EVERY investor with whom South African mines minister, Mosebenzi Zwane, had met following the publication of the redrafted Mining Charter on June 15 had expressed a willingness to comply with the controversial document’s contents.
This was the view of the minister who, in addressing the Africa Down Under conference in Perth this week, said the Mining Charter ‘was law’. This is despite comments by the African National Congress at the party’s policy conference in July that the charter ought to undergo a further redesign.
Said Zwane today: “In recent months, I have met with several major investors, both foreign and local to unpack the details of the revised Mining Charter, and to listen to their operational and macroeconomic challenges.
“Out of these engagements, I can confidently report that all expressed their willingness to comply with the Revised Charter, and some have even willingly restructured their empowerment deals to reflect the new requirements. The 2017 Mining Charter is law, and all right-holders in South Africa are expected to implement it,” said Zwane.
The redraft of the Charter, however, is currently being held in abeyance whilst the Department of Mineral Resources (DMR) responds to an application by the Chamber of Mines in the High Court to interdict the document.
He also underplayed the market response to the Mining Charter redraft following its publication. According to the Chamber of Mines, the combined market capitalization of Johannesburg-listed mining companies declined by more than R50bn on the day, but Zwane said he had been “pleasantly surprised”.
“We were pleasantly surprised to see that some of the listed firms made gains, as opposed to what was expected by many. The mining industry is long-term by its nature, and all serious and genuine investors understand this dynamic. We should therefore not be swayed by cyclical ups and downs that occur in the short term,” he said.
Zwane also said it was a national goal for South Africa to complete amendments to the Minerals & Petroleum Resources Development Act (MPRDA) by December. It has been speculated, however, that amendments to the MPRDA as agreed prior to it stalling at the Presidency in 2015 may have since been updated.
This raises the concern that, as with the Mining Charter, amendments to the MPRDA might contain changes not agreed to with the Chamber of Mines which represents about 95% of the country’s mining sector.
Zwane said, in fact, that one of the sticking points that resulted in President Jacob Zuma declining to sign the MPRDA amendments into law was a need to “… ascertain that the provisions on beneficiation were in line with our international trade obligations”. Zwane said Parliament was “… seized with the matter”.
