:00:07. > :00:14.Welcome to HARDtalk, with me, Zeinab Badawi. I am here in Johannesburg,
:00:15. > :00:18.at the home of the only black woman in South Africa to head a mining
:00:19. > :00:23.company. Daphne Mashile-Nkosi has made a fortune out of her business
:00:24. > :00:28.ventures. But the mining industry in South Africa is beset by strikes
:00:29. > :00:29.over pay and conditions. How far has South Africa's mineral wealth
:00:30. > :00:51.benefited its poorest people? Daphne Mashile-Nkosi, welcome to
:00:52. > :00:58.HARDtalk. Thank you very much. Thank you,
:00:59. > :01:01.Zeinab, for inviting me. In his State Of The Nation address
:01:02. > :01:05.in February, President Jacob Zuma said South Africa needs a mining
:01:06. > :01:07.industry that is working. It isn't, is it?
:01:08. > :01:15.Yes, it isn't. There's a lot of challenges. Most of the challenges
:01:16. > :01:20.in the mining sector are still to come. If you look, South Africa has
:01:21. > :01:24.always been a mining country, mining is the backbone of this country.
:01:25. > :01:32.It is a country very rich in natural minerals and resources.
:01:33. > :01:36.Well endowed with mineral resources. What we are referring to here, ever
:01:37. > :01:38.since Marikana, August 2012, 44 striking miners were fired upon,
:01:39. > :01:42.ongoing enquiry going on. Even before that, there's been a great
:01:43. > :01:51.deal of bad press for the mining industry. Striking workers because
:01:52. > :01:54.they feel that they are not enjoying the proper benefits they should be
:01:55. > :01:58.for their hard work. Yes. I think that the model that was
:01:59. > :02:04.used in the mining sector for decades was a wrong model. And the
:02:05. > :02:07.dawn of 1994, liberation, people beginning to look at their rights as
:02:08. > :02:16.individuals. The benefits in terms of what you put in is what you must
:02:17. > :02:19.get out. They realised, there was an awareness programme, recognition
:02:20. > :02:24.that we are actually not getting enough. That the risks, in terms of
:02:25. > :02:30.being on the coalface, deaths in the country. And from a health and
:02:31. > :02:32.safety point of view, the government has actually come with very good
:02:33. > :02:36.policies. I should say at the outset that you
:02:37. > :02:42.are a member of the ruling African National Congress, the ANC. But
:02:43. > :02:47.things actually have not got any better. Let me give you one example.
:02:48. > :02:51.One man of about 40, he works in Paarl platinum mine. And he has got
:02:52. > :02:57.nothing to show for his years and years of hard work. He's got a
:02:58. > :03:01.family to support. And he told Reuters in an interview in February,
:03:02. > :03:04.he is a striking miner, "We have had this African National Congress, ANC
:03:05. > :03:08.government, for 20 years. But we are still slaves." Is what he says.
:03:09. > :03:11.Remember that the ANC does not own the mining companies. The mining
:03:12. > :03:22.companies that we are talking about are mining companies that have been
:03:23. > :03:26.there for decades. The reason I have brought that up is
:03:27. > :03:30.because you said, since 1994, when we have had the ANC government which
:03:31. > :03:34.is trying to do something. And I am trying to put to you that, actually,
:03:35. > :03:36.just one example of many, saying things aren't any better.
:03:37. > :03:40.Well, I think that things have actually gone better. And I can
:03:41. > :03:42.actually substantiate what I am talking about. Before 1994, black
:03:43. > :03:46.people weren't even allowed to start businesses. Or even get into a bus.
:03:47. > :03:52.There were white buses and black buses. That's the first point. Come
:03:53. > :03:58.1994, we have the Labour Relations Act that actually at least gives
:03:59. > :04:05.employees a voice. First of all, you can't just dismiss a worker. You
:04:06. > :04:07.have to go through a process. Secondly, the benefits they actually
:04:08. > :04:12.get, there's regulations attached to that.
