Black economic empowerment policy and state–business relations in South Africa: the case of mining

ABSTRACT

The article analyses contestation of black economic empowerment ownership transfer policies in South Africa’s mining industry. Using case study material from platinum, the article examines the transition between the first Mining Charter of 2004 and the third Mining Charter of 2018. It argues that the inherent fragilities of this financialised redistribution mechanism have generated poor redistributive outcomes and achieved limited progress in the formation of a black capitalist class aligning political and economic power. This has contributed to increased factional and ideological contestation over the pace and method of economic transformation, and a deterioration in relations between the state and big business in mining.

RÉSUMÉ

Cet article analyse la contestation des politiques de transfert de propriété dans l’industrie minière sud-africaine réalisées en vue de l’autonomisation économique des populations noires. S’appuyant sur une étude de cas du platine, l’article examine la transition entre la première Charte de l'industrie minière de 2004 et la troisième Charte de l'industrie minière de 2018. Il soutient que les fragilités inhérentes à ce mécanisme de redistribution financiarisé ont généré de mauvais résultats redistributifs, et des progrès limités dans la formation d'une classe capitaliste noire alignant pouvoir politique et économique. Cela a contribué à un renforcement des objections idéologiques et des contestations de factions par rapport au rythme et à la méthode de transformation économique, et à une détérioration des relations entre l'État et les grandes entreprises dans le secteur minier.

KEYWORDS:

• Mining
• South Africa
• inequality

MOTS-CLÉS:

• Exploitation minière
• Afrique du Sud
• inégalité

Acknowledgements

The author wishes to thank colleagues at the Society, Work and Politics Institute, University of the Witwatersrand, and in particular Gavin Capps, for helpful comments and suggestions on earlier drafts of this paper.

Disclosure statement

No potential conflict of interest was reported by the author.

Note on contributor

Andrew Bowman is lecturer in Africa and International Development at the University of Edinburgh's Centre of African Studies. He is also research associate at the Society, Work and Politics Institute at Wits University, South Africa. His research interest is the political economy of development, with a focus on natural-resource-based industries and industrial policy.

Notes

1 In the original 2004 Mining Charter, HDSA referred to ‘any person, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act no. 200 of 1993) came into operation’ (DME 2004, 9).

2 Data from Comtrade and SARB Quarterly Bulletin.

3 Author’s calculations from company annual reports.

4 In alphabetical order: ARM, Atlatsa, Eastern Platinum, Glencore, Northam, RBPlats, Sylvania, Sibanye and Tharisa. Development projects are Platinum Group Metals, Ivanplats, Sedibelo and Wesizwe.

5 Author’s calculations from DMR data and company reports.

6 The ETR is tax liability as a percentage of net pre-tax accounting profit. The difference between it and statutory rates displays the impact of deductions (Davis Tax Committee 2015, 141).

7 The royalty has a minimum 0.5% payment on gross sales, while depending on the level of profitability companies may pay up to a ceiling of 5% for refined minerals and 7% for unrefined minerals.

8 Author’s calculations from StatsSA data.