THE Minerals Council of South Africa scored a critical victory today after the High Court ruled the Mining Charter was an instrument of policy and that mines and energy minister Gwede Mantashe was not entitled to make law through it.
In practice, the judgement – delivered by Judge Fayeeza Kathree-Setlioane – sustained the notion of the ‘once empowered, always empowered’ principle in which past empowerment deals are recognised.
The matter was brought to court following the publication of 2018 Mining Charter, the charter’s third iteration since 2004, in which the Department of Minerals and Energy (DMRE) sought to impose a new clause requiring a fresh empowerment transaction in the event of an application for a mining licence renewal or transfer of an existing right.
The so-called Mining Charter III increased the ownership target of such empowerment deals to 30% from the previous 26% target and gave five years’ notice to companies that had not achieved 26% ownership yet to complete their transactions at the 30% level.
The Mining Charter also called for a free carry of 5% in those ownership targets for relevant mining communities and employees.
In her judgement, Judge Kathree-Setlioane took direction from the wording of the Minerals and Petroleum Resources Development Act (MPRDA), the centrepiece legislation promulgated in 2002.
“I conclude that section 100(2) of the MPRDA does not empower the Minister to make law,” said Judge Kathree-Setlioane. “In other words, the 2018 Charter is not binding subordinate legislation but an instrument of policy. This interpretation is not inconsistent with the objects of the MPRDA.”
“The ruling confirms that the Minerals Council has been successful in its application to review and set aside those provisions of Mining Charter III, as it is known, which it has challenged through its judicial review application,” a market source told Miningmx.
“We are studying the judgment and will give our response in due course,” said Allan Seccombe, spokesman for the Minerals Council.
Costs were awarded against the DMRE.