New minister of mines tainted by Gupta family link

The meteoric rise of the new mineral resources minister, Mosebenzi Zwane, is one of the fastest in local political history. Less than a month after he was sworn in as an ANC MP, President Jacob Zuma has appointed him to the Cabinet and moved the former mineral resources minister Ngoako Ramatlhodi to head public service and administration.

In less than two years, Zwane moved from being MEC for economic development, small business, tourism and environmental affairs in the Free State to heading the province’s agriculture and rural development portfolio for three months before being sent to Parliament.

Zwane has no background in mining and takes over the position at a time when the industry is undergoing serious problems in a poorly performing economy.

Both government and the industry have been trying to find ways to save jobs after several mining companies signalled that they were heading towards mass retrenchments.

While political weight is a crucial element in landing a Cabinet post, Zwane’s influence in the governing party’s national politics is unclear.
He is not a member of the ANC’s highest decision-making body between conferences – the national executive committee (NEC) – but his close relationship with Free State strongman Premier Ace Magashule gives him some clout.

And as the ANC’s Free State treasurer, he does have some influence at a provincial level. With the growing influence of the so-called Premier League, a group said to be controlled by Magashule, Supra Mahumapelo of North West and David Mabuza of Mpumalanga, Zwane is likely to be comfortable in the Cabinet because of the three mens’ close ties to Zuma.

The Premier League has in the past suggested that Zuma’s term of office as ANC president be extended to the end of 2018 in order to align the party and the president’s term of office with that of government.

Some Cabinet reshuffles and appointments do get mentioned at ANC meetings – without specific individuals necessarily being named – but NEC members the Mail & Guardian spoke to said Zwane’s appointment took everyone by surprise. It was not raised at last weekend’s NEC meeting, they said.

ANC secretary general Gwede Mantashe refused to comment on Zwane’s appointment, saying it was the party that decided to deploy the new mineral resources minister.

“You [the media] must react in the way you see things,” he said before he referred the M&G to ANC spokesperson Zizi Kodwa. Attempts to reach Kodwa were unsuccessful.

The public protector’s office is investigating Zwane’s former agriculture department for the maladministration of a dairy farm project that involved the wealthy Gupta family, which is close to Zuma.

The public protector’s office is also separately probing Operation Hlasela, a Free State government’s service delivery project, which Zwane is said to have helped drive.

Reaction from opposition parties to Zwane’s appointment was mainly negative, with some questioning his relationship with the Guptas, who also hold interests in mining.

The Democratic Alliance spokesperson on mineral resources, James Lorimer, said replacing Ramatlhodi with Zwane would not solve the mining industry’s problems.

“What can Zwane deliver that could not be delivered by other ANC heavyweights who know something about mining?” Lorimer asked. “Deputy minister Godfrey Oliphant comes to mind.”

Zwane does not appear to have any track record of involvement in the mining industry. Critics say that what he does have a record of is following the orders of Magashule, a key political ally of Zuma’s.

Free State ANC spokesperson Thabo Meeko defended Zwane’s lack of experience in mining by saying he did not know any previous minister of the ANC who had mining experience prior to their appointment to that portfolio. Meeko said Zwane’s experience as MEC for economic development in the province should assist him as the portfolio dealt with mining issues.

Lorimer also questioned Zwane’s closeness to the Gupta family. “The Gupta family is involved in coal and uranium mining and have attracted allegations that their companies have flouted regulations. Zwane’s appointment will throw a spotlight on his relationship with them.”

The former MEC’s track record in the Free State also appears questionable, said Lorimer.

“Zwane has, at best, been a mediocre MEC in the Free State provincial government. Since the last election he has attended only one of two of the meetings of his economic development, tourism and environmental affairs portfolio committee and has a bad track record of ignoring questions asked of him in the legislature.”

In 2010 when he was MEC for co-operative governance and traditional affairs, Zwane was criticised by Parliament’s select committee on co-operative governance and traditional affairs for failing to provide proof that the province was making efforts to pull three of its municipalities out of financial trouble.

The Economic Freedom Fighters (EFF) said that, although the party disagreed with Ramatlhodi’s apparent conflict of interest when he was mining minister because he held mining shares, it suspected that his removal from the portfolio had a lot to do with his “audacity to challenge mining capitalist interests linked to the Guptas and deputy president Cyril Ramaphosa”.

EFF deputy president Floyd Shivambu said “speaking against established capitalist interests in the Zuma government is a crime and Ramatlhodi is the first casualty for trying to act brave”.

EFF commander-in-chief Julius Malema said Zwane’s appointment was likely to worsen the mining industry’s woes.

