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Mining Charter compliance: Industry welcomes transformation

South Africa – Several South African mining houses have welcomed the Department of Mineral Resources’ (DMR) results on the industry’s compliance with the Mining Charter since it was first implemented in 2004.

The results were announced on Tuesday by South African Mineral Resources Minister Ngoako Ramatlhodi, at the DMR in Pretoria.

Most of the contention at yesterday’s meeting was with the ‘once empowered, always empowered principle of black economic empowerment (BEE) compliance of 26%. So much so that the DMR will be seeking a Supreme Court ruling on the matter.

DMR minister Ngoako Ramatlhodi (middle) at a conference held on Tuesday to discuss the Mining Charter interim results report
DMR minister Ngoako Ramatlhodi at a conference held on Tuesday to discuss the Mining Charter interim results report

Despite this sticking point, mining major Anglo American, which has been a longstanding and major contributor to the transformation of the mining industry, yesterday welcomed the statement by Ramatlhodi on the progress of transformation in the mining industry in South Africa.

Anglo American chief executive Mark Cutifani said: “We welcome the minister’s collaborative approach and are pleased that the DMR and the Chamber of Mines (CoM) have agreed to seek a declaratory order to resolve the difference of opinion relating to the ownership element of the Mining Charter. Anglo American supports any effort aimed at obtaining greater regulatory certainty for the mining industry in South Africa and its investor community.”

Anglo American will continue to engage with the government, the Chamber of Mines and other stakeholders to ensure that all parties work together to create a sustainable mining industry for South Africa.

Further, Anglo American’s Kumba Iron Ore business unit also welcomed the statement.

The company, which has exceeded all Mining Charter targets in the 2014 reporting year, including historically disadvantaged South African (HDSA) ownership requirements through Exxaro, the communities surrounding its operations and employees, will continue to strive for meaningful and sustainable transformation.

Kumba chief executive Norman Mbazima said that Kumba is proud of the work that has been done to bring the Mining Charter to life at Kumba, and while the Charter period of 10 years has come to an end, Kumba remains committed to continuing to bring about meaningful change with regards to transformation within its business, as well as the country.

Meanwhile, gold miner Sibanye Gold is also welcomes the collaborative approach adopted by the DMR and agrees with the consensus reached by the mining industry to approach the courts in order to achieve certainty on the principle of continuing consequences of BEE compliance, via a declaratory order.

Sibanye, who is confident that it exceeds the 26% requirement, reports having completed the DMR web-based Mining Charter template.

After initial calibration and rounding off, all of Sibanye’s operations have achieved top quartile scores for the three years up to and including 2014. Sibanye’s operations therefore fall into the “Excellent Performance” category as per the DMR’s electronic based scorecard.

Sibanye CEO Neal Froneman said that he pleased with what Sibanye has achieved and looks forward to further direct engagement with the DMR.

He further said that Sibanye has embraced transformation and will continue to contribute to the development and upliftment of its communities and employees.

Also supportive of the position adopted by the CoM, which acknowledges the DMR’s account of the mining industry’s success in achieving these targets and recognises the role of the mining industry as a driver of growth and development in South Africa, is Harmony Gold Mining Company.

Harmony notes the difference of opinion in how some BEE transactions are recognised and supports the “proactive” and “necessary” step in seeking  a ‘declaratory order’ from a South African court to ensure the correct interpretation of the rules governing the BEE component of the Charter.

Harmony CEO Graham Briggs believes the declaratory order will promote regulatory certainty for the mining industry.

He goes on to say that “as Harmony continues its journey to cement its future in South Africa, pro-actively participating in transforming the South African mining industry, we remain committed to identifying other opportunities to further facilitate HDSA ownership, transform our workforce, invest in developing South Africans and create opportunities for small business entrepreneurs”.

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.