Enoch Godongwana, the ANC's subcommittee chairperson on economic transformation. Picture: MOELETSI MABE
Enoch Godongwana, the ANC's subcommittee chairperson on economic transformation. Picture: MOELETSI MABE

The Mining Charter, which the industry has slammed as impractical, making the sector uninvestable, has been suspended pending judgment on an urgent court interdict.

However, the delay in implementing the charter might offer the industry and Mineral Resources Minister Mosebenzi Zwane an opportunity to reach a compromise.

ANC head of economic transformation Enoch Godongwana said on Friday there had to be "trade-offs" and "compromises" between all stakeholders before the revised Mining Charter could be implemented.

"The difficulty we have is that, if they are going to spend most of their time in court, the charter is not going to be implemented. But if they could achieve consensus there would be a speedy resolution and implementation of the charter," Godongwana said.

The ANC's economic transformation committee had proposed to the department, even before Zwane was appointed as minister, that the matter should not be left to the courts for technical interpretation, he said.

Trade-offs would be a sign that the department and the chamber were working to reach common ground, Godongwana said.

"Our view has always been that all the stakeholders must achieve as much consensus as possible."

One of the key amendments to the charter is the revised black shareholding requirement, from 26% to 30%.

The ANC has expressed concern about the charter, although Godongwana said the economic transformation committee had not put pressure on Zwane to halt implementation.

"Not at all, we [the ANC] did not put pressure on him [Zwane]. We did have an engagement and we also had a short discussion at the policy conference. Delegates commented on details but more on the ownership provisions than anything else," Godongwana said.

Peter Leon, co-chair and partner at Herbert Smith Freehills, said the "Mining Charter was not endorsed by the policy conference".

"The only person who endorsed it was Zwane. I think he has been a little isolated by all of this," Leon said.

The Chamber of Mines said on Friday it had reached an agreement with the minister's legal team that the provisions of the reviewed charter would not be applied until the matter was heard in the High Court in Pretoria. The chamber agreed that the case, which was due to be heard on Tuesday, could be heard in September instead to give the Department of Mineral Resources more time to prepare its answering affidavit to the interdict application.

Since the release of the Mining Charter, the mining industry and other stakeholders have been outspoken about the damage the charter would inflict on the industry. Its release sparked a massive sell-off in JSE mining stocks, wiping R51-billion off their combined market capitalisation, but share prices have since partially recovered.

A week after the release of the charter on June 15, the Chamber of Mines applied for an urgent court interdict to stop the charter from being implemented because it made mining in South Africa uninvestable and would contribute to major job losses.

Ajay Lalu, managing director at Blacklite Consulting, said the suspension of the charter was a surprise given the government's statements around radical economic transformation at the ANC policy conference, as well as the statements made by Zwane in which he was adamant the charter would remain unchanged. He hoped the agreement over the suspension was a step towards new engagements between the parties, Lalu said.

"We must not underestimate the factors that weigh in on government decisions and the relative importance of the sector in the current economic conditions," he said.

Duma Gqubule, director for the Centre of Economic Development and Transformation, said there was still time for all parties to resolve the matter outside the courts. "I believe it's a policy issue, not a legal one, and the government has shown an amazing lack of decisiveness on the matter," he said.

"The main issue is that the charter has many flaws. We can't get away from that. I do think these issues can be solved before the court case. I think the issues are not as insurmountable as people make them out to be."

Leon said this was the Chamber of Mines winning round one. It was a limited success, though, because all it showed was that the department was unable to file its answering affidavit in time.

"It's a bit of a blow to the department and Zwane, but a short-term blow because he said the charter was going to be in effect immediately. He has had to concede and give the chamber what they wanted, which is not to implement the charter immediately."

Leon added that although the delay put the department on the back foot, one would have to wait for the court case to be more definitive about the implications.

In terms of the agreement, if the minister breaches the decision to suspend the charter, the chamber can set an urgent interdict application down for hearing on 48 hours' notice to the minister. The deputy judge president has been asked to set a high court date for the matter to be heard in September.

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