:04:13. > :04:17.But that's the whole point, Daphne Mashile-Nkosi. The miners are
:04:18. > :04:24.striking in their thousands, and have been for some time. They make
:04:25. > :04:27.deals here and there sometimes. In the gold and platinum mining
:04:28. > :04:32.industry, they say they are not getting proper pay., Conditions of
:04:33. > :04:34.awful. We work in hot, stuffy, cramped conditions, the
:04:35. > :04:38.accommodation we have is absolutely awful. That is why they are going on
:04:39. > :04:43.strike. If things were fantastic, they wouldn't be, would they?
:04:44. > :04:45.Well, I have never heard or seen of any country where things are
:04:46. > :04:48.fantastic. They are saying, look, give us a
:04:49. > :04:51.living wage. And the mining companies say, we can't afford that,
:04:52. > :05:00.that's what the bosses are saying. Who is right?
:05:01. > :05:04.I don't know who is right, but what I do know is that the government
:05:05. > :05:07.does not look at miners only. We have a whole range of different
:05:08. > :05:11.segments of society. We have doctors that have to earn a living wage. You
:05:12. > :05:22.have professionals that have to get a living wage.
:05:23. > :05:25.I mean, one consultant from the Africa Practice Consultancy says it
:05:26. > :05:28.is critical that the labour unrest issues be resolved, and that the
:05:29. > :05:35.mining companies should adopt a proactive strategy in terms of wage
:05:36. > :05:39.negotiations. For somebody like him, and many agree with him, the onus is
:05:40. > :05:42.on the companies. It is the company bosses, Daphne, who earn the
:05:43. > :05:44.millions and millions of dollars every year, some of those right at
:05:45. > :05:48.the top. I think I agree with you. But,
:05:49. > :06:03.remember, the mining-related problems did not start when the ANC
:06:04. > :06:06.came into power. There are generations of big companies listed
:06:07. > :06:09.in London and all over the world having, not only in terms of paying
:06:10. > :06:12.people, but their rehabilitation. Contamination of communities. The
:06:13. > :06:17.housing. So, it was just something that was about to happen. Marikana
:06:18. > :06:21.was a time bomb that was about to happen. You needed something just to
:06:22. > :06:25.push you just a little bit. It didn't start in 1994. It has always
:06:26. > :06:28.been there. The problems, obviously, did start
:06:29. > :06:33.way before the ANC government in 1994. But things are not being fixed
:06:34. > :06:36.now. Let me give you an example, Sandile Zungu has said, he's the
:06:37. > :06:38.Secretary-General of the Black Business Council. He said: The
:06:39. > :06:41.mining migrant labour system is apartheid's worst legacy. It has
:06:42. > :06:44.broken up South African working life. Migrant labourers in the
:06:45. > :06:49.mining industry, it is a tragedy, it is something which still goes on.
:06:50. > :06:52.Yes. And that is why you look at the Mining Petroleum Resources Act 1995,
:06:53. > :07:01.which prescribes that new entrants into the mining sector do provide
:07:02. > :07:14.government with a plan. It is called a Social And Labour Plan. What does
:07:15. > :07:18.that mean? It means, before you can be awarded the mining rights, or the
:07:19. > :07:22.permit to mine, you need to give the government a social plan, in terms
:07:23. > :07:25.of what is it you are actually bringing into the communities around
:07:26. > :07:29.where you are going to mine. What is it that you are going to do in terms
:07:30. > :07:30.of contributing towards social infrastructure in that particular
:07:31. > :07:38.area? So, what are you doing? You run, you
:07:39. > :07:43.set up in 2001, Kalahari Resources. Then, in 2006, you set up Kalagadi
:07:44. > :07:46.Manganese Mine in Northern Cape. You employ about 3,000 people. What are
:07:47. > :07:50.you doing to develop the community? Look at the Northern Cape. There is
:07:51. > :07:57.no electricity. There was no electricity in the Northern Cape. No
:07:58. > :08:02.water, it's almost a semi-desert. I had to pull water one kilometre, to
:08:03. > :08:07.bring it to the mine. Along the way, the community was benefiting in
:08:08. > :08:09.terms of actually getting the water. You are trying to bring
:08:10. > :08:13.infrastructure and meet the community needs.
:08:14. > :08:16.I have pulled in infrastructure. And that has been recognised here in
:08:17. > :08:19.South Africa. In terms of housing, Because of the
:08:20. > :08:22.migrant labour system, most of the people would be taken from
:08:23. > :08:26.Mozambique, Lesotho, and they would only see their families...
