Mining Weekly

The South African Chamber of Mines (CoM) has warned that the future viability of the country’s mining sector could be placed in “serious jeopardy” if the Department of Mineral Resources’ (DMR’s) proposed revised Mining Charter is gazetted.

During a media briefing in Johannesburg last week, CoM CEO Roger Baxter and public affairs and transformation senior executive Tebello Chabana warned that implementing the revised Mining Charter in its current form would be “ill-considered” and unattainable, with “dire consequences” for the mining industry and, therefore, the entire South African economy.

The CoM said that it had been sidelined in the discussions regarding the new charter and had not yet received a copy of the document, the revised version of which DMR deputy director-general Mosa Mabuza had discussed during his submission to Parliament on November 16.

The chamber’s grievances with the DMR’s revised Mining Charter included, among others, the proposed implementation of new levies and significantly increased black-ownership targets.

Baxter pointed out that the revised charter had proposed that mining companies contribute a proportion of revenues to a Mining Transformation and Development Agency, an entity never discussed in previous interactions among sector stakeholders. He added that the CoM did not have an understanding of what role this new proposed association would play.

Chabana highlighted that the DMR had substantially increased the targets relating to the appointment of historically disadvantaged South Africans (HDSAs) in companies, and had also changed the definition to mean black South Africans, thereby excluding other HDSAs, such as white women.

“The new targets may be desirable, but some aspects are, in the industry’s view, currently unachievable. The mining industry on the whole achieved the employment equity targets of the 2010 Mining Charter and is not opposed to increasing the targets. However, the targets have to be based on what is realistically achievable,” he emphasised.

Baxter lamented that many of the new elements in the revised Mining Charter had left the industry feeling “straightjacketed”. He elaborated that the additions would “heavily constrain” the mining companies and would potentially be setting them up for failure, as a number of provisions of the revised charter may not be achievable, such as mines having to secure a minimum of 30% of their total goods and services from 50% +1 black-owned and -controlled small, medium-sized and microenterprises.

“We simply do not have data on whether there are enough of these sorts of companies to supply the needs of mines and the DMR has not been able to provide the chamber with any information regarding the number or capabilities of such entities.”

Baxter said the CoM and its members were “deeply concerned” that the new Mining Charter could be gazetted before year-end – as suggested by Mabuza during his presentation to Parliament in mid-November – without the DMR first consulting with the industry’s stakeholders about the apparent defects that they believed existed in the revisions made to the charter.