“South Africa is currently undergoing a massive crisis in the minerals and mining sector and the introduction of a possibly corrupt minister with no understanding of the mining sector and its global dynamics will only worsen the crisis for South Africa,” he said.

A teacher by profession, Zwane is also the former mayor of the Thabo Mofutsanyana district municipality.

Enemies in high places cost minister his job

So it ended in tears. Former mineral resources minister Ngoako Ramatlhodi acted bravely by taking on politically connected mining boss Bridgette Radebe, but that cost him his job this week in one of the portfolios that play a key role in the country’s economy.

Bridgette Radebe is the wife of Minister in the Presidency Jeff Radebe. She is also a mining magnate, ANC benefactor Patrice Motsepe’s sister and Deputy President Cyril Ramaphosa’s sister-in-law. Ramaphosa is married to Bridgette’s sister, Tshepo Motsepe.

This week, President Jacob Zuma announced that Ramatlhodi would become minister of public service and administration, a position left vacant by the death of Collins Chabane in March.

In his new post Ramatlhodi will face off with trade unions, particularly during wage negotiations.

The tension between Bridgette Radebe and Ramatlhodi has been simmering for almost a year, but the last straw was a confrontation during a recent consultative forum for the mining sector, convened by Zuma in Pretoria. She made it clear that she was unhappy with Ramatlhodi and some top bureaucrats in the mineral resources department, whom she accused of trying to be both player and referee.

Radebe was one of the first role-players in the mining industry to express delight at Ramatlhodi’s removal from the mineral resources ministry. During an interview on Wednesday morning with SAfm’s news and current affairs programme AM Live, she welcomed “this move of the minister going to another department … We are very happy about the fact that hopefully the issue of conflict [of interest] will be partially addressed”.

Jeff and Bridgette Radebe walk the red carpet, but Ngoako Ramatlhodi has been pushed off. (David Harrison, M&G)

At the centre of the disagreements between Ramatlhodi and Radebe was the minister’s approval of the sale of Total Coal South Africa to Exxaro Resources.

Radebe’s Mmakau Mining, which is a 26% black economic empowerment shareholder in Total Coal SA’s Dorstfontein and Forzando collieries, opposed the sale.

Radebe said there was nothing wrong with her opposing Exxaro’s acquisition of Total Coal SA. “If your partner wants to sell their shares and you want to buy the shares of the mines that you bought, at the mine that you developed, is there anything wrong?” Radebe said on SAfm.

“But if you have a minister that goes and interacts and gives an ear and talks to the Chamber of Mines and all other stakeholders but does not allow you an audience, because for over a year I have been trying to talk to the minister … the only time we could raise our concerns is in a meeting that the president is chairing.”

Total Coal SA is the fifth-largest coal producer in the country. Exxaro Resourceseventually

bought the mining company for at least 19% less than the first announced price because of a slump in fuel prices. Exxaro will pay $262?million in cash and then pay five annual instalments totalling about $120?million.

In the same SAfm interview Radebe pointed out that her main concerns with Ramatlhodi were conflict of interest and what she perceived as the minister’s lack of interest in protecting “the government and the people of South Africa for the advancement of transformation”.

“We have a minister that owns shares in Anglo American Platinum, the very company that is suing, that is taking the government to court via the Chamber of Mines leadership. The very mine, Anglo Plats, which he is a partner in, wanted to retrench 14 000 workers at one stage,” Radebe said.

The Sunday Independent reported two weeks ago that Ramatlhodi had accused Radebe of trying to blackmail him and hold him to ransom. Ramatlhodi told the newspaper that he was “not obliged to consult Mrs Radebe before concluding the [Total Coal SA] deal”.

He added: “No one can hold me [to] ransom. She wants to blackmail me by referring to the mining shares that I have acquired during my divorce proceedings.”

Ramatlhodi holds shares in Legakabje Mining and Exploration and has said in the past that he placed them in a blind trust to avoid a potential conflict of interest.

Last month Ramatlhodi ordered Glencore to suspend all operations at its Optimum coal mine, citing the “inhumane” way it planned to carry out job cuts. The company announced in July it would cut 380 jobs at Optimum and shut down part of the mine because of lower coal prices. Ramatlhodi later withdrew Glencore’s suspension.

On Wednesday Radebe said this was one of the biggest problems. “In that meeting we spoke about companies that were given compliance notice by the department of mines. I raised a comment that for as long as the very departmental officials are the ones that have to implement, adjudicate and secure compliancy and they are the very ones that own the companies that are not compliant and are taking the government to court, then surely there is a conflict of interest.”

Neither Radebe nor Ramatlhodi could be reached for comment on Wednesday.



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