:08:27. > :08:29.Even in South Africa, there are migrants? So do you employ migrant
:08:30. > :08:32.labour in your mines? For instance...
:08:33. > :08:39.Do you? We don't have migrant labour
:08:40. > :08:42.anymore. Not at the moment. Within South Africa itself, people
:08:43. > :08:45.who leave their families in rural communities, uprooted. Families are
:08:46. > :08:55.left broken up. 80% is prescribed by the department
:08:56. > :08:58.that you must utilise local labour. As new entrants, we have a better
:08:59. > :09:05.responsibility, and better chance of redressing the imbalances of the
:09:06. > :09:09.past. So you say, I, Daphne Mashile-Nkosi,
:09:10. > :09:18.in my Kalagadi Manganese Mine, I have no migrant labourers? Well, I
:09:19. > :09:24.do have people who are coming from other parts, but 80%... And give
:09:25. > :09:29.them decent accommodation? They have decent accommodation.
:09:30. > :09:31.What do you describe as decent accommodation?
:09:32. > :09:34.It is a room with a toilet inside, a table, a study, a bed. Air
:09:35. > :09:38.conditioning because the environment is very harsh. In terms of my Social
:09:39. > :09:43.And Labour Plan, I have made a commitment to build 300 housing
:09:44. > :09:46.units within the local area. So that we want to attract professional
:09:47. > :09:48.skills and local people that can bring in their family.
:09:49. > :09:52.What do you pay your workers? As I indicated to you, I am still in
:09:53. > :09:55.the construction phase. I will only start production in August.
:09:56. > :10:03.What will you pay them? We will pay them a living wage. You
:10:04. > :10:10.need to look at what the industry is paying. You remember, I am not the
:10:11. > :10:15.only miner. There are juniors, seniors, there are companies with a
:10:16. > :10:19.lot of experience. So all the bosses gang up together
:10:20. > :10:22.and say, we mustn't pay too much because we've all got to work
:10:23. > :10:25.together and make sure that the workers don't get too much. Is that
:10:26. > :10:29.what you are saying? I think South Africa is different,
:10:30. > :10:31.though. In the sense you have the unions negotiate. Where labour,
:10:32. > :10:36.where government, where everybody goes there. And actually we have the
:10:37. > :10:45.bargaining chamber, all sorts of structures. The Chamber Of Mines
:10:46. > :10:49.also representing the industry. So, you won't set a good example and
:10:50. > :10:54.say, I, have decided I need to lead by example. I want to make sure my
:10:55. > :10:56.miners get what they think is a good living wage.
:10:57. > :11:00.I am already a very good example. Let me give you reasons why I am a
:11:01. > :11:11.good example. The fact I have built an 18.6 kilometre rail line. I have
:11:12. > :11:15.pulled electricity 70 kilometres. And, when I was pulling the
:11:16. > :11:18.electricity, you have to put in a double line. I only used a single
:11:19. > :11:22.line. The other line I actually utilised for the community. I did
:11:23. > :11:29.that deliberately. Remember, as of now, I am not generating revenue. I
:11:30. > :11:34.had a responsibility, and I knew that, for me, to change the mining
:11:35. > :11:36.sector, it is for me to do it and to become a very good example.
:11:37. > :11:43.The broad argument underpinning what we have been discussing so far is
:11:44. > :11:46.essentially this. The Mineral And Petroleum Resources Act 28 of 2002
:11:47. > :11:57.states that mineral and petroleum resources belong to the nation. And
:11:58. > :12:00.the state is the custodian thereof. Therefore, if these natural
:12:01. > :12:03.resources are part of South Africa's natural riches, why is it just a few
:12:04. > :12:06.who benefit disproportionately, compared to the many?
