Zwane: Mining Charter targets should be even higher

Mineral Resources Minister Mosebenze Zwane has described the controversial third iteration of the Mining Charter as a tangible sign the government was serious about radical economic transformation and touched on beneficiation of the country’s minerals as a way of opening up the economy.

Feedback he’d received from a range of stakeholders indicated he was “on the right track” and that the ownership level should have been set at 50% or more to truly change the industry‚ Zwane said.

The charter has been suspended since it was gazetted on June 15 as the Chamber of Mines seeks to interdict it and then have the document judicially reviewed.

But Zwane stuck to his guns about the intentions of the charter and what it was intended to do in redressing the historical legacy of the industry. Zwane also confirmed clauses in the long-delayed amendments to the Mineral and Petroleum Resources Development Act placing obligations on the mining industry around beneficiation‚ a process to add value to the country’s raw minerals to create jobs and greater income from those minerals.

The chamber argues that the targets set out in the third charter are unrealistic and damaging to the industry‚ something Zwane refuted on Friday during a speech opening a Black Business Council summit in Johannesburg. “We believe they are realistic and achievable‚” Zwane said.

He outlined key points in the charter‚ including the increased black ownership levels of 30% from 26%‚ the 1% deduction off the revenue line to be paid to empowerment shareholders ahead of any other payment to shareholders‚ and the obligation that mining companies and financiers write off unpaid debts of black shareholders after 10 years. “It’s our firm belief that the 2017 Mining Charter gives practical expression to the meaning of radical economic transformation‚” Zwane said.

“It is a decisive and deliberate action by the government to reverse the sustained negative impact of apartheid policies on the people of SA.” Beneficiation was key to the government’s agenda for industrialisation‚ employment‚ skills development and entrepreneurship‚ he said.

“The government will consistently advance the beneficiation programme to ensure minerals become available at supportive prices to beneficiation projects in SA by utilising policy and legislative instruments‚” he said.

This is one of the key sticking points in the amendments of the act for the industry when it comes to the pricing of minerals for sale to domestic consumers‚ with the government demanding they be sold as cheaply as possible to give industry lower input costs.

The amendments‚ first drafted in 2012‚ were passed by parliament in March 2014‚ only to be returned by President Jacob Zuma in 2015 over concerns about whether they would pass constitutional muster.

The amendments include clauses that enable the minister to limit mineral exports if they are deemed useful to the local industry. The minister would be able to designate certain minerals as strategically important for the country and the minister would set developmental prices and percentages of output that could not be exported.

-BusinessLIVE