the Mining Charter, industry committed
to assisting historically disadvantaged South African (HDSA) investors to the value
of R100 billion over 5 years, which was equivalent to 15% of the 26% BEE Charter
requirements. Even this assistance however, does not address the overall funding
challenges of Black Economic Empowerment (BEE). SAMDA has been a pioneer in the
lobbying for the implementation of flow-through shares, as this financial engineering
model offers a tax incentive to investors in mining shares. This Canadian model
has been successful in providing exploration funding for junior companies.
What are the purposes of the Global Mining Conference for this year? And
what are the plans for the future?
This, being our inaugural conference, is focused on global mining transformation.
This conference seeks to create a 'Millennium Capitalist with a Conscience'.
In line with President Mbeki and the G8's initiative towards debt relief for
Africa, mining companies have to commit to creating sustainable mining sectors in
the countries of investment. The world is experiencing a global transformation.
The Cancun Agreement gave rise to lobbying for abolition of trade imbalances between
rich and poor countries. The Kimberley initiative has been a successful attempt
to abolish trade in conflict diamonds. In line with this global transformation trend,
there is a need for the millennium mining investor to become an agent of transformation
and a pioneer of change. Some of the critical issues of transformation are mining
in conflict areas, good corporate citizenship, environmental awareness and rehabilitation,
robust venture capital for under developed countries, skills upliftment and competitive
labour costs, integrated development programs and rural renewal projects, the abolishment
of ghost towns etc.
You have coined the phrase "millennium capitalism". Would you please explain
this term with regards to the 2005 Global Mining Conference on Transformation.
Investors wield enormous power. Economic sanctions imposed on South Africa contributed
to the abolishment of Apartheid. We need to create the type of economic activist
that will seek to develop an investment culture that, while primarily focussing
on return for investment, profit for shareholders, tax contributions etc., will
also encourage quantitative and qualitative changes towards global empowerment for
under developed countries. We need to graduate from the social responsibility syndrome
as the prime contributor towards the development of sustainable economies. The mining
legislation in South Africa is successfully giving rise to the creation of various
community capitalists similar to the Royal Bafokeng Nation - communities that have
equity in mining investments through a Tribal Trust, with the proceeds used for
rural renewal projects. In South Africa we have sought-after commodities, competitive
industries and global investor potential in a country which has inherited skills
shortages, gross poverty and sustainability issues. But by mechanising our approach
and adopting a mining model that will allow investors to combine skills development
with labour intensive mining methods, we can combat poverty.
What does this term mean for the mining industry?
It means that the community equity, through a trust, will allow dividends accrued
by the trust to be invested in roads, clinics, bursaries and rural development projects,
giving communities the power to create their own destiny. This will also contribute
towards the alleviation of government dependency. This is true empowerment - a model
that can be adapted not only for the rest of Africa, but for any poverty-stricken
resource-rich country. The millennium capitalist sees the avenues for economic development
in grassroots- level empowerment and upliftment, hence addressing the stagnation
of development initiatives that sometimes emerge because of logistics and bureaucratic
challenges in under developed countries. The dependency syndrome is also being addressed.
Is this model applicable only to South African investors, or would you say
it has international appeal?
We have generally been exposed to a situation where multi-national corporations
would accrue investment benefits from Africa and then exit - leaving underdeveloped
countries behind. The culture of the millennium capitalist will be that of a compassionate
capitalist. It recognises that it is critical that the discipline of global mining
transformation policies - especially in underdeveloped countries - is adhered to.
The Charter compliancy policies of South Africa that seek to uplift indigenous people
in equity participation, human resource development, beneficiation and environmental
awareness programmes etc., can also be applicable in any underdeveloped country.
This means that it is clearly an internationally applicable model, even if you are
a first world multi-national that operates without the strife faced by third world
countries - and it will stimulate economic regeneration in the countries whose resources
you have been using for your own benefit.
May we have a few of your own comments with reference to the South African
We have managed as an industry, in partnership with the government, to create the
legislation required to transform mining in South Africa. The test is in the implementation
and we should not undermine our own efforts by tolerating cosmetic change. Change
has to be genuine. By this I mean that 'fronting' in BEE procurement and
HDSA equity is an affront. True transformation will only take place if we nurture
the development of active partners who will successfully absorb the skills transferred
and become engines of growth. Compared to many emerging economies, the South African
legislation is unique in its intention of addressing the historical imbalances.
Our greatest challenge is to graduate to other mining economies levels of technical
skills. The ownership potential in our legislation is successfully manifesting,
and we are presently concentrating on conquering the skills upliftment, job creation,
SMME development and rural development issues. We continue to forge links between
South Africa and mining investors on the African continent. Our business commitment
is to pursue a code of conduct in Africa that will demonstrate global mining transformation
policies in these countries. The next ten years in the history of the South African
mining economy will give rise to defining moments in the long walk to economic freedom.