The victory claimed by the Chamber of Mines this week, when the High Court in Gauteng upheld its interpretation of the "once empowered, always empowered" principle, may be a hollow one as there is still uncertainty over how this will be applied in the mining sector.
Analysts are also divided as to whether the ruling will be a blow to transformation.
On Wednesday the court held, in a declaratory order, that mining companies could claim recognition for previous black economic empowerment transactions that had helped them reach the industry's 26% ownership threshold, even if empowerment partners had subsequently sold out.
The Department of Mineral Resources had argued that companies were to perpetually top up empowerment shareholdings that had fallen below 26% for the duration of the mining right.
But two judges of the three who deliberated on the case disagreed, saying that companies could not be penalised for falling below the threshold unless the empowerment threshold was specified in the terms and conditions of its mining right.
Soria Hay, Bravura's head of corporate finance, said most mining rights granted by the department included the stipulation that the right holder must remain 26% black.
"This High Court victory may therefore be a hollow one for most mining companies ... This development may even lead to greater uncertainty in the medium to long term."
Many mining companies would therefore lose out on the ruling's benefits, which applies to historic BEE deals. The ruling will not necessarily affect future transactions as the department is expected to continue making empowerment a condition attached to mining rights. The department could also push for a change in legislation.
The minority judgment in favour of the department's submissions had laid the foundation if it chose to appeal, said Ntsiki Adonisi-Kgame, mining director at ENSAfrica.
But analysts said Mining Minister Gwede Mantashe should rather put his energy into mending fences with the industry.
Mantashe said in an interview with Business Day TV on Friday that the ruling helped inform talks around the third iteration of the Mining Charter and that he was confident the charter would be finalised by June. "We are engaging positively with industry and communities ... the tone [of engagement] is quite warm among the partners," he said.
In terms of this week's ruling, where companies' mining rights do not stipulate the requirement to maintain a 26% empowerment shareholding, some of the progress made in South Africa's transformation project will be undone.
The ruling means that some BEE deals, which flopped due to a poor commodities cycle, share price underperformance and other factors beyond the control of black investors, will not have to be revisited.
Ajay Lalu, MD at BEE consultancy Black Lite, said: "The mining industry would argue it has transformed and implemented the 26% rule and that where black people could not afford to acquire part of the 26% shareholding in mining companies these companies had even loaned them the money. But they charged such high interest the company effectively remained the owner of the share."
Lalu said if the industry had fundamentally transformed by transferring 26% of its market capitalisation in 1994 to black investors, South Africa would have "far more black people walking around with obscene amounts of wealth. Can you imagine how many more Patrice Motsepes and Royal Bafokengs we would have today? That's the litmus test," he said.
Ndavhe Mareda, chairman of Makole Group, the holding company for Black Royal Minerals, said though the ruling was a blow to transformation the concerns of investors could not be ignored. "If investment doesn't come, development doesn't happen at the speed it should," he said.
National Union of Mineworkers spokesman Livhuwani Mammburu said the "once empowered, always empowered" principle was "nonsense" and that black ownership rules had only benefited a few while mineworkers lived in abject poverty.
An analyst, who asked not to be named, said if transformation meant maintaining black ownership levels the ruling was a setback. But if it meant encouraging meaningful economic participation and job creation through investment it was a win. "The best way to transform the economy is to create businesses that can employ people in meaningful jobs," he said.
Peter Major, director: mining at Cadiz Corporate Solutions, said the transformation measures implemented since the 1990s had been more destructive than successful.
"Hopefully this [ruling] is the searchlight looking for the rest of the elements that should be in a workable charter. Nobody liked the perpetual 'topping up principle' ... it was immoral, unfair, uneconomic and financially disastrous. The Russians didn't like it, the Chinese didn't like it, the Americans and British certainly didn't like it."
hendersonr@sundaytimes.co.za..