New Mining Charter requirements to require absolute compliance – Mantashe
Minister Gwede Mantashe says the charter will end the regulatory and political uncertainty that has shrunk investment in the sector.
CAPE TOWN - Mineral Resources Minister Gwede Mantashe says the new Mining Charter’s requirements for ownership and mine community development are ring-fenced and will require “absolute compliance at all times”.
He unpacked details of the charter at a briefing in Pretoria on Thursday, describing it as a consensus document arrived at after seven months of talks with key players in the sector, including labour and communities.
Mantashe says it will end the regulatory and political uncertainty that has shrunk investment in the sector.
The minister says the new charter’s ownership provisions will entrench regulatory certainty for investors and offer the security of tenure for investments.
He says a mining right holder who’s achieved the minimum of 26% black empowerment ownership will be seen as compliant for the duration of the right, including those whose BEE partners have since exited.
Mantashe stressed this recognition will be granted only for the duration of the right and not the life of the mine.
Mantashe says this recognition won’t apply on renewal and won’t be transferable to a new owner.
He has given details on how the new Mining Charter aims to ensure mine workers, their communities and black entrepreneurs share in the benefits.
The 2010 Mining Charter will apply until the new one comes into effect.
At that point, new mining rights granted must have a minimum 30% black empowerment shareholding, which will apply for the duration of the right.
He says this 30% will be distributed among mine employees (5%), communities (5%) and black entrepreneurs who’ll qualify for a minimum 20% effective ownership through shares, 5% of which must preferably be for women.
Mantashe said: “It (the 30%) will be distributed as follows: a minimum 5% non-transferable carried interest to qualifying employees; a minimum non-transferable carried interest to host communities, or a minimum 5% equity equivalent (of the issued shared capital), at no cost to the trust or similar vehicle set up for the benefit of host communities.”
He adds they’ve provided an alternative on the distribution to host communities because they’re still grappling with finding a way for mining communities to exercise their ownership rights - but don’t want any delays in the meantime.
Carried rights mean the mine’s owners carry the costs.
The charter ends years of uncertainty for investors and friction between the government and the sector caused by former Minister Mosebenzi Zwane’s much-contested version.
The 2018 Mining Charter is set to be gazetted on Thursday and will also be published on the Department of Mineral Resource's website.
At the same time, trade union Solidarity has welcomed the new Mining Charter, saying it’s a huge improvement on the draft version promoted by Zwane.
Solidarity's general secretary Gideon du Plessis said: “We’re very pleased that at least there are regulatory steps around the charter but also it’s a well-balanced document and much-improved than the previous Zwane version. We’re very pleased with the content and the outcome.”
(Edited by Winnie Theletsane)