The decision by the Department of Mineral Resources (DMR) and the mining industry to refer to the High Court their interpretation dispute regarding the Mining Charter’s position on the requirement for 26% black ownership of mining companies is a “sensible and mature approach”, says international law firm Hogan Lovells partner and mining head Warren Beech.

At the heart of the interpretational dispute between the Ministry and the mining industry is whether the ‘once empowered, always empowered’ principle applies.

The DMR’s standpoint is that mining houses have to ensure that, even when black economic-empowerment (BEE) partnerships cease, mine assets are disposed of or shares are sold to non-BEE parties, the 26% black-owned threshold is met.

Beech says ensuring certainty on this matter is critically important for investors and mining houses and he believes that the High Court could expedite proceedings to ensure a decision is made as early as the next few months.

“However, the matter could still be prolonged, as once the High Court makes a ruling, the parties can still take the matter on appeal to other courts.”

The final outcome of the decision by the courts would also be significant, as it would impact on the oil and gas sectors, which are also currently governed by the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter.

This matter has arisen because Mineral Resources Minister Advocate Ngoako Ramatlhodi announced the outcomes of 80% of the compiled audit results, which assessed the extent to which mining companies had complied with the Mining Charter in the past ten years to 2014, at the end of last month during a press briefing, in Tshwane.

He pointed out that 20% of South Africa’s mining companies had not provided details about their compliance with the Mining Charter; however, these were mostly the smaller mining companies.

The Minister added that the DMR, mining houses and unions would soon approach the High Court to obtain clarity on how to assess questions of ownership.

Ramatlhodi also highlighted the percentage of right holders that had met the 40% target for each of the employment categories, with top management reaching 73%, senior management 50%, middle management 56%, junior management 68%, and core and critical skills 79%.

He added that only 63% of right holders with hostels had converted these hostels to either family and/or single units.

“The drive to improve the living standards of mineworkers has not fully been realised. More needs to be done to address the broader objective of ensuring that mineworkers live in decent accommodation,” Ramatlhodi emphasised.

The Minister lamented that, “except for the analysis of samples in South Africa, the performance on sustainable development has not met expectations”.

Nonetheless, he noted that the DMR thanked those companies, which had embraced the charter and the MPRDA, which had continued to be sensitive to their obligations and for whom the implementation of the Mining Charter was not merely a “box-ticking exercise”.

Ramatlhodi said the DMR would further strengthen the efficacy of the Mining Charter through a review process to accelerate the transformation imperative in the mining sector and create an environment conducive to sustainable growth in the sector.

Further, he stated that the DMR would, following this assessment, continue to engage industry and other stakeholders in addressing compliance matters through the tripartite forum and individually to reiterate that government values the contribution of the mining industry to the South African economy.

However, Ramatlhodi stressed that government expected investors in the industry to behave in a “respon- sible manner” and to abide by the laws and policies of the country.