THE South African government was reluctant to reshape the Mining Charter following weekend talks between the country’s mining sector and mines minister, Gwede Mantashe. The meeting represented the opening chapter of negotiations that are only likely to conclude in the second half of the year.
“It’s very disappointing that the government has missed a golden opportunity to reset the relationship between the department [of Mineral Resources] and industry, said James Lorimer, a member of the parliamentary portfolio committee on mineral resources in an article published by BusinessLive today.
“There was a hope that the government had realised the trouble the industry is in and would lighten its grip,” he said. The publication cited other anonymous sources saying that the meeting was a disappointment from an industry perspective because Mantashe favoured tweaks to the Mining Charter rather than an overhaul of black economic empowerment. The Chamber of Mines declined to comment. The Department of Mineral Resources did not respond to questions.
However, a media briefing with Mantashe has been arranged for 10am on Tuesday (March 20) in which the Mining Charter negotiations will be discussed as well as Mantashe’s plans for the Department of Mineral Resources in general. Miningmx will be tweeting and writing from the event in Pretoria.
The Association of Mineworkers & Construction Union (AMCU) was also absent from the meeting. BusinessLive said that the union, which is led by Joseph Mathunjwa, was not invited to attend. AMCU is a fierce rival to the National Union of Mineworkers (NUM), the organisation through which Mantashe developed his political career.
Mantashe, a former chairman of the South African Communist Party, and currently national chairman of the African National Congress (ANC), was a trade unionist with the NUM for 24 years having co-founded the organisation with Cyril Ramaphosa who was appointed president of South Africa last month.
His relationship with Mathunjwa is poor. It was Mantashe who insisted Mathunjwa face disciplinary proceedings for an illegal sit in that saw Mathunwa leave the NUM and form AMCU. There were precious few details regarding the substance of the meeting.
The hope among the industry is that a new Mining Charter support fundamental and inviolable rights which the document under former mines minister, Mosebenzi Zwane’s authorship, did not achieve.
A new Mining Charter should “… be clear, concise and unambiguous … contain realistic and achievable timeframes for the implementation of any new requirement … [and] … in relation to existing mining rights, fully recognise historic empowerment transactions for the duration of such rights,” said Peter Leon, an attorney for Herbert Smith Freehills.
“Security of tenure is of paramount importance to mining companies and investors given the capital intensive nature of mining and the long lead times between exploration and production,” said Leon.
Zwane’s version of the Mining Charter, published in June 2017, was described by the Chamber of Mines as “egregious”. Some of its provisions allowed for the payment of black economic empowerment companies before other shareholders and the formation of a new tax collection entity. It also demanded an increase in the sale of shares in mining companies to 30% of their total to BEE entities, whilst companies deemed not to have met the current 26% target were required to entirely re-empower themselves.