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Zwane accuses Chamber of Mines of opposing transformation

Jun 27 2017 12:33
Matthew le Cordeur and Yolandi Groenewald

Cape Town – Mineral Resources Minister Mosebenzi Zwane on Tuesday accused the Chamber of Mines of opposing transformation in South Africa.

“It is our view that … those who are in opposition to the charter are in fact opposing the transformation objectives of government,” Zwane said in a statement. “We stand ready to defend the interests of South Africans in this regard.”

The Chamber of Mines, which represents 90% of mining companies in South Africa, on Monday applied for an urgent court interdict to stop the implementation of the Mining Charter, saying Zwane usurped Parliament’s powers by publishing the new law.

Zwane, who said he is confident government will win the case, last week launched the Mining Charter despite huge opposition.

The charter stipulates that local mines should be at least 30% black-owned, up from the previous requirement of 26%. Also, mines should give 1% of their turnover to empowering communities.

Markets reacted negatively towards the charter and investors became jittery. Nevertheless, Zwane has vowed the push it through.

On Tuesday, Zwane said: “As with any legislation that is developed, it is virtually impossible to please all parties.

“It is unfortunate that the Chamber of Mines has chosen to take this route, but their decision is respected, and the democracy we fought for allows all of us to exercise our rights in this manner.

"We have confidence in the court's ability to act with diligence on this matter.”

Why chamber is challenging Mining Charter

It its application, the chamber argued that the charter undermines the very transformation objectives it set out to address.

“The vast and systemic damage which the publication and threatened enforcement of the 2017 charter has and continues to inflict upon the financial and reputational interests of not only the chamber’s members, their employees and investors, but also the country as a whole, requires urgent redress,”  stated the chamber documents.

It said the redress could only be fixed in the short term by an urgent interdict.

"In due course, this court will be asked to set aside the 2017 charter as an unlawful exercise of power,” the chamber said. “ But in the interim, and in order to avoid further harm and hopefully restore a degree of confidence not only in the mining industry as an investment opportunity but also in this country’s institutions, urgent relief is necessary.”

The chamber also argued that the charter in its current form will “destroy the very industry whose survival is necessary to give effect to the objects of the Mineral and Petroleum Resources Development Act".

It also labelled the new laws confusing.

The charter is so contradictory in its core provisions "that not only are the mining companies who are supposedly obliged to comply with it perplexed as to what they are required to do, but legal experts themselves are confused and find themselves unable to provide clear advice to their mining and investment clients as to the meaning and effect of it,” the chamber argued.

The charter represents a most egregious case of regulatory overreach, the chamber concluded.

“The act of publication was and is harmful not only because of the content, and the vague and contradictory language employed to convey that content, but also because of the clear threat to the separation of powers which that act presents," it argued.

READ: GAZETTE: Read the full Mining Charter

A recap of the Mining Charter: 

The ANC sought an urgent meeting with Zwane last Thursday. ANC spokesperson Zizi Kodwa told News24 that the ruling party’s economic transformation committee had raised a number of concerns about the new charter – specifically about the impact the raised level of black ownership to 30% could have on jobs in the sector.   

The bloodbath resumed on the JSE following Zwane's announcement of stringent new laws in the mining sector on Thursday.

The Chamber of Mines said it will serve an interdict on the minerals department to force it to immediately suspend the implementation of the charter. It will also take the charter on review.

veteran black mining executive told City Press that the Department of Mineral Resources may have willfully plunged itself into months, or possibly years, of lawfare “because by doing so, they think they will be seen to be doing radical economic transformation”.     

The new Mining Charter contains a number of flaws that are not in accordance with legislation, said mining lawyer Peter Leon of Herbert Smith Freehills.

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