Chamber in the dark over delay in Mining Charter

Cape Town – The Chamber of Mines said it has no insight into what is causing the delay in the publication of a revised Mining Charter, which was due at the end of March 2017.

However, Chamber of Mines CEO Roger Baxter added that the body prefers the Department of Mineral Resources (DMR) to rather fully consider the submissions and inputs stakeholders have made; before implementing regulations that are unworkable and not achievable. 

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Mines Minister Mosebenzi Zwane said during the 2017 Mining Indaba that the reviewed Charter will be published by the end of March this year.  But in a statement issued on Friday March 31, the DMR offered no explanation for a delay in publishing a final, updated Mining Charter, except to say that it was “in the process of being finalised”. 

Responding to Fin24’s questions by email on the delayed publication, Baxter said the Chamber is concerned about the process followed by DMR in developing the draft reviewed Charter. 

The Department gazetted the reviewed Charter in April 2016 for public comment, but the contents thereof were criticised by the Chamber, mining analysts and mining companies alike for its onerous ownership and procurement targets, among other things. 

“Unlike previous mining charters where stakeholders in the Mining Industry Growth and Development Task Team (Migdett) worked together to produce a stakeholder-agreed proposal, the DMR elected from the outset not to follow this process and chose to publish its own draft in April 2016.” 

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Baxter said the DMR also didn’t engage with stakeholders (collectively within Migdett) after the gazetting of the Charter last year. 

“That said, the Chamber has met with the DMR for discussion on several occasions on the ownership provisions of the Charter, and has made representations on the remaining elements of the Charter,” Baxter said. 

“In all of these meetings the Chamber raised specific areas of concern, but has not yet been given any indications that the Chamber’s key concerns have been taken into account. Given that the mining companies are the actual implementers of the Charter, it will be difficult to accede to an outcome based on a flawed process or consideration of the substantive issues that the industry is concerned about.” 

Future steps 

In the event that the soon-to-be-published Charter ends in an impasse between the DMR and the Chamber – specifically with regard to the “once empowered, always empowered matter” – Baxter said there are two separate elements that need to be considered. 

“On the matter of ownership, the Chamber has applied to the high court for a declaratory order in respect of of continuing consequences of ownership targets set in the Mining Charter.” 

In the Charter that was gazetted last year, the 26% black ownership per mining right was affirmed, which effectively means the DMR requires mining companies to have a perpetual 26% black ownership even if the original empowerment company disposes of its shares. 

The Chamber of Mines has maintained once it has met the empowerment criteria mining companies should be exempted from further empowerment obligations.

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According to Baxter, the Chamber has not yet applied to the deputy president of the high court to set down this application - which would effectively provide a court date - pending discussions with the DMR. 

“Remember, this was originally intended as a joint application by the DMR and the Chamber of Mines in the interests of seeking clarity.  Should the Chamber’s efforts in engaging with the DMR on this matter prove to be unsuccessful, the Chamber could seek a court date,” Baxter said. 

On the non-ownership elements of the Charter, the Chamber and its members will consider further steps once it sees the content of the next draft of the Charter.