Mantashe embarks on complex Mining Charter community talks

SA mines minister, Gwede Mantashe

SOUTH African mines minister, Gwede Mantashe, begins a nine province process of consultation with the communities regarding a re-write of the Mining Charter, starting with Emalahleni in Mpumalanga, the centre of the country’s coal industry.

Said the Department of Mineral Resources (DMR) in a statement on Thursday evening: “These consultations, which will take place in all nine provinces from April until the end of May 2018, are aimed at getting members of mining communities involved in making their inputs to the draft Mining Charter before it is finalised and gazetted”.

On the evidence of the reaction to Mantashe’s press conference on March 20, in which he said he would keep an open mind on negotiations, the community leg of redrafting the Mining Charter could be as difficult, if not more, than talks with the Chamber of Mines and union representatives – the other key stakeholders in the industry.

Community representatives at the press conference publicly harangued Mantashe. They said his promises of consultation rang empty

The first meeting also comes hard on the heels of a High Court decision on April 4 that mining companies were not required to top up their empowerment-related equity transfer provided they had once reached the 26% level as described in both the 2004 and 2010 versions of the Mining Charter.

This will almost certainly be viewed as a victory for business which is simultaneously detrimental to the credo of radical economic transformation that was the buzzword of former mines minister, Mosebenzi Zwane’s Mining Charter, published last year.

Asked about the implications of the High Court ruling, which was supported by two of the presiding judges, attorneys said today it had drawn an important line in the sand regarding the scope of future empowerment.

“The fact that there was a dissenting judgment may make it slightly easier to make out case for leave to appeal should the DMR seek leave to appeal, but this has no effect on the nature of the judgment,” said Sarah McKenzie, a partner at Webber Wentzel. “Of course, should there be any appeal, the appeal court would have the benefit of considering the main judgment and the views set out in the dissent.”

Asked if a unanimous decision would have been better, Peter Leon, partner at Herbert, Smith, Freehills replied: “It would have been better if it was, but it is not unusual for a court to split. Having said that there was a strong dissent by one of the judges which may encourage the DMR to appeal”.

JP Morgan Cazenove said in a report that there was still scope for uncertainty following the judgement. “It is … unclear to us at this stage whether the legal framework surrounding ‘once empowered, always empowered’ can be superceded by the new Mining Charter issued in 2017,” the bank said.

On the face of it, however, JP Morgan was positive, saying that “… today’s ruling establishes a positive legal precedent in favour of the Chamber of Mines and its stakeholders”.