The Black Business Council (BBC) national council has reaffirmed its support for the draft amended Mining Charter, owing to the removal of the issue of ‘once empowered always empowered’ from the charter.

BBC CEO Mohale Ralebitso said that the ‘once empowered always empowered’ provision raised a number of challenges to ensuring black empowerment in the mining industry.

He explained that one of the main challenges of the provision, among others, was that it promoted fronting, which reduced empowerment to an event rather than ensuring that it formed part of an ongoing and inclusive journey.

During the briefing, South African Mining Development Association (Samda) president Bridgette Radebe attributed black shareholders selling their shares in mining companies to economic necessity.

“Often black shareholders have to take out substantial loans and often put their houses up as collateral to buy shares in mining companies and, because many mining companies are not paying dividends to shareholders, they are forced to sell their shares,” stated Radebe, adding that, if shareholders default on loan repayments, the banks take their shares as collateral against the loan.

Therefore, she pointed out, the banks became the new owners of the shares that were once held by black shareholders.

Radebe proposed that banks instead provide finance for trade unions, such as the National Union of Mineworkers, to enable them to become the owners of mines, as this would benefit workers and communities and therefore promote black ownership.

“It is time for government to take steps against mining companies that fail to comply with the transformation and empowerment targets of the Mining Charter. Companies are failing to honour the ownership, local procurement and beneficiation targets,” she stated.

Radebe referred to Samda findings related to research on 49 JSE-listed companies worth R2.57-trillion.

“If all these companies had at least 26% active participation of the historically disadvantaged South Africans, we [would have had] R669-billion of active participation in the hands of black people, but that is not happening and there is only R63.5-billion or 2.5%.”

Radebe also asserted that mining companies and auditors had “colluded” to channel billions of rands out of the country by employing transfer pricing in the mining industry.

Transfer pricing involved the sale of goods or services at an artificial price, usually lower than their actual worth, to transfer income from one business to an associated business in a different tax jurisdiction.

She contended that mining companies, particu-larly those that had their primary listing outside South Africa, sold commodities to their marketing divisions at lower than market-related prices.

Radebe said this had resulted in the illicit outflow of billions of rands in profits to tax havens, the declaration of low profits and the payment of minimal taxes.

Further, Ralebitso stated that the BBC was firm in its view that there was a large pool of untapped potential black and other new participants within the mining industry that should be enabled to participate in the mineral resources sector to add more value to South Africa’s finite mineral wealth.