The Minerals Council plays a critical role in engaging with government and other stakeholders, and in lobbying government on behalf of its members on all matters relating to transformation. The Minerals Council is committed to supporting the aims of the Mineral and Petroleum Resources Development Act (MPRDA) and its associated Mining Charter.

Critical team members

  • Tebello Chabana Senior Executive: Public Affairs and Transformation
  • Fundiswa Ndaba Senior Policy Analyst: Public Affairs and Transformation

Context

Section 100 of the MPRDA requires the Minister of Mineral Resources to set socio-economic targets through the Mining Charter. These were set after broad agreement between the tripartite stakeholders, namely government, business and organised labour.

The Mining Charter has been reviewed twice since it was implemented in 2004, and was revised in 2010, again in consultation with stakeholders. The Minerals Council was a key player in the development of the Mining Charter, and has continued to play a critical role in negotiating revisions to targets on behalf of its members, to ensure that the targets set are realistic and can be implemented.

Now that the 10-year Mining Charter period has come to an end, preparation for a review of the Mining Charter and the potential way forward begun within the Minerals Council and among its members. The Minerals Council initiated discussions with the Department of Mineral Resources (DMR) on the new Mining Charter, and represents its members’ views on the review of the Mining Charter and likely changes to targets.

An important consideration for this review is to ensure that the new Mining Charter is not in conflict with the amended BEE Codes published by the Department of Trade and Industry. In this regard, the Minerals Council welcomed the decision announced by the DMR that the industry will be exempted from compliance with the provisions of the Broad Based Black Economic Empowerment Act of 2003. The announcement indicates clear recognition by government that the mining industry and its stakeholders need continuity and certainty to be able to effect the transformation envisaged in the MPRDA, and to continue to sustain and grow investment in our sector.

The mining industry recognises that transformation is not only a regulatory requirement but a business imperative that the industry is determined to fulfil. The year 2014 was a milestone for the industry as it marked the 20-year anniversary of democracy and the delivery date for agreed Mining Charter targets. All members of the Minerals Council have demonstrated their commitment to meeting their Mining Charter obligations.

The Minerals Council monitors the progress of its members with respect to the Mining Charter targets. As part of its monitoring role, the Minerals Council identifies challenges faced by its members in achieving these targets, and engages with the DMR for immediate attention and revision where necessary.

Key activities

Most of the negotiations and discussions about transformation in general, and the Mining Charter in particular, are held under the auspices of the tripartite Mining Industry Growth Development and Employment Task Team (MIGDETT) in which the Minerals Council represents the mandated positions of its members. The Minerals Council also leads the delegation of members when the industry is required to present to Parliament on the progress made by the mining industry in respect of the Mining Charter.

An important function of the Minerals Council is to ensure that the “rules of the game” are maintained. So, when the DMR undertakes a review of progress in the achievement of Mining Charter targets, for example, the Minerals Council plays a key role in ensuring that the instrument being used in conducting the assessment does not deviate from what was agreed initially, and the assessors do not introduce new criteria not agreed upon.

The year 2018 saw a number of developments on key legislative and regulatory matters affecting the mining industry, with the Mining Charter at the forefront of this. On his appointment in February 2018, Mineral Resources Minister Gwede Mantashe set about implementing key changes designed to crack down on corruption. He also resolved to make inroads on the issue of other regulatory concerns, including progress on the finalisation of a new Mining Charter.

The Minerals Council was actively involved in consultations which involved the tabling of a draft new charter in June 2018, and the gazetting of a new charter in September 2018. The Minerals Council has taken the view that the new charter is an advance on previous drafts.

However, one serious concern remains – the failure of the new charter to fully recognise the continuing consequences of previous transactions. The charter stipulates that there is no such recognition in respect of the renewal or transfer of mining rights. The Minerals Council has been in dialogue with the Minister on this matter but given that the issues were not timeously resolved within the 180-timeline constraint for instituting a judicial review application, the Minerals Council had no other option but to pursue the legal route to reserve its rights. The judicial review application was accordingly issued in March 2019 and we are now awaiting the response from the Minister and the DMR. Notwithstanding the legal action, it is hoped that the issues can still be resolved through engagement with the Minister.

The Minerals Council’s members are listed entities and their boards have fiduciary responsibilities to seek and secure regulatory certainty in respect of continuing consequences on which basis mineral rights have been granted. The companies have made disclosures to their shareholders for years on these matters, which have now been called into question. Rather than wait for a potentially adversarial legal process in which each company applies to confirm its status, the Minerals Council is seeking to do this pre-emptively. That said, the DMR has been kept fully apprised of the Minerals Council’s approach and has indicated, as has the Minerals Council, that a negotiated resolution to the impasse would be preferable.

External processes/bodies

The Minerals Council is a key member of Business Unity South Africa (BUSA), and participates in the BUSA committees that deal with the BEE Act.