The Minerals Council South Africa has said that it does not support various elements of the recently published draft Mining Charter, as it feels that the legislation does not promote competitiveness.
The Council recognises that the Mining Charter 2018 is a material improvement on that of 2017. However, it feels more work needs to be done to create a Charter that promotes competitiveness, investment, growth and transformation for the growth and prosperity of South Africa.
The new draft suggests, among other things, that holders of existing mining rights would need five years to increase BEE shareholding from the current 26% requirement to the new one of 30%.
In addition, rights holders who earlier achieved the 26% threshold would be considered compliant during that five-year period, and pending applications submitted before Friday would be assessed in light of the 26% requirement and also have five years to increase black shareholding to 30%.
The Council also says it supports a 30% black ownership target on new mining rights, with shares allocated for communities, organised labour and black entrepreneurs. However, it is against the free carried interest of 10 % allocated to labour and communities.
In a statement, the Council says: “Given South Africa’s mature mining sector, a 10% total free carried interest on new mining rights will materially undermine investment, by pushing up investment hurdle rates and ensuring that many potentially new projects become unviable.”
Stakeholders are expected to submit their written comment on all aspects of the Charter within the period of 30 days.
Department of Mineral Resources released the draft Mining Charter on Friday.