Columns 6.9.2016 10:48 am

The only thing Zwane brought was the Guptas

Picture: Courtesy Moneyweb

Picture: Courtesy Moneyweb

His complete lack of understanding of the commodity cycle and the challenges mining companies face was revealed in the revised Mining Charter.

Not since Marthinus van Schalkwyk ascended the throne to lead the “New” National Party in 1997 has a major politician looked so out of his depth as the honourable Minister of the Department of Mineral Resources, Mosebenzi Zwane, did on Friday afternoon.

For the uninitiated, Van Schalkwyk assumed the leadership of the party during an age of titans in South Africa’s political history. Mandela and De Klerk (his predecessor) had managed to avoid a civil war, despite some notable performances from the Left and Right, keeping the country largely intact for the first democratic elections. And, following years of negotiations starting as far back as Codesa, had delivered the new Constitution that President Mandela had signed into effect just months previously. These were big leaders, doing big work.

Enter kortbroek. Despite the National Party winning 20% of the vote in the 1994 general election and becoming the official opposition, Van Schalkwyk led the party on a number of disastrous forays into alliances with other parties that ultimately eroded its position and resulted in the party being dissolved and absorbed into the ANC in 2005.

So for his efforts, Van Schalkwyk’s detractors nicknamed him “kortbroek” – a derogatory reference to his complete lack of gravitas. He was in effect a lightweight in a league of heavyweights.

Mosebenzi Joseph Zwane assumed the role of mining minister on September 23 2015, at a critical moment for the mining industry. With China having signaled its intention to move away from the infrastructure-dependent export growth model it had employed to power economic growth for two decades, commodity markets and miners had been caught offguard at the speed in which China’s demand had slowed down.

In the space of a few months industry heavyweights Glencore had stumbled, and Anglo American looked vulnerable. Closer to home, rising labour and electricity costs in conjunction with falling commodity prices meant the commodity cycle had turned viciously. Everyone had to cut costs, and quick. Lonmin was bankrupt and Harmony was staring down the barrel.

Enter Zwane. Plucked from the relative obscurity of the Free State Department of Agriculture and Rural Development and armed with a teaching diploma, was this the guy to rescue the industry in its hour of need? What of the Mining Charter and the revised Mineral and Petroleum Resources Development Act? Could he bring certainty, stability, and recovery? Alas, no. The only thing Zwane brought was the Guptas.

His trip to Zurich in November last year to meet Glencore’s number one was only billed as a gallant effort to save jobs (at Optimum) when the details landed on the front page of the Sunday Times. But the damning weight of non-evidence revealed that it was nothing more than a jaunt to do his master’s bidding.

If Zwane was really interested in saving jobs, surely the Minister would have gone and pleaded his case at 20 Carlton House Terrace (the headquarters of Anglo American)? He also would have flown to Rio and punted SA Mining Inc to Vale, another mining behemoth head-quartered in an emerging market. And following that, surely a trip to Melbourne too, to beg BHP Billiton (a company extremely familiar with the country) to reconsider its de facto withdrawal from the Republic?

By way of policy development Zwane has delivered nothing. His complete lack of understanding of the commodity cycle and the challenges mining companies face was revealed in the revised Mining Charter, which despite a court case in which the DMR is a respondent, imposed all sorts of terms and conditions on mining companies including perpetual BEE ownership – the very issue the department had approached the courts to clarify.

Short pants, like his Afrikaner tweeling, is also a coward. He made bold promises to the workers at Lily Mine, offering financial assistance and promising to retrieve the bodies of the three miners that are STILL trapped underground. When Amcu pressed him on the issue on August 18 by marching to the offices of the DMR, he chose not to front up to them in person, instead sending his subordinates down to face the music.

But short pants’ finest hour was still to come. Last Friday, as if the mining portfolio in the midst of a crisis was not a big enough assignment, the self-appointed regulator of commercial banking, the National Treasury, and the South African Reserve Bank, via his chairmanship of the Inter Ministerial Committee “set up by cabinet to consider the implications of the decisions of certain banks and audit firms to close the accounts of and/ or withdraw auditing services from Oakbay Investments” declared there would be a judicial investigation into the conduct of South Africa’s commercial banks and regulatory agencies. And the payment clearing system. (Does he even know what that is?) And the licensing of banks. And while we are at it, we’ll investigate National Treasury. Oh, and we are going launch a state bank. Hell, he even threatened to repeal every piece of major international anti-money laundering legislation the locals have signed up to since 9/11, which would make us a pariah, once again.

His timing was impeccable. SA is of course, trying to avoid a ratings downgrade, and a recession to boot. And his complete lack and appreciation for SA’s banking industry shone through. Not only is it one of the best regulated industries of its kind in the world, but SA banks are so far along the curve in terms of innovation they are regarded as leaders – FNB and Capitec can be cited as recent award winners.

And if there is some wisdom the only other guy that could challenge Zwane for the lead role in Kortbroek 2, The Sequel – David Des van Rooyen – could impart: you don’t screw with international capital. Because even your President will throw you under the bus for that.

As you have now learnt, kortbroek. So, back to school.

-Brought to you by Moneyweb.

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