:12:07. > :12:10.I don't agree with that, and I'll tell you why. First and foremost, we
:12:11. > :12:17.have had minerals for many, many years, millions of years. If they
:12:18. > :12:19.remain in the ground, their development, the money, the
:12:20. > :12:25.employment opportunities will never happen, because you need a
:12:26. > :12:31.partnership. A partnership of investors that are prepared to put
:12:32. > :12:36.their money. Because you don't just wake up one morning and take a spade
:12:37. > :12:44.and go into the ground and take the minerals. You need to invest in
:12:45. > :12:53.infrastructure. So that you can you can take out the manganese. Before
:12:54. > :12:56.you can take out the manganese... But the ratio of investment to
:12:57. > :13:00.reward for some people has become too skewed, when you find that a few
:13:01. > :13:03.are benefiting to the tune of multi-multi millions of dollars. And
:13:04. > :13:06.then you have just got some just earning a handful of hundreds of
:13:07. > :13:09.dollars doing the real work at the coal face.
:13:10. > :13:12.I think it's only fair that South Africa decides which route they want
:13:13. > :13:17.to take. If they want to privatise, they can do that. If they want to
:13:18. > :13:20.give it to the nation for people to do that, they can do that.
:13:21. > :13:25.That is exactly what some people are saying should happen. Julius Malema,
:13:26. > :13:28.a former youth ANC youth wing leader, has now set up a new party,
:13:29. > :13:31.the EFF, the Economic Freedom Fighters. They say, let us
:13:32. > :13:35.nationalise South Africa's mines. It doesn't make economic sense. What
:13:36. > :13:39.makes economic sense for me is that I applied for a mining right, I paid
:13:40. > :13:47.to get the mining right. But I didn't only do that. I spent three
:13:48. > :13:53.years of exploration, three years. It has taken me 14 years. Since
:13:54. > :13:56.2001. Still in 2014, I have not made a cent. You have people who are
:13:57. > :13:59.entrepreneurs. You have people who are business people. People who are
:14:00. > :14:03.investors. People with foreign direct investment, for instance.
:14:04. > :14:06.That is what we are talking about. It is money that we require in the
:14:07. > :14:09.country to increase what this country needs in terms of the social
:14:10. > :14:20.spending that we need. All right. Looking at a related
:14:21. > :14:25.issue, when you talk about investment. When the ANC government
:14:26. > :14:28.came to power in 1994, one of its key strategies was what was known as
:14:29. > :14:30.black economic empowerment, whereby white-owned businesses, and they
:14:31. > :14:33.were mostly white-owned, would give up a small share of their assets to
:14:34. > :14:36.black economic empowerment ownership. And that has resulted
:14:37. > :14:39.with a small number of black people in South Africa becoming
:14:40. > :14:43.fantastically rich. And people say, hm, I wonder why that is the case?
:14:44. > :14:46.Can I ask you, have you been a beneficiary of black economic
:14:47. > :14:52.empowerment? I have never been. Yes, I have, I am
:14:53. > :14:58.a beneficiary of black economic empowerment. Not a free rider. In
:14:59. > :15:02.terms of legislation that allowed me, as a black person, to start my
:15:03. > :15:05.own business. That is how I have benefited.
:15:06. > :15:10.Black economic empowerment is not about those that actually get shares
:15:11. > :15:13.from white owned companies and do not pay for them. The legislation
:15:14. > :15:16.does not say that. If you are given the opportunity to bring black
:15:17. > :15:20.people into your business, they raise their own cash. And you ask
:15:21. > :15:25.them to raise the capital, and they pay it back. So it is not a free
:15:26. > :15:28.ride. But the general point being made by many, not specifically about
:15:29. > :15:30.you, Lawrence Mavundla, president of the National African Federated
:15:31. > :15:33.Chamber of Commerce and Industry, said the programme of black economic
:15:34. > :15:36.empowerment and preferential procurement has promoted business
:15:37. > :15:46.people who got their tenders through political connections, ie the
:15:47. > :15:53.members of the ANC. Is that true? I think I agree with him on that. I am
:15:54. > :15:56.not a tenderer. And you accept that you and your late husband, Stanley
:15:57. > :16:01.Nkosi, were ANC stalwarts. Of course. He was imprisoned in the
:16:02. > :16:04.mid-'70s. He was imprisoned with the current deputy president, Kgalema
:16:05. > :16:13.Motlanthe, and you yourself were an underground operative for the ANC.
