BEE audit plunges mining sector into uncertainty
In S e p t e mb e r 2 0 0 3 , the Competition Tribunal intervened i n a dispute bet ween Kumba Resources and t he Industrial Development Corporation ( IDC), which had objected to Anglo American raising its stake in Kumba to 49%. The IDC argued that such a move by Anglo would not serve empowerment.
As it t urned out, t he t r i bunal sanctioned Anglo’s move in a ruling that was widely welcomed because it proved government could listen to business as well as regulate the business environment; in this case, in matters that had a bearing on black economic empowerment (BEE).
Today, however, there’s concern that government’s view on BEE is less friendly after a template was issued to mining companies guiding the sector on how the department of mineral resources ( DMR) intended to audit BEE compliance.
The t emplate appears to have adopted the somewhat narrow view that empowerment could only have taken place once there was a law to promulgate it: that is, the Mineral and Petroleum Resources Development Act (MPRDA) on 1 May 2004.
History shows, however, those seven months before MPRDA promulgation, gover nment was a l r e a dy t a c i t l y acknowledging BEE by ruling against the IDC that it might be imperilled.
To date, the Chamber of Mines has steadfastly refused to comment on the audit template, while the DMR is yet to respond to Finweek questions about the extent of possible disagreement on what the template says. It would appear, however, that even if the mining sector and government reach an agreement on BEE – which they surely must – the road ahead in regulatory matters is likely to remain unpredictable.
All we have to go on, regarding the current industry reaction to the template, is Anglo American CEO Mark Cutifani’s forthright statements on 13 February t hat i n fai l i ng to recognise BEE before a certain date, the DMR was acting “crazily” and that it would render the charter compliance process, the audit, “a ridiculous exercise”.
Much is at stake as there’s a number