The new Mining Charter imposes several transformation-based changes, including a minimum 30% broad-based black economic empowerment shareholding, and also stipulates that a 10% equity or the equity equivalent be set aside for communities, including a minimum of 5% nontransferable shares or the equity equivalent, Economic Development Solutions MD Janine Epsin noted in a statement released last week.

She said that, while the charter’s intention was commendable, it might “have a negative impact on the mining industry and the communities it is supposed to help”.

Epsin explained that the challenge was not necessarily the content of the charter but rather the way in which it would impede development by enabling an environment for unrealistic community expectations.

“The community could expect that the mines build houses not only for the workers but also for the entire community, and that mining houses must pay for decent roads, even though that is the responsibility of the municipalities.”

Espin implied that the notion of equity, combined with the general perception by rural communities that all mines generated millions in profit, might result in community dissatisfaction in the long run.

“For the 10% equity in the new Mining Charter to be successful, we have to look at how it will be implemented and regulated effectively,” she said, adding that only some mines had fully complied with the obligations set out in their social and labour plans (SLPs) and/or had collaborated with municipalities to make significant contributions to infrastructure development.

“One of the reasons for this could be that the Department of Mineral Resources has not created [sufficient] measures to ensure that SLP compliance is adhered to by all mining companies,” she commented.

Epsin stressed that it was not necessarily the mines’ responsibility to build houses and roads for entire communities, as “they already pay rates and taxes”.