Chamber of Mines: Want fair hearing, why is R205bn in BEE deals not enough?

By Andre Janse van Vuuren

(Bloomberg) — South Africa’s Chamber of Mines is optimistic that it will resolve a dispute with the government about the requirements for black shareholding in mining companies this year.

Mosebenzi Zwane, South Africa's Minister of Mineral Resources, speaks at a media briefing at the Investing in African Mining Inbaba in Cape Town, February 8, 2016. South Africa's government wants the black economic empowerment legal battle settled outside the courts, Zwane said on Monday, to end uncertainty over a policy meant to spread economic wealth to the black majority. REUTERS/Mike Hutchings
File photo: Mosebenzi Zwane, South Africa’s Minister of Mineral Resources. REUTERS/Mike Hutchings

The chamber, which represents the largest producers in the country, including Anglo American Plc and Glencore Plc, will on Tuesday argue in the High Court that the Mining Charter stipulates that companies should be credited with disposing a minimum of 26 percent of their assets to black investors even if those stakes were later resold. The Department of Mineral Resources says that companies should maintain black shareholding above the threshold at all times.

The chamber remains open to finding a mediated settlement with the government, Roger Baxter, the chief executive officer of the Johannesburg-based lobby group, told reporters in Johannesburg on Monday.

Once the parties receive feedback from the judge presiding over the case, they may continue talks “on the idea of third-party mediation,” Baxter said. “It is very feasible to see some outcomes this year. It is important to get some outcomes this year.”

South Africa’s push for increased black ownership of the mining industry, which accounts for almost half of the country’s exports, is part of an effort to address the legacy of apartheid that locked the black majority out of key industries. The Mining Charter also sets targets for companies to boost the numbers of black people in management and improve training and benefits for communities near mines.

The chamber’s members concluded deals worth R205 billion ($13 billion) since 2000 to expand black ownership, Baxter said. “We don’t think the industry has had a fair hearing on the progress that we have made,” he said.

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