Mining charter: Finalisation in sight?
Despite the fact that the department of mineral resources and the mining sector have yet to reach agreement on several issues – including ownership and employment equity targets – government is adamant that the charter will be finalised in December.
agovernment declaration that it was “progressing” towards an outof-court settlement with South Africa’s mining sector on black economic empowerment (BEE) ownership targets as set down in the mining charter looks somewhat hopeful at this stage.
In a presentation to Parliament on 16 November, the department of mineral resources’ (DMR’s) deputy director-general, Mosa Mabuza, said his department and the Chamber of Mines were “progressing to finalise negotiations out of court” on the interpretation of once-empowered, always-empowered.
This is a principle that recognises certain BEE transactions in perpetuity even though they may have lapsed owing to difficult economic conditions, or where the black-owned partner entities have cashed in. The view of the DMR is that mining companies ought to re-empower themselves – an outlook that has raised questions about just how much of the pie foreign capital is to be allocated when it comes to financing new mining projects in South Africa.
The SA mining sector is prepared to press ahead with a declaratory order from the High Court on the principle. If the principle is recognised, it potentially tears the entire mining charter process asunder because the relative basis on which the redrafted charter is founded will be changed.
The Chamber of Mines calculates black ownership of mining companies, either in shares or units of production (as some transactions were done), to have been about 38% against the 26% target. The DMR estimates roughly about half of this has been achieved – a massive difference in interpretation.
Unperturbed, Mabuza went on to say that the charter would be finalised by December and that the department of trade and industry had therefore extended a moratorium on the DMR’s compliance with broad-based black economic empowerment (BBB-EE) until then.
If the DMR does gazette an updated mining charter by next month, it will be without the blessing of the Chamber of Mines, which views the negotiations to date as flawed. The last discussion on ownership targets took place in July and the agreements were verbal only. A meeting between the chamber and the DMR
The Chamber of Mines calculates black ownership of mining companies, either in shares or units of production (as some transactions were done), to have been about 38% against the 26% target.