No one wants to be the bearer of bad news, but it is a necessary evil in order to get back on the right track. There are ways and means of doing so in such a way that inspires people to make those changes. Honesty and openness, in my experience, is one of the non-negotiable factors in that approach. Whether the 2015 State-of-the-Nation address fits into this category is debatable. Peter Major’s piece, originally appearing in the February edition of SA Mining, discusses the letdown this year, where the marks were not just missed, but evaded entirely – CH
By Peter Major
On 15 August 1985, President PW Botha disappointed South Africa – and the world – with his infamous Rubicon Speech. There were many stories and rumours circulating in the weeks beforehand that Botha was going to make a few ‘very hoped for’ important and positive announcements on South Africa’s political and economic policies. Alas, the speech said nothing of the kind, and so greatly disappointed an audience of over 200m people worldwide.
Botha missed his chance to go down in history as the man who steered South Africa back onto a respected and admired world stage. On 12 February 2015, President Jacob Zuma’s ‘about to be given’ State of the Nation Address (SONA) – was also rumoured and – hoped for – to be a speech of some very important determinations and policy changes. It came at the end of the very successful and well-attended 21st Investing in African Mining Indaba, which was host to over 7000 delegates from 110 countries, including a charismatic Tony Blair as keynote speaker with his hugely optimistic speech that centred on being positive on Africa. So everyone in the country – and many millions outside of South Africa – were anticipating some ‘way-overdue’, genuine substance and good news from President Zuma’s SONA. Alas, the event was too close to and thus sabotaged by Friday the 13th. Devastating! We all know about the superstitions and dread of Friday the 13th.
And it seems to have cursed this year’s SONA into an unmitigated disaster. From the very beginning, which started with the rabble-rousing and ejection of the Economic Freedom Fighters, to the Democratic Alliance’s ‘walk out’ followed by President Zuma’s chuckle and then wooden, monotone ‘seen it for the first time’ recital of a SONA that confused and depressed virtually everyone who heard or read it. Here, 30 years after Rubicon 1, came Rubicon 2. Perhaps it was the mining audience and industry who felt it the most. They had been led on for weeks by ministers and government insiders that serious, definitive, positive announcements were in store. Foreigners and locals alike were expectant, optimistic and so genuinely hopeful. So what was it that they were expecting to be said?
1) Confirmation of the ‘once empowered, always empowered’ black economic empowerment (BEE) requirement was one thing. With most of South Africa’s mining industry on its knees (and this is in a weak rand and still higher than normal commodity price environment!) – ‘some’ clarification on this hugely costly, complex, corruptible, yet mandatory political requirement was so desperately needed and long overdue. Alas – nothing!
2) Next was the expected announcement that South Africa’s Tripartite Alliance of the African National Congress, Cosatu and the South African Communist Party, – which has had such a huge, disastrous effect on South Africa’s once formidable mining industry – would be going their own separate ways with regard to dictating and implementing government economic and labour policy in the country. With the loss of over 400 000 direct jobs in the gold industry alone (and at least 400 000 more in gold’s peripheral service, manufacturing and engineering industries) – it seemed reality and desperation would finally convince everyone in South Africa that ‘enough was enough’.
As Johan Rupert had so eloquently put it only a week before “Unions do not create jobs. They destroy them. Furthermore – they do not represent the unemployed (4.5m – 7.5m). They represent but a small percentage of South Africa’s population and none of the millions unemployed.” But President Zuma never mentioned this.
3) Nor did the President mention how the country has managed to close 75% of its gold mines since 1994, lowering production from 600 tons a year to a measly 150 tons a year today – even though gold is trading today at double (in ‘real’ terms) 1994’s price. And making this more devastating was South Africa growing its population from 36m to 54m at the same time! So less gold, less jobs, less income! But more people, so more poverty!
4) President Zuma also didn’t mention that Eskom has still not added 1GW of electricity to its total since 1994, and so he fully understood the futility of pushing the fragile, money-losing, rapidly closing mines for expensive, energy-intensive, additional mineral beneficiation. And if anything, South Africa should want to incentivise them to stay open even in hard times, by granting them accelerated and inflation adjusted allowances for capital expenditure and research and development in all underground mines. Particularly deep ones – as they employ many thousands and almost all their costs are local. But – not a word!
5) President Zuma also did not re-iterate his mining minister’s Indaba speech of two days earlier – where it was stated categorically that the levers of State would no longer compel the country’s mining industry to create BEE oligarchs – and – that the rule of law would be categorically upheld on the mines and ‘anyone’ committing violence, destruction or other unconstitutional acts would be immediately arrested, charged, prosecuted and jailed (à la the 2010 World Cup!).
6) The President did mention that R1.3bn would go to impoverished mining communities. But he didn’t say that it ‘should’ go to keep existing mines from closing, which would be a much better, moreleveraged use of the funds and was the ‘best way’ to avoid ‘creating’ impoverished mining communities. A SONA along the above points would have been more electrifying and helpful than almost anything else the President could have said or done. But it was not to be – as this is what the Rubicon does. It separates the heroes, from the ‘rest’.
