Tuesday, October 28, 2008

Playing favourites isn't good for anyone

A state owned mining firm is in the process of being created in South Africa and the government wants to give it certain exemptions from the mining act, including the application for mining permits and prospecting rights. The reasoning is that mining rights are granted to public companies after a rigorous and often lengthy application process which hampers project development. The state owned firm would simply notify the government of it's intentions instead of applying like everyone else.

I see a lot of things very wrong with this. The Chief Executive of the Chamber of Mines was quoted as saying:
"Our view is that the state should be subject to the same requirements as the private sector in terms of prospecting for or operating a mine. This type of notice seems to negate the principle of equality before the law. It sets an unfortunate precedent with regard to the extensive range of other obligations that mining companies need to comply with."

This speaks of a pretty skewed system which has caused mining and mining exploration to suffer recently in a country where it has dominated the economy. Instead of giving exemptions to their little pet project, how about reforming the application and permitting sections of the mining act? Or simply increasing the amount of staff to review these applications? I know those are dumbed down simplified answers to a complex problem but giving exceptions to a state owned firm won't do anything but create dissent and send a message to the mining industry, and it's investors, that they come second and that the state owned firm is above national law. Although it mentions environmental research, labour regulations and a financial check to verify that the project is profitable would still be done, one can only wonder if those could get overlooked as it is fast tracked.

The government of South Africa decided that change was needed for the industry, this wasn't the right choice.

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