Mining Charter 3 may not see light of day in 2017

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A PRESENTATION by the Department of Mineral Resources (DMR) to the Portfolio Committee on Mineral Resources earlier this week in South Africa’s parliament suggested the department is not in a position to publish the mining charter.

It was anticipated that mines minister, Mosebenzi Zwane, might use his budget speech, scheduled for May 16, to unveil the third iteration of the mining charter.

Whilst making the presentation Zwane said finalisation of the mining charter – which has not been properly viewed by the Chamber of Mines – has been delayed by the intervention of stakeholders, including other government departments.

These departments include the Department of Trade and Industry which wants the mining charter changes to chime with its own code on broad-based black economic empowerment (B-BBEE Codes of Good Practice) as well as the National Treasury which requires oversight of any intentions to collect additional rents from the sector.

A major objection to the new charter is that the South African mining industry would face additional levies and taxes of R2bn to R3bn a year whilst R2bn already contributed by it for human resource development will be diverted into a new tax collection entity. It’s this that the National Treasury wants to examine.

The amendment B-BBEE code contains a ‘trump clause’ which is a provision that states the BBBEE Act trumped any law in force prior to commencement of the Act if conflict arose between the two.

An industry source said that even once other departments have had their say over the charter, its gazetting could run into complications as it’s the ANC’s National Policy Conference in June followed by the elective conference in December.

“If the ‘code route’ is selected, we could be looking at next year before the mining charter is made public similar to the delays with the MPRDA where at least one of the provinces in the National Council of Provinces has asked for an extension in the deadline for making its submission.

Amendments to the Minerals & Petroleum Resources Development Act have been in the works for over three years, a lack of progress that is highly frustrating to the Chamber. Its CEO, Roger Baxter, has said the promulgation of MPRDA amendments are essential to the smooth day-to-day running of the mining sector.

The Chamber of Mines will turn to the courts again should the DMR record the current draft of the mining charter in the government gazette. “While our preference is to engage on key issues with Government to achieve practical workable outcomes, as with any issue, the courts remain an option to the Chamber and its members,” said Roger Baxter, CEO of the Chamber of Mines in a February interview.

The DMR initially pencilled in end-March for the publication of the mining charter.

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