Minerals Council South Africa has filed an application for the judicial review and setting aside of some of the clauses of Mining Charter III, which was published in September.

The decision follows after the council’s board engaged in ongoing attempts to reach a compromise with Mineral Resources Minister Gwede Mantashe on certain provisions that are “problematic for the industry” and could be “detrimental to its sustainability”.

The Minerals Council has delayed bringing the application in the hope that the discussions would be successful but, given the peremptory 180-day time bar imposed by the Promotion of Administrative Justice Act, the council was obliged to launch the review proceedings on March 26, despite the fact that the discussions are ongoing and may yet bear fruit.

CEO Roger Baxter noted that the council remained fully committed to the transformation of the mining sector in South Africa in order to achieve job creation, economic growth and competitiveness and social upliftment.

“A transformed, growing and competitive mining sector would be a catalyst for South Africa’s development and critical for the realisation of the ambitions of the National Development Plan.

“However, these goals will only be realised through a minerals policy framework that conforms to the rule of law and principles of legality and through administration action which is lawful, reasonable and procedurally fair and consistent with provisions of the country’s legislation in all respects.”

Baxter added that the rule of law, regulatory uncertainty and the fair and even-handed administration of laws were of the utmost importance in sustaining the industry and the economy as a whole.

The council believes most aspects of the charter represent a reasonable and workable framework, but says the fact that the charter does not fully recognise the continuing consequences of previous empowerment transactions, particularly in respect of mining right renewals and the transfers of these rights, remains untenable.

“Not only does this provision have a severely dampening effect on the attractiveness of mining in investors’ eyes, but it also breaches the declaratory order on the matter issued by the North Gauteng High Court in April 2018.

“The Minister has been kept fully apprised of the Minerals Council’s intentions. We continue to seek a solution to the current impasse that respects the outcome of the High Court judgment on continuing consequences and provides a level playing field for companies in this regard,” said Baxter.

Government Response
The Department of Mineral Resources (DMR) has noted the application for judicial review and said it was “unfortunate” that the council had taken this route, stating that the parties could have reached an amicable solution in the ongoing dialogues.

“The current Mining Charter represents broad consensus and acceptance by stakeholders who were involved in its development and formulation. As such, it is a broadly agreed to, workable framework for transformation in the industry.

“In the lead-up to its gazetting, and thereafter, there have been and continues to be constant dialogue between the Ministry and various stakeholders. “Delaying the implementation of the charter will impact negatively on the positive climate characterising mining and economic investment at present. “Such delays will also halt the realisation of the much-needed benefits for the workers and the mining communities,” the department stated.

The DMR intends to oppose the application by the council and will file its responding papers in due course.

Commentary
Law firm Herbert Smith Freehills partner Peter Leon told Mining Weekly that the Minerals Council made a sensible and necessary move. “Procedurally, it is necessary because of the six-month time limit for bringing judicial review applications, which expired earlier this week. “Substantively, the move is necessary, as the charter currently drafted does not extend the protection of historical black economic empowerment transactions to the renewal of transfer of rights.

“This is obviously prejudicial to mining companies whose rights expire in the short term or that are planning to sell their rights. It is clear that the Minerals Council’s attempt to engage the DMR on these issues over the last six months have come to naught.”