:16:14. > :16:16.But that does not preclude me from having opportunities in South
:16:17. > :16:19.Africa. Let me give a perspective. I am very proud of my history and
:16:20. > :16:27.background, but I actually worked very hard, sacrificing my life. My
:16:28. > :16:30.husband sacrificed his life as a lawyer, fighting for the rights of
:16:31. > :16:36.the millions of this country who did not have a voice at all. Come 1994,
:16:37. > :16:39.it does not necessarily mean that because I was an activist, therefore
:16:40. > :16:45.I cannot take opportunities that are there for the taking. First and
:16:46. > :16:49.foremost, I don't have tenders. I don't do tenders. Every bit of
:16:50. > :16:57.opportunity that I have had, I have grabbed it with both hands. I have
:16:58. > :17:03.dirtied my hands. I have raised my own capital. Because you have a very
:17:04. > :17:08.impoverished background. In a sense, you are almost a rags to riches
:17:09. > :17:12.story. I am a rags to riches story. And I was shaped not by 1994, I was
:17:13. > :17:18.shaped by the environment and the effect that I was poor. I didn't
:17:19. > :17:25.want my children to go through that. Having said that, I don't think it's
:17:26. > :17:29.wrong for me to be in business. I'm very proud of my ANC connections,
:17:30. > :17:33.and the ANC recruited me when I was a student because there were so many
:17:34. > :17:37.wrongs and I was intelligent. I was expected to write in Afrikaans.
:17:38. > :17:41.Afrikaans was shoved down my throat as the medium of instruction, and
:17:42. > :17:48.that's when I started to become an activist. You have been applauded.
:17:49. > :17:56.You are a community worker. Yes, I have paid my dues. You worked in the
:17:57. > :17:59.Women's Development Bank Trust and then the loan office in the Women's
:18:00. > :18:04.Development Bank and you set up an IT company in 1999 and set up a coal
:18:05. > :18:07.mine. You are an entrepreneur and a hard-working woman. But I really
:18:08. > :18:10.just want to raise this issue of black economic empowerment and where
:18:11. > :18:14.it is and how you feel as somebody who has benefited from it, by your
:18:15. > :18:17.own admission. It was set up to prevent the exploitation of South
:18:18. > :18:20.Africa's natural resources by foreign companies and there is a
:18:21. > :18:22.mandatory 26% black economic empowerment ownership agreement to
:18:23. > :18:25.be achieved by this year. But people look around and they see, for
:18:26. > :18:28.example, Cyril Ramaphosa, ANC through and through, who was being
:18:29. > :18:33.groomed at one time by Nelson Mandela as his successor. One of
:18:34. > :18:37.South Africa's richest people. Worth about $700 million. And Cyril
:18:38. > :18:43.Ramaphosa is partner with Glencore, the big mining giant. So people look
:18:44. > :18:51.and think "Hmm, we wonder who black economic empowerment is actually
:18:52. > :18:56.benefiting". Do you accept that that criticism is valid? I think I accept
:18:57. > :19:01.the fact that BEE did not achieve what it set out to achieve. That, I
:19:02. > :19:04.can accept. I can't run away from that. But the point is that if you
:19:05. > :19:12.start doing something, it is almost like a dog. A dog doesn't bark at a
:19:13. > :19:19.car that is standing, but as soon as the car starts to move, the dog will
:19:20. > :19:24.bark at it. So we can't sit back and say there was nothing before 1994.
:19:25. > :19:27.We needed something that will actually...if, for instance, human
:19:28. > :19:30.nature did dictate that when people recognise the fact that they have to
:19:31. > :19:38.do something for other people, they do it, we wouldn't have had BEE. But
:19:39. > :19:41.it is just how far. You yourself say you put in your own money, but you
:19:42. > :19:47.also benefited from the Industrial Development Corporation, the IDC, of
:19:48. > :19:52.South Africa. No. I started with my own money. When I was bankable, I
:19:53. > :19:56.went to the IDC. They took my shares. They gave me money. There
:19:57. > :20:03.was value in my company, and they bought 10%. Let's qualify that. One
:20:04. > :20:05.final point on black economic empowerment. Even the current
:20:06. > :20:08.finance minister of South Africa, Pravin Gordhan, says that black
:20:09. > :20:15.economic empowerment policies have not made South Africa a fairer or
:20:16. > :20:18.more prosperous country. And that is the point. People say you have
:20:19. > :20:23.worked hard and earned your own money and you should benefit, but
:20:24. > :20:28.the question is, by how much? And there is too much inequality now in
:20:29. > :20:32.South Africa. It has even overtaken Brazil as a more unequal country. So
:20:33. > :20:39.yes, you can benefit, but not so much compared to the poorer person?
