Chamber of Mines questions mining charter definitions

The SA Chamber of Mines has questioned why Minister of Mineral Resources Mosebenzi Zwane changed definitions in the mining charter from previously disadvantaged groups to blacks‚ widening the scope of those who could benefit from the document.

On Monday‚ the chamber applied to the North Gauteng High Court to stop the implementation of the reviewed Mining Charter which was published by Zwane on June 15.

In its founding affidavit‚ the chamber questions why Zwane changed the words “previously disadvantaged groups” to “black persons”.

“He has replaced the definition of historically disadvantaged person in section 1 of the MPRDA (Mineral and Petroleum Resources Development Act) and the term historically disadvantaged South Africans in section 100(2)(a)…with his own definition of black persons.

“The definition of black person impermissibly widens the scope of those who may benefit from the provisions of the charter to include not only persons or communities disadvantaged by unfair discrimination before the Constitution took effect‚ but also Africans‚ Coloureds and Indians who became citizens of the Republic of South Africa by naturalisation on or after April 27 1994 and who would have been entitled to acquire citizenship by naturalisation prior to the that date.

“In other words‚ for reasons best known to himself‚ the minister‚ through the publication of the 2017 charter‚ now seeks to benefit a category of person who were never disadvantaged by unfair discrimination before the Constitution took effect‚” the chamber argued.

Another example of what the chamber described as “gross regulatory overreach” is what the charter says on the foreign controlled and registered companies supplying the South African mining and minerals industry with mining goods and services.

“In this regard the 2017 Charter provides that foreign companies must contribute a minimum of 1% of their turnover generated from local mining companies towards the Mining Transformation and Development Agency. In imposing turnover tax‚ the minister has not only purported to exercise extra-territorial jurisdiction – which is clearly beyond his powers - he has also attempted to usurp the powers of the minister of finance‚” the chamber argued.

Zwane has purported to exercise powers which reside exclusively with Parliament‚ it said.

The reviewed Mining Charter received a lot of criticism from the sector and even the ruling party was not pleased with it.

In the revised Charter‚ the black ownership target was upped from 26% to 30% - a requirement mining companies will need to comply with within a 12-month period.

Finance Minister Malusi Gigaba also remarked on the negative market reaction. Gigaba said although the new charter was a "welcome step" there have been "consequences". He then urged Zwane to engage with the Chamber of Mines and unions to address concerns.

The chamber further argued that the charter is “so confusing and confused‚ and so contradictory in its core provisions‚ that not only are the mining companies who are supposedly obliged to comply with the 2017 Charter perplexed as to what they are required to do‚ but legal experts themselves are confused and find themselves unable to provide clear advice to their mining and investment clients as to the meaning and effect of the 2017 Charter”.