Mining service providers in doubt over onerous charter provisions
Tough requirements set for rights holders to procure goods and services from suppliers to the industry, write Morne van der Merwe, Govan Manuel and Tanya Seitz
The Mining Charter has met widespread controversy. Much of the criticism has been on the amendments to the charter that are intended to increase the compliance thresholds for ownership; management and control of the holders of mining and prospecting rights; and the "once empowered, always empowered" principle. In its current form, the charter is also likely to significantly affect the downstream market, particularly mining-sector service providers. The charter sets onerous requirements for holders to procure goods and services from mining industry suppliers. While suppliers are not required to comply with the charter, the procurement targets for rights holders indirectly require them to meet such targets to remain competitive. The 2010 Mining Charter required holders to procure 70% of their mining services procurement spend from BEE entities — of which 25% plus one vote of its share capital was held by historically disadvantaged South Africans, as measured in accordance with the flo...
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