SOUTH Africa’s Chamber of Mines responded to accusations by mines minister, Mosebenzi Zwane, that it was opposed to economic transformation, claiming the redrafted Mining Charter of June 15 served the narrow interests of a select few, principally by installing a fresh tax collection body over which there were no oversight mechanisms.
It also rebuffed a claim, set down in Zwane’s answering affidavit in the Pretoria High Court yesterday, that it had met with the Department of Mineral Resources (DMR) 17 times between April 2016 and March 2017 to discuss the Mining Charter. The Chamber said the meetings were mostly about a separate court matter.
In his answering affidavit, which was ordered by the High Court in response to a founding affidavit by the Chamber, the goal of which was to interdict Zwane’s proposal to suspend new prospecting and mining license applications, Zwane accused the Chamber of an anti-transformation agenda.
He added that the Mining Charter was never meant to set ‘aspirational’ or non-mandatory economic transformation goals, and that the discretion to change targets based on what had worked or not worked in black economic empowerment was enshrined in the Minerals & Petroleum Resources Development Act (MPRDA).
But the Chamber – as well as noting the “aggressive” tone of the answering affidavit – said the proposed creation of the Mining Transformation and Development Agency (MTDA) in the redrafted Mining Charter would hoover up billions of rands in new taxes from the mining sector for use that could not be ascertained.
“This agency has no governance in place and the irresistible conclusion is that its purpose is not to benefit transformation,” the Chamber said in a statement. “There is no transparency or, indeed, any indication as to who will ever have the opportunity to access these funds, and how the funds will be applied in a publicly accountable manner,” it said. “This is further an unconstitutional attempt to collect an additional tax.”
The Chamber said that when it met with the DMR in 2016 and 2017, it had discussed non-ownership aspects of the Mining Charter, but that the primary intention of every meeting – of which there were only two in 2016 – was to discuss a potential court case in the High Court aimed at winning legal certainty on the principle of ‘once empowered, always empowered’.
This principle – which is to recognise previous empowerment deals even if the empowerment partner had sold out of the structure or the structure had failed – had been a bone of contention between the Chamber of the DMR ever since the two sides differed on whether South Africa’s mining sector had reached the 26% ownership target set down in the 2004 Mining Charter. The redrafted Charter tacitly does not recognise some previous empowerment deals.
“The DMR’s Reviewed Charter will not serve the interests of South Africa.” the Chamber said. “It is aimed at benefitting a select few, will destroy investment, lead to further job losses and will cause irreparable damage to the mining industry.”