Mines, state on collision course
Chamber confident it has strong case against charter
THE gazetting of the Broad Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry 2017 has set the government and the mining industry on a collision course, with the Chamber of Mines threatening to take legal action, citing lack of consultation.
Chamber president Mxolisi Mgojo said last week the chamber had no choice but to approach the courts for an interdict to suspend the implementation of the charter and to take the charter on review.
Mgojo said the chamber also planned to apply for a court date for a declaratory order on the “once empowered, always empowered” principle of the charter, which was previously suspended following intervention by President Jacob Zuma.
“It is disappointing we have to go to court to resolve this matter. We live in a democracy and it is in our right to defend the industry,” Mgojo told journalists two hours after Mineral Resources Minister Mosebenzi Zwane gazetted the reviewed charter.
Chamber vice-president Steve Phiri said the chamber was confident it had a strong case and it would go all the way to the Constitutional Court.
“There are a lot of constitutional issues. I will not rule out the possibility of the case being adjudicated by the highest court in the land,” said Phiri.
Zwane said the charter was final and it was in the best interest of the country as it ensured all South Africans shared the mineral wealth in a fair manner.
“The button has already been pressed. There is no turning back,” said Zwane.
Among other things, the charter wants 30 percent of mining companies to be owned by black people, including 8 percent to be allocated to employees, another 8 percent to communities and 14 percent to black entrepreneurs, up from 26percent in the previous charter.
The charter gave business a year in which to comply with the new 30 percent black ownership target. It also wants a shareholder selling a mining asset to give blackowned companies a preferential option to purchase.
Another sticking point is that the charter requires 70percent of procurement of mining goods and 80percent of procurement of services to come from empowerment entities.
However, the chamber,
which represents around 90percent of South Africa’s mining employers, refused to be part of the charter and voiced its disappointment, saying there had been no consultation in the process leading to the signing of the charter into law.
Mgojo said the chamber had achieved an average of 38 percent black ownership compared with the 26 percent set out in the previous charter.
Value transfer “The value of empowerment transactions since 2000 amounts to R205 billion in 2014 money terms. The value of meaningful value transfer between 2000 and 2014 amounts to R159bn. More than 50 percent of management positions are occupied by historically disadvantaged South Africans,” said Mgojo.
Chamber chief executive Roger Baxter complained of unachievable targets in the charter, saying the industry was being set to fail as targets had not been explained.
“It would be irresponsible for the industry to accede to a charter that does not have the interests of the industry at heart. For example, the charter has set out that shareholding of the mine community must be held in a trust created and managed by the Mining Transformation Development Agency. We already have a Mining Qualifications Authority, so why can we not fix that?” asked Baxter.
The chamber also snubbed a meeting where Zwane delivered the charter an hour ahead of the press conference, saying it would not be “co-opted” into the charter.