JOHANNESBURG (miningweekly.com) – In what is a clear first round victory for the Chamber of Mines of South Africa against the errant Department of Mineral Resources (DMR), Mineral Resources Minister Mosebenzi Zwane has agreed to suspend the implementation of the controversial Mining Charter Three until after the High Court has pronounced judgement on what the legal fraternity has roundly condemned as unconstitutional, contrary to the Companies Act and a taunting of the World Trade Organisation.
Mining Weekly Online can today report that the chamber on Friday extracted a written undertaking from the Minister that neither he nor DMR will apply the provisions of Mining Charter Three “in any way”, pending judgement in the chamber’s urgent interdict application.
In the event of any breach of the Ministerial undertaking, the chamber can set the urgent interdict application down for hearing on 48 hours’ notice.
Based on the written undertaking, the chamber has in turn acceded to the DMR’s request for extra time to prepare its answering affidavit to the interdict application and for the hearing to take place on a date later than the scheduled July 18.
The parties have asked the Deputy Judge President of the High Court to allocate a hearing date in September 2017.
This date is subject to allocation by the Deputy Judge President, which is expected to occur by around the end of July.
Chamber CEO Roger Baxter described the arrangement as satisfactory for the chamber and the industry, whose primary objective through the interdict application remains to ensure that the DMR’s charter does not come into effect, pending a court application to have it reviewed and set aside.
Baxter reiterated the commitment of the chamber and the mining industry to transformation, and stressed that it was imperative that meaningful and lasting transformation be undertaken in a way that ensures the sustainability and growth of the industry.
The chamber’s application to have Mining Charter Three reviewed under the Promotion of Administrative Justice Act (PAJA) and the Constitution will be lodged as soon as possible after judgment has been handed down in the chamber’s urgent interdict application.
Meanwhile, its application for a declaratory order on ‘once empowered, always empowered’ black economic empowerment transactions under the original and 2010 charters, has been re-enrolled by the Deputy Judge President for hearing on November 8 and 9.
The chamber earlier warned that strangulation of the mining sector risks the stifling of the entire South African economy.
In its current poor state, mining and the many companies that depend on it are already in such dire straits that they are poised to disappoint the Treasury when it comes to tax payments.
Commentators have been unanimous in their condemnation.
Any Cabinet with insight would know that allowing the Minerals Ministry and the DMR to gazette a punitive charter would be allowing uninitiated leadership to play with fire and create an environment of serious economic and social instability.
To instruct the Ministry and the DMR now to engage in a public consultation process between civil society, labour and industry on Mining Charter Three – as the Treasury has done with its 14-point plan – is entirely the wrong way round as engagement should precede gazetting.
Also unconvincing is the setting of deadlines for the finalisation of the Minerals and Petroleum Resources Development Act Amendment Bill.
There is no piece of legislation that has had more end dates than this amendment bill and what needs to be acknowledged is that it is the content that will be all important not just the end date.
As the Chamber of Mines has noted, 70 000 jobs have already been lost over the past five years and net and gross investment over the past two years has been negligible.
Along the way, the lack of trust that investors have in the government has been growing and the National Treasury’s 14-point action plan is doing little to improve matters.
Investors view Mining Charter Three as a measure that will devastate the industry. The rogue drafters of this document showed disdain for the Constitution, the Companies Act and the World Trade Organisation's General Agreement on Tariffs and Trade.
Companies and investors see a starving the industry of capital, shortening mine life, slashing profits and compounding the problem of declining reserves.
Taking 1% of revenue from mining companies even if they are making losses is indicative of the draconian approach of Mining Charter Three, which will destroy the South African mining industry if implemented..