THE South African government’s Department of Mineral Resources (DMR) took the opportunity of a quiet December period to gazette the ‘Guideline Regulations’ to Mining Charter 3 following a two-month process which involved consultations with stakeholders, including the Minerals Council of South Africa.
The aim of the regulations is to inject a cold shower of clarity to the Charter. On balance, the Charter was recognised as being a fairer document that the draft version written under former mines minister, Mosebenzi Zwane’s watch. But critics said it still lacked clarity, especially on one particular issue: whether black economic empowerment (BEE) was required in the event of applying for a prospecting licence.
In October, mines minister Gwede Mantashe declared: “Why should we put a target on prospecting? You are looking. Once you discover [something] the BEE requirement must kick in”. This sounded even-handed, but then the Charter just omits to mention prospecting licences at all.
Described by one Miningmx reader as: “60 pages of murky text and obscure formulae”, the implementation guidelines again make no mention of prospecting applications which, in the interpretation of MalanScholes attorney, Hulme Scholes, hands discretion over BEE in prospecting licences squarely back to the minister. It is he who can apply certain clauses in the Minerals & Petroleum Resources Development Act (MPRDA).
For instance, in terms of 4A of the MPRDA: “If the application relates to land occupied by a community, the minister may impose such conditions as are necessary to promote the rights and interests of the community, including conditions requiring the participation of the community”.
Said Scholes: “Meaning that the DMR [Department of Mineral Resources] can ask for Charter compliance in application for a Prospecting Right even though Charter 3 does not itself refer to the Prospecting Right applications”.
It would be a shame for the Mining Charter to be so indecisive on something so important. South Africa’s mining industry has been ex-growth for a number of years. It needs new investment.
More ironies then that the document that is supposed to usher in a fresh period of investment in a sector so fundamental to South Africa’s well-being achieves exactly the opposite effect.