Mining charter won’t please all – Mantashe
The new mining charter represents a consensus among stakeholders in the industry‚ but will not make everyone happy‚ mineral resources minister Gwede Mantashe said on Thursday.
The mining charter is a crucial step to attracting further investment to a sector laid low by depressed prices, soaring costs and murky policy.
The highlights‚ as outlined by the minister‚ include a number of compromises related to the contentious aspect of ownership.
The charter was approved by the cabinet last week and provides some long-awaited policy certainty for potential investors.
Separately‚ the cabinet also approved a plan to withdraw the Mineral and Petroleum Resources Development Amendment Bill – widely welcomed by the mining industry.
An earlier draft version of the charter drew strong opposition from various parties and faced legal challenges from mining houses.
The charter‚ which was to be gazetted on Thursday‚ states that a holder of an existing mining right which has already achieved a minimum 26% black shareholding will be deemed compliant‚ even if the empowerment partner has since exited.
This is for the duration of the mining right‚ but not the life of the mine‚ Mantashe said.
“The recognition is not applicable upon renewal‚ and is not transferrable to a new owner in the case of a transfer or sale,” he said.
A new mining right must have a minimum 30% BEE shareholding.
Pending applications lodged and accepted prior to the new charter coming into effect‚ mining rights holders will have to increase their minimum empowerment shareholding to 30% within five years.
The 30% must comprise 20% ownership by a BEE entrepreneur‚ of which 5% must preferably be by women‚ with a 5% carried interest to employees.
Another minimum 5% carried interest must go to host communities but can now also take the form of an equity equivalent benefit.
Mantashe said the carried interest‚ referred to as a free carried interest in the previous draft of the charter‚ was not free but carried by the empowering partners and will be financed by the development of the asset over time.
The charter further outlines requirements for junior miners – those with an annual turnover of less than R150m.
Mantashe told journalists at a briefing on Thursday that the charter was a product of a collective effort to ensure the sector is transformed.
“It’s a product we can live with‚ [even if] it doesn’t make everybody or anybody happy.
“Regulatory and policy uncertainty is removed,” he said.
“We have a duty now to mobilise investment into mining.”
Mining operations in the world’s top platinum producer which also exports gold, coal, diamonds and iron ore are flashpoints of social and labour unrest amid perceptions that the wealth flowing from the shafts does not benefit local communities.
For example, between the start of 2016 and April 2018, the eastern limb of the platinum belt was hit by more than 400 incidents of social unrest affecting mining operations, data compiled by Anglo American Platinum shows.
The Minerals Council South Africa, which represents most of the country’s mining companies, said it would comment after it had studied the document. –
‘It’s a product we can live with‚ [even if] it doesn’t make everybody or anybody happy’ Gwede Mantashe
MINERAL RESOURCES MINISTER