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SA mining licences can be revoked

Department of
Mineral Resources
director general
Sandile Nogxina
Pretoria, South Africa — MININGREVIEW.COM — 14 September 2010 – The South African government will revoke the mining licenses of companies that fail to meet the terms of the nation’s new Mining Charter, aimed at boosting the participation of black South Africans in the industry.

“The Mining Charter is a condition of the licence,” Department of Mineral Resources director general Sandile Nogxina told reporters here, where the government released a review of the rules. “A failure to comply could in some cases lead to the government revoking the licence,” he warned.

In 2004, South Africa passed laws compelling mining companies to sell 26% of their local assets to black South Africans by 2014 to help make up for discrimination during apartheid. The laws have been criticised for creating a small black business elite and doing too little to spread wealth in Africa’s biggest economy.

“Clothing the Mining Charter with the force of law may well not withstand constitutional scrutiny,” Peter Leon, a mining lawyer at Webber Wentzel in London, said in an e-mailed statement. “It may also add to regulatory uncertainty in the South African mining industry.”

“Transformation in the mining industry has been disappointingly slow, white men and women continue to dominate leadership positions, and many earn more than their black counterparts,” mineral resources minister Susan Shabangu said in Pretoria. “In the main, very little has been achieved in the transformation of the sector,” she added.

Under the terms of the reviewed Mining Charter, mining companies must employ 40% of black managers at various levels by 2014. They must also buy 40% of their capital goods and 70% of services from black-owned companies by the same year, according to the charter document.

“The review shows that the industry hasn’t made much progress dealing with its legacy issues,” said National Union of Mineworkers (NUM) president Senzeni Zokwana. “The government must force companies to abide by the charter,” he added in an interview.