Miners on edge over BEE rule

28 May 2017 - 02:03 By LUTHO MTONGANA

Ahead of the mining charter being gazetted in a few weeks, it emerged this week that the new charter would set BEE ownership at 30% - up from 26% in previous charters.

The cabinet on Wednesday approved the publication of the final broad-based black economic empowerment charter for the mining industry, which is said to have laid down the targets for ownership and employment equity.

Chamber of Mines spokesperson Charmane Russell said on Friday that the chamber could not comment on the speculation that black ownership had been set at 30% as it had not seen the charter.

However, she added that there had been a lack of clarity since the most recent charter was gazetted and that the organisation would "have no option but to pursue the matter" if the next charter was also unclear, and it disagreed with stipulations on BEE ownership.

She hoped the industry's extensive and constructive comments had been incorporated, Russell said.

Bloomberg reported on Thursday that the latest charter would have a 30% BEE ownership rule, up from the 26% ownership level.

Whether the 30% revision meant the "once empowered, always empowered" rule - which the Chamber of Mines had advocated for - was scrapped to retain black shareholders was still unclear.

Last week, speaking after his budget vote speech in parliament, Mineral Resources Minister Mosebenzi Zwane said about 85% to 90% of the latest revised charter had been agreed upon by stakeholders. The "once empowered, always empowered" rule, he said, was a genuine cry by the industry and it had been taken into account.

A draft mining charter gazetted last year shocked the industry by scrapping the "once empowered, always empowered" rule. The Department of Mineral Resources stipulated in the draft that all miners should have a 26% BEE shareholding, whether or not black investors sold their stakes.

Ajay Lalu, managing director at Blacklite Consulting, said the 30% rulewould not shock the market: "The 'once empowered, always empowered' rule ... should not exist in my opinion."

Nedbank corporate and investment banker Paul Miller said the 30% ownership level did not limit uncertainty. Peter Major, Cadiz Corporate Solutions analyst, said South Africa was at a stage where mining charter changes almost did not matter anymore as they would not add investment or jobs.

"If government really cared about creating jobs in mining, they would be going around to all the mining companies and ask, 'What do I have to do that will allow and assist you to create more jobs?'"