Mines, state on col­li­sion course

Cham­ber con­fi­dent it has strong case against char­ter

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

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 8per­cent 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.

PHOTO: REUTERS

Min­eral Re­sources Min­is­ter Mosebenzi Zwane

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