South Africa’s Department of Mineral Resources (DMR) and Chamber of Mines (CoM) have agreed to resolve the interpretative impasse on what constitutes the 26% black economic empowerment (BEE) in the Mining Charter outside of court.

Advocate Sam Muofhe, special adviser to Mineral Resources Minister Ngoako Ramatlhodi said in a statement on Wednesday that the matter, due to be heard in the High Court, would be attended to differently as the parties are weary of the unintended consequences of hearing the dispute in court.

Muofe said that “adversarial litigation often has the unintended consequences of damaging relations,” and that the DMR and CoM will, “without prejudice, begin with the process of engaging with each other, the sole objective of which will be to explore possibilities of resolving our differences of interpretation of the Mining Charter Assessment Results outside of the High Court process.”

“We are alive as litigants who work together in the Mining Industry Growth and Development and Employment Task Team (MIGDETT),” he said.

At the last MIGDETT meeting held on 31 March 2015, Ramatlhodi announced that the parties had agreed to jointly approach the courts for a declaratory order to clear up differences of interpretation on the ownership element of the Mining Charter as the MIGDETT stakeholders were not of the same mind on the principles applicable to assessing the ownership element under the “once empowered, always empowered” principle.

The DMR’s understanding of the ownership element indicates that empowerment transactions concluded after 2004 where the BEE ownership level has fallen due to BEE disposal of assets or for other reasons, should not be included in the calculation of progress made, while the CoM on the other hand believes that previous deals should be included in the ownership calculation, as it represents meaningful economic participation by historically disadvantaged South African (HDSA) beneficiaries since before 2002.

Meanwhile, the industry believes the Mining Charter does not require of mining companies to maintain a 26% HDSA ownership once it has been achieved.

Anglo American CEO Mark Cutifani, and past president of the CoM, has also been quoted as saying that he did not believe taking the matter to court was the best way of resolving differences.

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