New charter may stop feud
AFTER a battle between the mining industry and the department of mineral resources, the release on Friday of the revised mining charter could lay to rest a long-running feud and provide the signal for much-needed policy certainty that investors and rating agencies have been calling for.
The release of the revised third mining charter draft by minister of mineral resources Gwede Mantashe includes the once empowered, always empowered principle, which was scrapped by Mantashe’s predecessor, Mosebenzi Zwane, crippling the relationship between the industry and government.
The new mining charter states that a mining company that has a black economic empowerment deal and achieved a 26% BEE shareholding but whose BEE partner has since exited the transaction, “shall be recognised as compliant and must within a period of five years from the date of coming into operation of the mining charter, 2018, supplement their BEE shareholding from 26% to a minimum of 30%”.
Mining companies sought an urgent court interdict against the department when it scrapped the once empowered, always empowered principle.
The chamber wanted to get clarity from the courts on whether mining companies could be recognised for their previous BEE deals or whether they would have to continuously top up their 26% ownership levels when BEE shareholders sold their stakes.
The high court in Gauteng ruled in favour of mining companies. However, the department appealed the decision, arguing that each company’s BEE deal should be weighed on its own merits.
Although some of these contentious points have been scrapped in the latest version of the charter, Mantashe does include that mining companies should pay a minimum dividend of 1% to employee and community empowerment partners from the sixth year of a mining right until dividends are paid by the companies.