By the way, if there is a memo that has gone out to ANC members telling them to go easy on officials and Ministers in the portfolio committee, there's no need to send that memo to the Portfolio Committee on Mineral Resources because it's already allergic to tough questions. [Laughter.]
Former Gold Fields chair, Mamphela Ramphele, says the government shoved a list of empowerment beneficiaries down Gold Fields' throat. [Interjections.] When Gold Fields complied, it won rights to mine at South Deep, its most profitable and only remaining South African gold-mining operation. And who was on that list of beneficiaries? Well, the list appears to have been assembled by convicted bank robber Gayton McKenzie. He was apparently paid some R30 million for the tough task of handing out patronage. The list included just over 70 beneficiaries, from President Zuma's lawyer, to former Deputy President Baleka Mbete, Zindzi Mandela, as well as the daughter of a former member of the Portfolio Committee on Mineral Resources, known for his softball questions. [Interjections.] It seems name-dropping is not only a problem at the Waterkloof Air Force Base.
These are some examples of who benefits from a subjective system of ministerial and official permissions. Decisions don't have to be fair or stand the test of law. They can be capricious and illogical. Comrades can be given special favours and, equally, those who do not do exactly as the state wants can be punished.
It's becoming increasingly clear that the whole edifice of our mineral resources regulatory regime is there primarily to advance the interests of the crony class. Cash for comrades! The imperative to build the economy so that government revenues and employment can benefit comes a poor second.
If there was truly an intention to put the needs of broad-based empowerment first, then government is missing opportunities to show it. In the new legislation, there could have been some attention paid to artisanal miners. If you want to know who they are, you can find them every day of the week on the northern outskirts of Soweto within a few metres of the Randfontein road, panning for gold like old-time Rand pioneers. It's unlicensed mining. They are breaking the law, and are probably deeply in with criminal syndicates, protected as they are by armed minders. The police know they are there. The Hawks know they are there. The portfolio committee knows they are there. The Department of Mineral Resources knows they are there, and nothing gets done.
If they don't have to obey the MPRDA, why should anybody else? Could these miners and others in the same position not be given some way of continuing their work legally? If this government was intent on empowering people, it would have looked at legalising their position, but is has not because they are not a priority. [Interjections.]
I am willing to be convinced that it's not all about cronies. Minister, here is a direct challenge to you. To help us believe that you truly back the empowerment of all disadvantaged South Africans, change your definition of BEE in the new Mining Charter. Make it so that the only empowerment that counts is the empowerment of workers on the mines ... [Interjections.] ... and people from surrounding communities. [Interjections.]
If you do that, Minister, I will reconsider my opinion of your motives. But fail to do it and my opinion will be confirmed. All I can see are more oligarchs being empowered again and again. [Interjections.]
A whole new industry awaits us in the oil and gas-drilling sector, and here is another example of how government's poor stewardship of our mineral resources is driving away investors and costing us opportunities. [Interjections.]
New theories about South Africa's offshore seabed geology mean that some of the world's major offshore drilling companies have taken up leases off our country's coast for the first time ever. It costs between $75 million and $100 million to drill one deep-sea well.
A number of companies stand ready to drill several test wells each off the West Coast, off Cape Town, off Mossel Bay and off Durban. Those companies expect to find at least gas in large quantities, if not oil. This should be one of South Africa's most optimistic economic stories, and yet it may never happen because the MPRDA Amendment Bill is scaring off these drilling companies that may never risk their money when government will control all the rewards.
Here's why. Previously, drillers were faced with having to hand over 9% of their operations to BEE partners, as they fell under the Liquid Fuels Charter. They will now fall under the Mining Charter with a 26% BEE requirement.
More worrying is that there is also a clause that gives the state a free carried interest of unknown percentage in any oil or gas operation. And there's more. There is a provision for the state to acquire yet a further interest through an organ of state or a state-owned company, the size of which is not specified. All this, of course, comes on top of regular taxes and royalties.
This ownership grab is accompanied by vague but potentially devastating powers given to the Minister to regulate what products are sold where and at what price, effectively nationalising all critical decision-making.
These drilling companies are used to handing over a lot of tax and control to governments, but even for them this may be too much. None of this potential energy boom may ever happen if the MPRDA Amendment Bill, as presented, becomes law. These major drilling companies will begin to drift away to find easier places to operate - in Africa, and across the world.
It seems the ANC's focus is to put its cronies in charge of the economy, no matter that in doing so it will hamper the growth of the economy and keep people poor. [Interjections.] The ANC would rather see cronies be king of an ant heap than lift the whole of the country out of the mire of poverty. [Interjections.] [Applause.]