Mining houses put on back foot
Surprise Mining Charter draft changes a blow to industry
THE unexpected and unilateral draft changes to the Mining Charter by Mineral Resources Minister Mosebenzi Zwane has put the embattled industry on the back foot ahead of negotiations on empowerment.
Gazetted on Friday‚ the revised charter came exactly a month after the start of a court case by the Chamber of Mines‚ seeking a declaratory order on the “once-empowered‚ always-empowered” clause in the version of the Mining Charter finalised in 2010.
The interpretation of the contentious clause has been bogged down in dispute between the Department of Mineral Resources and the chamber.
The department is insistent that mining companies must retain 26% black ownership no matter the reason for it falling below that target‚ and the revised charter leaves no doubt about that. But the sector argues that past deals must be recognised towards the ownership target.
“All targets stipulated in the mining charter shall be applicable throughout the life of the mine‚ unless the specific element specifies otherwise.
“Ownership‚ housing and living conditions and human resource development elements are ringfenced‚ which require 100% compliance at all times‚” says the revised draft‚ which is open for public comment until the end of next month.
Bruce Dickinson from Webber Wentzel said there could be unintended consequences from the strict demands for continued empowerment and the new stipulation that every mining right must be 26%-owned by black entrepreneurs‚ communities and employees in special purpose vehicles.
Mining companies would lock in empowerment shareholders for the life of the assets to avoid the need to find and fund fresh partners‚ severely limiting wealth creation and distribution‚ he said.
For instance‚ Royal Bafokeng Holdings sold part of its stake in Impala Platinum for about R2-billion‚ which it said it would use to diversify its already large investment portfolio built with proceeds from its relationship with the platinum miner.
The revised charter also puts in place new and higher targets for black managers at all levels‚ and in the procurement of goods and services from black economic empowerment compliant companies.
It has replaced the term “historically disadvantaged South Africans”‚ which included white women‚ with “black people”.
A range of industry players spoke of their surprise at the lack of consultation‚ which had been a feature during the drafting of the first and second version of the charter in 2002 and 2010.
“This is clearly a government draft we only saw on Friday. It is not a tripartite draft that included industry and labour.
“It will be used as the basis of negotiations and consultations on whatever the revised charter will finally look like‚” chamber CEO Roger Baxter said.
The chamber believes the declaratory order it was seeking from the courts would shape the finalised draft.
It declined to comment on the relationship between the chamber and the department. — BDlive