Minerals Council ‘reluctantly’ files mining charter review given 180-day time bar

From Minerals Council South Africa:

The Minerals Council South Africa advises that it filed an application for the judicial review and setting aside of certain clauses of the 2018 Mining Charter published by the Minister of Mineral Resources on 27 September 2018.

A decision to pursue this action was very reluctantly taken by the Minerals Council Board. The Minerals Council has engaged in ongoing attempts to reach a compromise with the Minister on certain provisions that are problematic for the industry, and which would be detrimental to its sustainability. The Minerals Council has delayed bringing the application in the hope that those discussions would be successful but, given the peremptory 180-day time bar imposed by section 7(1) of the Promotion of Administrative Justice Act (PAJA), the Minerals Council was obliged to launch the review proceedings on 26 March 2019, despite the fact that the discussions are ongoing and may yet bear fruit.

Minerals Council CEO, Roger Baxter, notes that: “The Minerals Council and its members remain fully committed to transformation of the mining sector in South Africa, with the aim of achieving job creation, economic growth, competitiveness and social upliftment and development. A transformed, growing and competitive mining sector would be a significant catalyst for South Africa’s social and economic development and critical for the realisation of the ambitions of the National Development Plan.

“But these goals will only be realised through a minerals policy framework that conforms to the rule of law and principles of legality; and by administrative action which is lawful, reasonable and procedurally fair and consistent in all respects with provisions of the country’s legislation. The rule of law, regulatory certainty and the fair and even-handed administration of laws are of the utmost importance in sustaining the mining industry, and indeed the economy as a whole.

“This application is fully aligned with the Minerals Council’s previously stated view that most aspects of the Charter represent a reasonable and workable framework, but that the 2 provision that the charter does not fully recognise the continuing consequences of previous empowerment transactions, particularly in respect of mining right renewals and transfers of these rights, remains untenable. Not only does this provision in particular have a severely dampening effect on the attractiveness of mining in the eyes of investors, but it is also, in our view, a breach of the declaratory order on the matter issued by the North Gauteng High Court in April.

“The Minister has been kept fully apprised of the Minerals Council’s intentions. The Minerals Council continues to seek a solution to the current impasse that respects the outcome of the High Court judgment on continuing consequences, and provides a level playing field for companies in this regard.”


South African mining companies want parts of charter set aside

By Felix Njini

(Bloomberg) – South Africa mining companies are challenging some aspects of rules aimed at redistributing the country’s mineral wealth more broadly among its citizens, they say deter fresh investments in new mining projects.

The Minerals Council South Africa “reluctantly” filed an application for the judicial review and setting aside of certain clauses of the 2018 Mining Charter, the Johannesburg-based lobby group whose members include Anglo American Plc and Impala Platinum Holdings Ltd., said in an emailed statement Wednesday.

The charter does not fully recognise the continuing consequences of previous empowerment transactions, particularly in respect of mining-right renewals and transfers of these rights,” council Chief Executive Officer Roger Baxter said. “Not only does this provision in particular have a severely dampening effect on the attractiveness of mining in the eyes of investors, but it is also, in our view, a breach of the declaratory order on the matter issued by the North Gauteng High Court in April.”

The High Court in Pretoria on April 4 ruled that the first two versions of the country’s charter didn’t require producers to top up black-shareholding levels in perpetuity if they previously met the minimum 26% requirement.

Department of Mineral Resources Minister Gwede Mantashe finalised new mining rules for the sector last year in a bid to ease mining investors’ uncertainty. Among some of the rules are requirements for companies to give out 5% free-carry stakes in mining projects to communities and an additional 5% to employees.

The charter, first introduced in 2004, is aimed at distributing the benefits from mining more widely among South Africans to make up for racial discrimination during apartheid. The regulations became a point of increasing frustration for producers under Mantashe’s predecessor, Mosebenzi Zwane, whose own version drew furious resistance and legal challenges from the industry.