The North Gauteng High Court has ruled in favour of the South African Chamber of Mines on the issue of bench-marking black empowerment deals under the new Mining Charter.
The Court has ruled that a company does not have to lose its empowerment credentials once it has no longer have 26% black ownership.
The provisional revised Mining Charter empowerment stipulates that a company loses its empowerment rating once black shareholders sold off their shares. Effectively, this means a company has to look for new black shareholders.
The following was the court’s landmark verdict, “Once a mining right had been granted, with the department satisfied the company had met the obligations to secure such a right the holder thereof is not thereafter legally obliged to restore the percentage ownership … controlled by historically disadvantaged persons or historically disadvantaged South Africans to the 26% referred to in the original charter and in the 2010 charter where such a percentage falls below 26%.”
The ruling is to stand, unless the obligation had been spelled out in the mining right. The same ruling applies to companies that had converted old-order rights to new-order rights in terms of the Mineral and Petroleum Resources Development Act, which transferred all mineral ownership from private hands to the custody of the state in 2002.
An important part of the ruling is that mining companies cannot be penalised for failing to meet the requirements of either of the charters.
If the Department of Mineral Resources does not appeal against the ruling, it is highly likely the chamber and its members will agree to the 30% empowerment level set in the suspended third version of the charter, which is one percentage point higher than that agreed ahead of the release of the charter in June 2017 by former minister, Mosebenzi Zwane.
Reacting to the development in a press statement, chamber president, Mxolisi Mgojo, commented, “The Chamber notes and accepts the high court judgment. The chamber is engaged in meaningful processes with other stakeholders, including [the department] to shape and develop a new Mining Charter that all stakeholders can support and defend.”
The talks under the new mines minister and former trade unionist, Gwede Mantashe, are underway.
The Chamber of Mines and like-minded bodies argue that the Department should consider the current sluggish state of the Industry, with gold and platinum mines affected the most.