The revised Mining Charter was eventually released after more than a year since amendments were first announced.
The Chamber of Mines, which was invited to a meeting with the Department of Mineral Resources and minister Zwane an hour prior to the official release of the new Mining Charter, chose not to attend in light of the fact that government has not consulted with the necessary stakeholders on the final outcomes.
Speaking at the release Zwane stated: “The mining industry has been the bedrock of the South African economy for over 100 years. The sector has made many positive contributions to the development of our economy, and some of the infrastructure and industries thriving today are as a direct resulting of mining.
“We cannot deny, however, that there have been some undesirable effects, brought on by decades of colonialism and apartheid. Unemployment, inequality and poverty have been growing over the years, creating an untenable situation.
“We are not blind to the current global economic climate. It requires government to be more resilient in addressing the ever-growing economic challenges posed by a variety of political and economic factors.
“This Mining Charter is a key instrument for radical change, designed to address many of the inequalities in the mining and minerals sector prior to 2002. Section 100 of the Mineral and Petroleum Resources Development Act (MPRDA) tasks the minister to establish, assess and where necessary, revise the framework and targets for the entry and ongoing participation of historically disadvantaged South Africans into the sector. This is a task that cannot be taken lightly.
The new Mining Charter now requires a minimum 30% BEE shareholding for all mining rights which more specifically entails:
- 8% employees
- 8% mine communities
- 14% black entrepreneurs
It now also requires a minimum 50% +1 black person shareholding for all new prospecting rights; which must including voting rights and all right-holders will have to pay 1% of their annual turnover to the 30% BEE stakeholders prior to any distributions to its shareholders.
A holder who claims a historical BEE transaction (26% prior to 2017 charter) must top up to 30% within 12 months – this applies even where the black shareholding is no longer 26% due to either a BEE partner exiting or the contract with the BEE partner lapsing or the transfer of shares by the BEE partner to non-BEE persons.
A holder who has maintained 26% black person shareholding is required to top up its black person shareholding to 30% within 12 months of the 2017 charter coming into effect.
- Board level: 50% black, 25% to be women
- Executive/top management: 50% black, 25% to be black women
- Senior management: 60% black, 30% women
- Middle management: 75% black, 38% women
- Junior management: 88% black, 44% women
In terms of procurement, 70% of all mining goods will need to be sourced from BEE entities and 80% of all services sourced from BEE entities.
Further to this, 100% of mineral samples need to be analysed by South Africa-based firms.
For this not located in-country (foreign suppliers), 1% of annual turnover will need to be paid to the mining transformation and development agency.
A maximum offsetting of 11% against BEE shareholding must meet the following criteria:
- A company must have been invested in beneficiation since 2004;
- The beneficiation must be in line with the definition of beneficiation contained within the MPRDA;
- The DMR must approve such beneficiation;
- The 11% offsetting will not apply to beneficiation that started after 2004 but has since ceased or that has been terminated; and
- The 11% offsetting can only be claimed if the beneficiation is on-going.
Housing and living conditions
Principles as set out in the housing and living conditions standards for the mining and minerals industry developed in terms of the MPRDA includes:
- Decent standards of housing;
- Centrality of home ownership;
- Provision for social, physical and economic integrated human settlements;
- Involvement of employees in the housing administrative system;
- Affordable, equitable and sustainable health systems; and
- Proper nutrition requirements and standards.
Human resource development
A 5% investment of the leviable amount on skills development has been apportioned as follows:
- 2% on essential skills development activities such as artisanal training, bursaries, literacy and numeracy skills for employees and non-employees (community members);
- 1% towards South Africans historically black academic institutions; and
- 2% towards the mining transformation and development agency.
Feature image credit: Lonmin