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BYPASS: Critics of the bill say it gives the minister of mineral resources too much power to change the mining charter without consulting Parliament. Pic: SOWETAN
BYPASS: Critics of the bill say it gives the minister of mineral resources too much power to change the mining charter without consulting Parliament. Pic: SOWETAN

The largest network of communities affected by mining in SA rejected the draft Broad-Based Socio-Economic Empowerment Charter for the Mining and Mineral Industry ahead of the two-day Mining Charter Summit held this past weekend, Business Day reported.

Community representatives were invited to the summit to express their collective outcomes.

Community representatives from several organisations had gathered in Johannesburg on July 2 to consider the draft Mining Charter as gazetted by Mineral Resources Minister Gwede Mantashe for public comment on June 15 2018.

Members of the public had 30 days from the date of publication of the draft Mining Charter to submit their comments. Mantashe has extended the period for public comment til the end of august to allow further engagements.

The publication of the draft Mining Charter is a culmination of the consultation process between the Department of Mineral Resources and mining industry stakeholders to revise the previous charter, which was published in June 2017 by then minister of mineral resources Mosebenzi Zwane. That charter is the subject of a judicial review application instituted by the Mineral Council of SA (formally known as the Chamber of Mines of SA).  

Following intervention by President Cyril Ramaphosa, the council agreed with the department to postpone the court application to allow the parties to engage each other and find an amicable solution.

In SA, the primary legislation that regulates mining is the Mineral and Petroleum Resources Development Act, 2002, which came into force on May 1 2004. It was enacted, among other reasons, to substantially and meaningfully expand opportunities for historically disadvantaged persons, including women and communities, to enter into and actively participate in the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources.

As concerns ownership and new mining rights, under the draft Mining Charter, the definition of the term "black person" has been amended.  The 2017 version of the Mining Charter included a clause that placed naturalised citizens in the group of people who should benefit from attempts to redistribute the country’s mineral wealth more evenly. This clause has been removed from the draft Mining Charter.

About the author: Godfrey Malesa, partner at Fasken. Pic: SUPPLIED
About the author: Godfrey Malesa, partner at Fasken. Pic: SUPPLIED

The ownership element under the draft Mining Charter for new mining rights is set at a minimum of 30% black economic empowerment (BEE) shareholding. The prescribed minimum 30% BEE shareholding target will apply for the duration of the mining right. The ownership element is ring-fenced and therefore requires 100% compliance at all times. The stipulated distribution of the 30% BEE shareholding is in contention.

The communities are calling for the charter to provide a clear outline for the management of community trusts; to pay more attention to environmental rehabilitation; and for the full economic empowerment portion to be awarded to workers and communities, and "not be used to benefit and enrich politically connected individuals".

To read the full report, visit the Fasken website.

This article was paid for by Fasken.

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