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South Africa High Court ruling: Once empowered, always empowered

The High Court of South Africa (Gauteng Division) has issued a declaratory order which recognises the continuing consequences of previous BEE ownership transactions – or more simply put – agrees to and acknowledges a ‘once empowered, always empowered’ transaction.

This follows the court hearing that was heard on 9 and 10 November 2017.

In November 2017, the Chamber of Mines requested a declaratory order from the High Court confirming that past empowerment deals could be claimed by mining companies, even if those BEE parties had exited from the transactions, or if the transactions had failed.

The Chamber of Mines has argued from the outset that black economic empowerment (BEE) ownership transactions should be recognised for regulatory certainty purposes even where the BEE partner has sold or transferred part or all of its equity.

“The Chamber notes and accepts the High Court judgment. We are engaged in meaningful processes with other stakeholders, including the DMR, to shape and develop a new Mining Charter that all stakeholders can support and defend,” says Chamber of Mines President, Mxolisi Mgojo.

“This new Charter needs to help the mining sector to achieve stability, competitiveness, transformation and growth, and to ultimately enable the sector to realise its true economic and transformational potential.”

The High Court says in its judgement that once the empowerment targets had been met, the mining right holder “is not thereafter legally obliged to restore the percentage ownership… controlled by HDPs (historically disadvantaged person) or HDSAs (historically disadvantaged South Africans) to the 26% target referred to in the original charter and in the 2010 charter where such percentage falls below 26%”.