Chamber of Mines blasts charter as a ‘total disaster’
The third Mining Charter gazetted in June is an “unmitigated disaster” not just for the South African mining industry, but for the country and it is “incomprehensible” that the mineral resources minister thought he was legitimately exercising his powers, the Chamber of Mines says in its challenge to set aside the document.
Minister Mosebenzi Zwane has suspended the charter pending the outcome of a judicial review of the document by a full bench of judges in mid-December, but the industry is reeling from the consequences of the document, in which transformation targets were vastly changed from the first two versions of the charter.
Chamber leadership as well as ANC treasurer-general Zweli Mkhize said at a mining conference that both groups were in talks about the charter.
However, chamber CE Roger Baxter said the only talks the industry body would have with Zwane would be in court after two years of fruitless interaction with him and none of its input reflected in the new charter.
The chamber, the members of which produce 90% of SA’s mineral output, pointed out that ratings agency Moody’s had called the charter “credit negative” and that there was an investment freeze in the sector until the imbroglio over the document was settled and it was possibly renegotiated.
Publication of the charter on June 15 knocked R51bn off listed mining shares’ capitalisation on the day, but this has since been clawed back.
“The act of publication was and is harmful not only because of the content of the 2017 charter 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,” Tebello Chabana, the chamber’s executive overseeing public affairs and transformation, said in the affidavit.
Zwane overstepped his powers and assumed those of the finance minister in imposing a 1% levy on revenue of mining companies to pay to empowerment partners ahead of other shareholders and creditors, Chabana said.
Another problem area was Zwane’s changing of the term “historically disadvantaged South Africans or person” as outlined in the Mineral and Petroleum Resources Development Act to “black persons”, which included the controversial definition that included people who became citizens before or after April 27 1994. Zwane said this was done to bring the charter in line with the Broad-Based Black Economic Empowerment Act.
However, Chabana said: “That is no answer at all and is troubling insofar as it reveals the minister’s understanding of his powers. In short, the minister cannot replace the definition adopted by Parliament with one more to his liking.”
The chamber would argue that the third version of the charter was unconstitutional because it did not recognise the separation of powers and sought to “legislate through the back door”, while the Mineral and Petroleum Resources Development Act did not allow the minister to make the changes he did, so exceeding his powers under the act.
It will argue the charter violates the Promotion to Administrative Justice Act and is a policy document, not law.