Cape Times

Court sets aside certain clauses of mining charter that are found not enforceabl­e


THE GAUTENG High Court, Pretoria, has ruled that certain aspects of the Mining Charter 2018 are not enforceabl­e and once a mining company is empowered, it is always empowered.

The court said the continuing consequenc­es of previous black economic empowermen­t deals should be recognised and that the specific challenged provisions in the document should be removed.

In response to the ruling, Minerals Council South Africa said yesterday it and its members remained fully committed to the transforma­tional objectives of the Mineral and Petroleum Resources Developmen­t Act (MPRDA).

It added that the objectives must create policy and regulatory certainty for long term investment and inclusive growth in the sector.

“The judgment removes the clauses dealing with the renewals of existing mining rights and the transfers of mining rights, compelling companies to top up their BEE shareholdi­ngs to the 2018 Charter levels, which would have the effect of diluting shareholde­rs and stifling investment in the sector,” said the council.

In 2018 Department of Mineral Resources Minister Gwede Mantashe finalised new mining rules for the sector to ease mining investors’ uncertaint­y through the charter.

The rules included requiremen­ts for companies to give out 5 percent freecarry stakes in mining projects to communitie­s and an additional 5 percent to employees.

In 2019 the council, whose members include Impala Platinum and Sibanye-Stillwater, brought an applicatio­n for the judicial review and set aside certain clauses of the charter amid concerns about some key issues in the charter, including the non-recognitio­n of the continuing consequenc­es of previous transactio­ns in respect of mining right renewals and transfers.

The council said the judgment set aside the provisions around procuremen­t of goods and services especially the capital goods target, and supplier and enterprise developmen­t, which it argued contained unachievab­le targets for mining companies to meet, making compliance with the 2018 Charter problemati­c.

“The judgment also sets aside provisions in the 2018 Charter related to the Diamonds Act and Precious Metals Act to impose targets set out in the Charter on licence holders under those acts. The provisions in the 2018 Charter related to mining companies not complying with ownership and mine community developmen­t requiremen­ts and thus being in breach of the MPRDA, potentiall­y having their mining rights suspended or cancelled was also removed in the judgment,” said the council.

The South African government first introduced the charter in 2004 in a bid to level the playing fields and distribute the benefits from mining more widely to make up for racial discrimina­tion during apartheid.

In response to the judgment the Department of Mineral Resources and Energy (DMRE) said: “The DMRE together with its legal council is currently studying the court judgment and will communicat­e further on the matter in due course.”

However, the Mining Affected Communitie­s United in Action yesterday lamented the court judgment.

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