BEE gap goes to court

01 April 2015 - 02:55 By TJ Strydom

Mineral Resources Minister Ngoako Ramatlhodi wants the courts to decide whether "once empowered" means "always empowered". Reporting on the progress of South Africa's mining industry in implementing the mining charter, Ramatlhodi said yesterday; "We are dealing with two interpretations of what was meant in 2004."The sector was then set a target of 26% black ownership by 2014.Though several companies achieved this by helping to finance BEE deals, many of the beneficiaries have since sold their shares, leaving the companies with less than the required proportion of black shareholders.In other cases mergers and acquisitions lessened the entities' empowerment credentials.Mining companies do not want to dilute shareholder value again to chase empowerment targets that have already been reached."Previous deals should be included in the ownership calculation, as it represents meaningful economic participation by historically disadvantaged beneficiaries since before 2002," said the Chamber of Mines yesterday.The industry believes the charter does not require of mining companies to maintain a 26% ownership by historically disadvantaged South Africans once it had been met, according to the chamber.The department is now approaching the high court for a declaratory order.The chamber said it supports the court application and "will be guided by it".But, said Ramatlhodi, if the court found the "once empowered" ruling meant firms should re-finance the 26%, "then that is the law and my job is to implement it".The department's interim report on compliance with the charter was not only about ownership, but also looked at the success of mineral rights holders in reaching targets in different categories.It showed that nearly 75% of mineral rights holders reached their target of 40% black representation at board level.Half reached this target for senior management and more than half for junior management.Compliance was less impressive in terms of human resource development and sustainable development."From these statistics it is clear that there is still some way to go before we can truly transform the industry and fully realise the objectives set out in the charter and the Minerals and Petroleum Resources Development Act," said the minister.The chamber maintained that mining companies had made significant strides in all the categories required by the charter."The extent of change is profound and irreversible," it said...

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