Roger Baxter welcomes Mining Charter reprieve
There is much legal argument ahead as the charter is suspended pending the outcome of a court judgment
It might only be an agreement between legal teams on the modalities of court processes, but the suspension of the implementation of the new Mining Charter pending the outcome of a court judgment is "significant", Chamber of Mines CEO Roger Baxter said on Sunday.
The suspension gives mining companies a reprieve of at least three months before they may have to comply with the contentious provisions of the Mining Charter, which took effect when it was gazetted in June.
The suspension will last until judgment is handed down on the chamber’s urgent application for suspension pending a court application for the charter to be reviewed and set aside on both procedural and substantive grounds.
If the court rules in favour of the chamber, the suspension of the implementation of the charter could last many more months, if not several years.
The review application will be lodged in court as soon as possible after judgment is handed down in the chamber’s urgent interdict application.
The urgent application for suspension was due to be heard on Tuesday but the Department of Mineral Resources said it was not ready. The chamber’s legal team agreed to postpone the urgent application — probably until September — to give the department more time. In turn the department agreed to suspend implementation of the charter until the judgment.
Mineral Resources Minister Mosebenzi Zwane and the department gave a written undertaking on the suspension but the minister said in an ominous weekend statement that he had "noted the statements attributed to the Chamber of Mines in the media regarding the Mining Charter, and will provide his considered view on the matter at the appropriate time".
The chamber’s statement said Zwane had furthermore undertaken that "in the event of any breach of the above undertaking, the chamber can set the urgent interdict application down for hearing on 48 hours’ notice to the minister".
The deal was thrashed out by the legal teams and was not an outcome of the chamber’s meeting last week with Finance Minister Malusi Gigaba, who had warned his Cabinet colleagues about the negative effect of the charter on the shrinking economy. Mining and agriculture were the only growth sectors in the economy during the last quarter.
Baxter said the chamber believed a lot more needed to be done by the government to help the mining industry through its current crisis and that Gigaba’s recently announced 14-point plan to fix the economy should incorporate such measures.
The ANC at its recent policy conference also questioned the design of the charter and urged the government and industry to negotiate a new deal which should also deal with issues of transformation.
The charter has been heavily criticised for dealing a death blow to the industry. It requires mining companies to increase their black economic empowerment shareholding from 26% to 30% within the next 12 months, and to pay 1% of revenue derived from new mining rights to black economic empowerment (BEE) shareholders prior to any shareholder distribution.
The chamber’s application for a declaratory order in respect of the recognition of prior BEE transactions — the once empowered always empowered principle — will be heard on November 9. The chamber held back this application for two years pending finalisation of the new charter.