Thursday, June 24, 2010

Mining Companies Stalling on Black Economic Empowerment

A study by KIO Advisory Services, commissioned on behalf of the South African Mining Development Association, has found that the top 25 South African mining companies were lagging far behind the legislated targets contained in the black economic-empowerment (BEE) codes of good practice. The report stated that the sector had "huge" shortfalls in the representation of black people in management.

The report showed that the South African mining sector was not "anywhere close" to achieving the target of 26% black ownership by 2014. It stated that the gross value of black shareholding amounted to 5,27% of the total R1,8-trillion market capitalisation of the top 25 mining companies, as at the end of March 31, 2010.
Measured against the BEE codes, the percentage of black people in top management was 17,9% compared with a compliance target of 40%, while the percentage of black people in senior management was 15,5% compared with a compliance target of 43%. Middle management showed a 63% compliance with almost 27% of middle management being represented by black people and junior management ranked at 68% compliance with 32,8% being presented by black people.

The report showed that white women had a representation of 7,4% in senior management, a 14,6% representation in middle management and an 8,1% representation in junior management.Gqubule pointed out that the mining charter of 2002 had set a 40% target for historically disadvantaged South Africans (HDSAs) in management, which included white women. The high numbers of white women in the HDSA targets for management have the effect of distorting the true picture of transformation in the sector. This is why they benchmarked the sector against the BEE codes in addition to the Mining Charter. (Mining Weekly, 6/24/2010)

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