[miningmx.com] – IT’S fair to say that with almost a year’s service under his belt, South African mines minister, Ngoako Ramatlhodi, is full of surprises of which the latest is an announcement planned for midday tomorrow [March 31] in respect of
“… outcomes of Mining Charter compliance assessment”.
As reported by Miningmx on March 10, the report was due to be published at the end of March, but the surprising thing is that it’s actually going ahead. One lawyer said today he thought the announcement had been postponed for a month.
This must mean either the disputes between mining companies and the government in respect of certain definitions raised by the audit have been resolved or, more messily, Ramatlhodi is pressing ahead with the findings of the audit without industry support.
An industry source told Miningmx that the Chamber of Mines would consider legal action if certain empowerment deals are excluded from the audit’s reckoning; those where the empowerment company no longer exists, for instance.
This is the once-empowered, always empowered principle that the industry says must be honoured but which the government won’t recognise. It affects some important firms such as Harmony Gold which sold shares to Mzi Khumalo which he later encumbered and which became the property of bank.
Sibanye Gold is another which will claim empowerment points for its role – as its assets were once part of Gold Fields – in the creation of Mvelaphanda Resources which no longer exists.
There’s also the issue of BEE credits claimed through the creation of employee share option funds or ESOPs where the beneficiaries have either retired – and been paid out – or they have passed away.
The other surprise in all of this is that the Department of Mineral Resources (DMR) has pretty much kept to a deadline. One doesn’t want to be cruel but it would be somewhat uncharacteristic for the department as there are a number of companies waiting the good part of a year for Section 11 approvals.
Perhaps most important of all to come out of the audit announcement will be the clues Ramatlhodi provides in terms of his own head space, or attitude.
Ideally, one sees this as an opportunity to allow pragmatism to outshine dogmatics in the same way the DMR allowed for DRDGold to convert 26% of asset level BEE ownership into 10% top-level ownership of the company’s share. It allowed itself to be convinced by DRDGold’s economic argument rather than stick to numbers.
If Ramatlhodi takes a practical approach to the mining charter audit he will firstly avoid being tied up in backward-looking court contestations and then secondly, may even win the time and space to give forward-looking pointers on where BEE ought to be moving and how.