Mining Charter court hearing on ‘once-empowered, always-empowered’ to start May 3

SOUTH Africa’s Mining Charter is in court again this week as producers and government face off over the issue of “continuing consequences”, also known as the “once-empowered, always-empowered principle”.

The Department of Mineral Resources & Energy (DMRE) gazetted a third iteration of the 2004 Mining Charter in 2018. Whilst most of its third Mining Charter’s contents met with industry agreement, there was disagreement on a requirement that a mining licence renewal or the transfer of a licence required a new empowerment transaction.

In terms of the Mining Charter III, the empowerment ownership threshold of a mining right has been retained at 26% except for new mining right applications in which case the target is 30%. These targets can be offset by other elements in the Mining Charter should as procurement.

The Minerals Council South Africa argued that previous empowerment efforts should be recognised (‘once-empowered, always-empowered’); but by making mineral right grants turn on fresh empowerment transactions, the DMRE was discouraging investment in the country’s minerals sector.

The court action – which is formally described as an application brought by the Minerals Council for the judicial review and setting aside of certain clauses of the 2018 Mining Charter – is scheduled for hearing from 3 to 6 May in the High Court (Gauteng division, Pretoria). It is being brought in terms of the Promotion of Administrative Justice Act.

The matter was previously heard on May 5, 2020 and judgment was handed down in respect of the non-joinder aspects in which the court ordered that a number of other parties be joined to the action. These include various community organisations, trade unions named by the court, and the SA Mining Development Association (SAMDA).

Commenting ahead of Monday’s hearing, Minerals Council CEO, Roger Baxter, said: “The Minerals Council and its members remain fully committed to transformation of the mining sector in South Africa, with the aim of achieving job creation, economic growth, competitiveness and social upliftment and development.

“But these goals will only be realised through a minerals policy framework that conforms to the rule of law and principles of legality; and by administrative action that is lawful, reasonable, procedurally fair and consistent in all respects with provisions of the country’s legislation”.

1 COMMENT

  1. How can government or a court not understand that once you have concluded a BEE deal, any further deal on a further sale simply erode value and eat into the interests of other shareholders. It’s a nice concept if there are investors out there who are stupid and don’t understand that on this basis eventually 99,9% of the entity would have been transferred into BEE hands I don’t know ANY investors dumb enough to go with this lack of logic!

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