SIBANYE-Stillwater had fallen foul of the South African government’s empowerment legislation and was not compliant, said Gwede Mantashe, the country’s mines and energy minister.
Speaking at the Junior Indaba, an online mining conference, Mantashe said that Sibanye-Stillwater had “stolen” the empowerment points awarded to Gold Fields from having completed an empowerment transaction in 2009. This was the deal in which Gold Fields sold a 15% stake in its South African gold mines to Mvelaphanda Resources, then owned by Tokyo Sexwale, a black industrialist.
Gold Fields subsequently de-merged its South African gold mines to form Sibanye Gold, the forerunner of the gold and platinum group metals producer, Sibanye-Stillwater. Mantashe said Sibanye-Stillwater had been “reckless” in claiming the empowerment from the transaction.
James Wellsted, spokesman for Sibanye-Stillwater, said the matter appeared to have come up because his company had applied to the Department of Mineral Resources and Energy for a new order mining right for its Beatrix mine, one of the former Gold Fields operations. “We have taken legal advice, we are quite sure of our position,” he said. Beatrix had about six to eight years left of mining provided the mining right was granted.
Wellsted argued that Gold Fields had placed its mines into a subsidiary company through which the transaction with Mvelaphanda Resources had been conducted. The empowerment, therefore, resides within the subsidiary company which is the basis for Sibanye-Stillwater’s gold assets.
Nonetheless, the emergence of the dispute demonstrates that the South African government’s decision in August last year to drop a Supreme Court appeal in respect of the principle of ‘once-empowered, always-empowered’ may be a false dawn.
At the time, the Minerals Council South Africa said the decision to drop the appeal – in which Government contended mining firms had to re-empower themselves in the event of a new mining right licence renewal – was evidence of reform.
Attorneys at the time, however, warned that Government had dropped the court appeal only as it related to the 2010 Mining Charter, and in order to contest it in terms of the 2018 iteration of the charter.
Said Mantashe today: “There must be recognition of the creation of black capitalists, but if there is no meaning we will go the full distance,” he said, referring to potential further court action. “We think Sibanye has been reckless in handling a serious issue,” said Mantashe. “That 15% shareholding is abnormal. We are ready to speak to them.”