The Department of Mineral Resources on Friday blindsided the mining industry‚ releasing a revised mining charter that demands a perpetual minimum 26% black ownership per mining right.
The revised charter that amends the original 2002 charter‚ which came into effect in 2004‚ and the charter amended in 2010‚ was released on Friday. This is despite the Chamber of Mines and the department being engaged in a court process to seek a declaratory order around the issue of once-empowered always-empowered‚ with the industry arguing it should not be compelled to continually replace empowerment deals that have ended.
The department argues mining companies should always have 26% black ownership.
The 2016 revised charter‚ which is open for public comment‚ stipulated that “all existing mining right holders must align black economic empowerment (BEE) transaction(s) concluded prior to the coming into operation of the amended mining charter 2010 with the reviewed mining charter 2016”.
“Where a BEE partner or partners have exited‚ BEE contract has lapsed or the previous BEE partner has transferred shares to a non-BEE company‚ the mining right holder must within the three years transitional period from the date of publication of the charter review its empowerment credentials consistent with the amended 2016 mining charter‚” it said.
“All targets stipulated in the mining charter shall be applicable throughout the life of mine‚ unless the specific element specifies otherwise. Ownership‚ housing and living conditions and human resource development elements are ring-fenced which require 100% compliance at all times‚” the revised charter said.
A senior industry source said there had been no consultation with the mining sector on these revisions. The revision would overtake the chamber’s application and render it moot‚ said a lawyer who declined to be named.
“The only offsetting permissible under the ownership element is against the value of beneficiation‚ as provided for by section 26 of the MPRDA (Mineral and Petroleum Resources Development Act) and elaborated in the mineral beneficiation framework‚” the revised charter said.
Up to 11 percentage points of the 26% could be offset against beneficiation.
The revisions would bring the charter in line with Broad-based Black Economic Empowerment Act of 2003 and the Department of Trade and Industry’s Codes of Good Practice.
The revised charter stipulated the 26% stake be “equitably distributed” among workers‚ black entrepreneurs and communities‚ with each holding a minimum 5% stake.
Worker and community shares had to be held by trusts‚ which would have to include members of unions and traditional authorities‚ respectively.
These trusts and other ownership structures would be incorporated in a special purpose vehicle that would have rules to govern how the vehicle was run‚ with dispute resolution mechanisms put in place.
Mining companies could consolidate the various empowerment structures it had over each mineral right with the written consent of the minister.
Mining companies would have to contribute at least 1% of annual turnover every year towards developments in local communities and labour sending areas.
The charter increased the level of capital goods procurement from BEE-compliant companies to 60% from 40%. It said 30 percentage points of the 60% “must preferably be given to small business development” with 10 percentage points of the 30% earmarked for “enterprise development.” For consumables‚ the requirement was set at 70% up from 50% and at 80% for services up from 70%.
Mining companies are obliged to use domestic facilities for assaying mineral samples. “A mining right holder may not conduct sample analyses using foreign based facilities without the prior written consent of the minister‚” it said.
The deadline for comments on the draft reviewed mining charter is May 31.
- TMG Digital/Business Day
Department blindsides mining firms with new black empowerment charter
The Department of Mineral Resources on Friday blindsided the mining industry‚ releasing a revised mining charter that demands a perpetual minimum 26% black ownership per mining right.
The revised charter that amends the original 2002 charter‚ which came into effect in 2004‚ and the charter amended in 2010‚ was released on Friday. This is despite the Chamber of Mines and the department being engaged in a court process to seek a declaratory order around the issue of once-empowered always-empowered‚ with the industry arguing it should not be compelled to continually replace empowerment deals that have ended.
The department argues mining companies should always have 26% black ownership.
The 2016 revised charter‚ which is open for public comment‚ stipulated that “all existing mining right holders must align black economic empowerment (BEE) transaction(s) concluded prior to the coming into operation of the amended mining charter 2010 with the reviewed mining charter 2016”.
“Where a BEE partner or partners have exited‚ BEE contract has lapsed or the previous BEE partner has transferred shares to a non-BEE company‚ the mining right holder must within the three years transitional period from the date of publication of the charter review its empowerment credentials consistent with the amended 2016 mining charter‚” it said.
“All targets stipulated in the mining charter shall be applicable throughout the life of mine‚ unless the specific element specifies otherwise. Ownership‚ housing and living conditions and human resource development elements are ring-fenced which require 100% compliance at all times‚” the revised charter said.
A senior industry source said there had been no consultation with the mining sector on these revisions. The revision would overtake the chamber’s application and render it moot‚ said a lawyer who declined to be named.
“The only offsetting permissible under the ownership element is against the value of beneficiation‚ as provided for by section 26 of the MPRDA (Mineral and Petroleum Resources Development Act) and elaborated in the mineral beneficiation framework‚” the revised charter said.
Up to 11 percentage points of the 26% could be offset against beneficiation.
The revisions would bring the charter in line with Broad-based Black Economic Empowerment Act of 2003 and the Department of Trade and Industry’s Codes of Good Practice.
The revised charter stipulated the 26% stake be “equitably distributed” among workers‚ black entrepreneurs and communities‚ with each holding a minimum 5% stake.
Worker and community shares had to be held by trusts‚ which would have to include members of unions and traditional authorities‚ respectively.
These trusts and other ownership structures would be incorporated in a special purpose vehicle that would have rules to govern how the vehicle was run‚ with dispute resolution mechanisms put in place.
Mining companies could consolidate the various empowerment structures it had over each mineral right with the written consent of the minister.
Mining companies would have to contribute at least 1% of annual turnover every year towards developments in local communities and labour sending areas.
The charter increased the level of capital goods procurement from BEE-compliant companies to 60% from 40%. It said 30 percentage points of the 60% “must preferably be given to small business development” with 10 percentage points of the 30% earmarked for “enterprise development.” For consumables‚ the requirement was set at 70% up from 50% and at 80% for services up from 70%.
Mining companies are obliged to use domestic facilities for assaying mineral samples. “A mining right holder may not conduct sample analyses using foreign based facilities without the prior written consent of the minister‚” it said.
The deadline for comments on the draft reviewed mining charter is May 31.
- TMG Digital/Business Day
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