:20:40. > :20:46.Well, I think he is correct that BEE has not done what it was expected to
:20:47. > :20:59.do. Having said that, the government of this country has gone forward. --
:21:00. > :21:02.it has gone back to the drawing board. For instance, legislation is
:21:03. > :21:05.one area. Regional integration is another. Beneficiation is a story
:21:06. > :21:08.the government is selling so the downstream value chain can benefit
:21:09. > :21:12.ordinary people. I want to ask you this on mining. You have said it is
:21:13. > :21:14.the backbone of the South African economy, but there are people like
:21:15. > :21:17.the political economist Moeletsi Mbeki, brother of the former
:21:18. > :21:21.president Thabo Mbeki, who says this overdependency on mining is not good
:21:22. > :21:24.for the South African economy. We have neglected the manufacturing
:21:25. > :21:27.base in this country. It is actually shrinking. He says the reason for
:21:28. > :21:30.that is mainly because the ANC government, since it came to power,
:21:31. > :21:33.has been diverting resources from the production sector through the
:21:34. > :21:35.tax system to government consumption and government salaries, and
:21:36. > :21:41.therefore the private sector has no funds to invest in manufacturing.
:21:42. > :21:48.The South African economy cannot be an aeroplane flying on one engine. I
:21:49. > :21:51.agree with him. That was not him talking about the engine, that was
:21:52. > :21:58.me. The point is, you need manufacturing, not just the mining.
:21:59. > :22:05.I agree. That is why I'm manufacturing. I don't sell an ounce
:22:06. > :22:08.of ore. The operation plant is the crushing of the manganese. They have
:22:09. > :22:16.built the largest manganese plant in the world. It's processing the
:22:17. > :22:19.manganese. I am shipping out the ore, which therefore means that I
:22:20. > :22:25.export low-income commodity, which is ore. And then you re-export the
:22:26. > :22:29.manufactured finished version. South Africa...he is correct, and I will
:22:30. > :22:35.give you reasons. Briefly, steel-making. Infrastructure needs
:22:36. > :22:41.steel. All the ingredients of making steel are here. But we still import
:22:42. > :22:44.steel. So you are one of the rare miners who just doesn't just want to
:22:45. > :22:49.export the raw material, you want to give it some added value. I have
:22:50. > :22:53.grandchildren, so I know that they need to survive in the next 100
:22:54. > :22:57.years. You have been applauded for your efforts, Daphne. This year, you
:22:58. > :23:04.were made the CEO of Africa by the Africa Forum for CEOs. It was a huge
:23:05. > :23:10.competition with hundreds of entrants, and you won it. You have
:23:11. > :23:13.that to celebrate. But it is also 20 years since the first multiracial
:23:14. > :23:19.government came to power in April 1994. Is there anything for the
:23:20. > :23:25.South Africans really to celebrate? I always knew I was a go-getter. I
:23:26. > :23:29.worked hard. But I was never given an opportunity. I always had to work
:23:30. > :23:36.for other people, white people. Young, some of them. What 1994
:23:37. > :23:42.brought to me was an opportunity to fly on my own. So you feel there is
:23:43. > :23:46.something for you to celebrate with your own enterprise, but is there
:23:47. > :23:49.something for South Africans as a whole to celebrate? I think there
:23:50. > :23:53.is. We have a bill of rights. We have a constitution. You can say
:23:54. > :23:56.what you want to say about the president. We have a public
:23:57. > :23:59.protector. We have an independent electoral commission. I think there
:24:00. > :24:04.are challenges that still remain, and I think that really, it is a
:24:05. > :24:08.work in progress. Daphne Mashile-Nkosi, thank you very much
:24:09. > :24:14.indeed for coming on HARDTalk. Thank you very much.