SABC News - Mining companies urged to be more transparent:Friday 12 February 2016

Mining companies urged to be more transparent

Friday 12 February 2016 06:30

Tshepo Mongoai

Mining companies believe that governments do not understand their current plight triggered by a slump in commodity prices.

Mining companies believe that governments do not understand their current plight triggered by a slump in commodity prices.(SABC)

The 2016 Mining Indaba experts have appealed to mining companies to be more transparent regarding the impact of the current commodity slump.

Some have urged the sector to retrain workers facing retrenchment in skills outside mining.

Lack of adequate measures by the industry to deal with any cyclical downturn has also been raised as a major concern.

Views and opinions point to divisions that still exist between many African governments, communities and mining companies.

Mining companies believe that governments do not understand their current plight triggered by a slump in commodity prices.

But some mining experts like Sheila Khama of the African Development Bank say mines needs to be more open and transparent.

"We experience a squeeze in the mining sector. Analysts are telling us that prices are down. It seems to me that transparency becomes very important."

Mining companies are also caught between traditional leaders and their communities.

In some cases, the ability of traditional leaders to negotiate honestly on behalf of their nations is starting to be questioned. Many communities want direct engagements with mining companies.

His Majesty Kgosi Leruo Molotlegi of the Royal Bafokeng Nation is one of the traditional leaders that have been taken to court by some members of his nation, who believe that they deserve more from mining royalties.

Molotlege told the mining indaba that the nation is exploring various models to ensure that royalty funds benefit the whole nation.

"We have been looking at other model around the world, so our model is to invest in institutions but there's been a huge debate about this point that we have covered all large capital expenditure and also cover individual to also gain access."

Some have questioned the lack of foresight by mining companies in not preparing for the current dark days in the industry.

John Capel executive director of Bench Marks Foundation believes that mining companies have always been aware of a possible downturn in the future.

"The industry never thought of building a sustained wage or fund knowing this is a cyclical industry. We can’t say we only waking up to this problem now."

Meanwhile, mining activity registered its fourth consecutive month of contraction in December, falling 0.3 % year-on-year from November's 1.3 % fall.

This is seen as an indication of a sector whose troubles are far from over.

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