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Cape Town – South Africa’s mining industry shouldn’t shy away from court processes, Chamber of Mines CEO Roger Baxter said on Monday at a press conference on the first day of the Mining Indaba 2017 held in Cape Town.
“In the United States litigation is a way of life. Sometimes you need courts to play that role,” Baxter said, referring to the consultative process with government regarding the reviewed mining charter.
The chamber's litigation process - through which it is trying to get a declaratory order about the ownership issue in the mining charter - is currently suspended as the chamber is in continued discussions with government, Baxter said.
In April last year, the Department of Mineral Resources (DMR) published a new version of the mining charter without consulting the Chamber of Mines and its member companies.
The chamber and the DMR clash over the "once empowered always empowered" principle. While the chamber wants government to uphold the mining industry’s BEE credentials of 26% black ownership irrespective of whether BEE partners sell their shares, the DMR wants the industry to empower perpetually if empowerment partners opt out.
Baxter said the DMR published its version of the charter in April without engaging the industry. “It’s our members who have to implement that charter. You can’t put legislation out without engaging the industry.”
According to Baxter, the Chamber of Mines had two “brief discussions” with the DMR on the reviewed mining charter until July last year. The consultation process resumed in January this year.
Section 54 stoppages
Asked to respond to Mineral Resources Minister Mosebenzi Zwane’s “tongue-lashing” of Sibanye, following the mining company’s intention to claim for losses from the DMR, Baxter said the chamber expects government to operate within the law.
“If not, the matter is going to end up in court. The inappropriate application of section 54 – where you close the entire mine where there’s a localised area - is not acceptable,” Baxter said.
The DMR issued Sibanye’s Kroondal platinum operations with a number of Section 54 closures, following an accident.
Industry outlook
Baxter said net investment in the mining industry is still subdued, mainly so that companies can “stay in business”.
“But the average net profits have shown improvement. We believe profitability comes first and then net investment will follow,” Baxter said.
