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Mantashe expects 'frank dialogue' as Mining Charter summit starts

Jul 07 2018 13:41
Sibongile Khumalo

Mining groups, advocacy bodies, unions, and government representatives gathered in Boksburg on Saturday for a summit called to discuss the new Mining Charter which seeks to change to face of the sector.

Minister of Mineral Resources Gwede Mantashe said he expected a "frank dialogue" at the two-day summit, especially around issues of empowerment.

While the latest version of the Charter does not have the same "once empowered, always empowered" approach as previous versions, Mantashe said mining companies cannot be allowed to push out their BEE partners. 

“If a big company elbows out a black company, that company cannot remain empowered. BEE is about creating black capitalists, …it’s a program to create black business people,” he said.

The "once empowered, always empowered" clause allowed mining companies to continue to be recognised as BEE compliant, even if a black partner exited the empowerment deal.

 “The issue of once empowered always empowered has always been the issue. I'm certain that it will be an issue here,” said Mantashe in his opening address.

Change is painful

In April, the North Gauteng High Court ruled in favour of the principle of "once empowered, always empowered" after the Department if Mineral Resourced challenged the provision.

Mantashe said certain aspects of the clause were against the spirit of transformation. “We must appreciate that we are dealing with transformation which entails change, and change is painful,” he added.

In the revised Charter, Broad-Based Black Economic Empowerment (B-BBEE) objectives and conditions remain part of mining license rights. 

Mining rights have 30 years secured for the holder and a target 30% transformation ownership remains from the previous charter.

“Employers must be prepared to commit to the 5 % free carry stake for mining communities and workers. In our view that is not too much,” said Mantashe.

“We placed the requirement because we believe that there must be value accruing to community and the workers immediately.”

The Charter, which was gazetted in June, stipulates that a minimum of 70% of total mining goods must be procured from local firms, with 21% sourced from goods manufactured by black entrepreneurs.

The mining sector, which is represented by the Minerals Council of South Africa (formerly known as the Chamber of Mines) has expressed reservations about the charter.

The group’s president, Mxolisi Mgojo, called the current draft policy an “improvement on the 2017 charter” – stating that there was still a lot work to be done to ensure policy certainty.

“We have a lot of potential, but the industry is struggling," he said, adding the Minerals Council supports the ownership target of 30%.

Mgojo stressed that empowerment must not be done at the expense of much needed investment in the country.

The summit comes after country-wide public consultations initiated by the department of mineral resources.

Government has maintained that the charter will address the economic imbalances of the past and open the industry to black participation.

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