No closure agenda:

THE Department of Mineral Resources is not on “a rampage” to terminate mining rights for legal noncompliance but does plan to invoke harsher penalties before taking the final step of withdrawing licences, according to deputy director-general Mosa Mabuza.

He was briefing the portfolio committee on mineral resources yesterday on the extent of industry compliance with the mining charter. The briefing took place in the light of the department’s shock decision to suspend Glencore’s Optimum mine licence ostensibly because of the company’s failure to comply with the law governing retrenchments.

Mr Mabuza said the maximum fine for noncompliance with the Mineral and Petroleum Resources Development Act would be raised from R500,000 to 10% of annual revenue under the amended act.

“The idea is to strengthen the deterrent. We are aligning the sanctions with the system used by the Competition Commission.”

If a company continued to transgress, the department would take away its licence, he said.

The first step in urging compliance is a departmental directive, to which companies are entitled to respond with representations.

More than 400 directives had been issued to firms that had failed to submit reports on transformation targets, said Mr Mabuza.

These were generally junior miners as large companies “have embraced transformation”, he said. Of the 962 mining companies that were supposed to submit reports, 442 had done so, but these covered 95% of mining employees.

Mr Mabuza said an urgent priority was to align the mining charter with the new black empowerment codes and scorecard, passed in 2013, which gave the codes precedence over sector charters.

“The current charter is obsolete. The most critical issue is how quickly we can amend it.”

He offered little clarity on what this might mean for ownership targets. “We are having that conversation with the industry,” he said.