SOUTH African mines minister, Mosebenzi Zwane, is to embark on provincial roadshows in the next two weeks in order to “take the [Mining] Charter to the people” despite widespread dissatisfaction with its contents, even from within his own party, the African National Congress (ANC).
“The 2017 Mining Charter which has just been gazetted is meant to be a catalyst that provides practical expression to our goal of a more inclusive economy,” said Zwane in his budget vote speech to the National Council of Provinces (NCOP), the upper house of South Africa’s Parliament.
“We encourage the young people who are the future of this country to embrace the Mining Charter by exploiting the opportunities to be unleashed by this Instrument of Change,” he said. “We will be embarking on provincial roadshows in the next two weeks to raise awareness and to take the Charter to the people.”
A third redraft of the Mining Charter, which was published on June 15, shook investors who, along with the Chamber of Mines, were surprised by a revenue tax on owners of new mining licences whilst other parts of the document confirmed the industry’s worst fears regarding procurement and employment targets, and an increase in the ownership target.
The coup de grâce was an apparent refusal to recognise empowerment deals where the counterparties had sold their shares, or the empowerment structure had collapsed, or where the mining company did not have a direct line to empowerment.
The ANC’s economic transformation committee also voiced its disapproval of the Mining Charter. It is understood that some senior members in the ANC were as surprised by the Chamber of Mines by the Mining Charter. A meeting between senior ANC representatives and the Chamber of Mines was convened on June 20.
In his speech, Zwane also thanked the provinces for the work they had done in “strengthening” the Minerals & Petroleum Resources Development Act (MPRDA) through a number of proposed amendments.
According to speculation, however, the MPRDA is being subject to the same ad hoc alterations as those which informed some critical changes in the Mining Charter.
Not everything is moving to plan though. Peter Leon, Global Co-Chair at Herbert Smith Freehills, an attorney, said this week that the parliamentary legal adviser had told the NCOP select committee, which is hearing the MPRDA amendments, that it had been following the wrong procedure.
“So according to the legal adviser – and I agree with her – the bill is going to have to go back to hearings of the provinces and this has been going on since 2015, so that’s really been very protracted,” said Leon in an interview with Business Day TV.
One the important amendments in the MPRDA is thought to be to give the force of law to the Mining Charter. Currently the Mining Charter is policy whilst the MPRDA is law; in addition, it does not allow for changes to the made to the Mining Charter such as those gazetted last week.
Zwane said the Department of Mineral Resources had been allocated a budget of R1.78bn of which over R900m of this would be transferred to its entities who were responsible for work in research and development, skills development and beneficiation.
