Mining BEE tensions

2010-07-03 12:32

Deliberations about the “once-empowered, always-empowered”

principle delayed the signing this week of the mining declaration document,

which re-commits the mining industry to ­accelerating implementation of black

economic empowerment (BEE).

The “once-empowered, always-empowered” principle provides that even

if black ­investors sell their shares in a white-owned company, the company does

not lose its BEE status. The principle is not included in the new mining

declaration document.

South African Mining ­Development Association (Samda) chairperson

Nchaka Moloi said: “The principle was a bone of contention prior to the meeting

in which we signed the ­declaration.”

Samda represents junior ­miners and black-owned ­mining firms, and

was a ­signatory to the 13-point ­declaration.

Other signatories were the ­Department of Mineral ­Resources (DMR),

the ­Chamber of Mines, the National ­Union of Mine Workers (NUM), Solida­rity

and the United ­Association of SA (Uasa).

The ­chamber’s spokesperson, Jabu Maphalala, said his ­organisation

had not tried to push the “once-empowered, always-empowered” principle ­into the

declaration document. He said the chamber – the mouthpiece for the R2 trillion

mining industry – wanted ­clarity on some of the wording in the document, but

declined to elaborate.

DMR spokesperson Jeremy Michaels refused to be drawn into the

matter, saying: “What is important to us is that the agreement has been signed

and we want to implement it now.”

The declaration was signed after the DMR conducted an ­extensive

review of transformation in the mining industry.

The review, which is yet to be published, shows that 9% of the

sector’s equity was black-owned last year, some distance from the 15% target set

by the BEE charter.

The “once-empowered, ­always empowered” principle made headlines in

2007 when the Department of Trade and Industry was finalising its BEE codes of

good practice, the ­blueprint legislation for ­crafting empowerment deals.

The idea was shot down by black business bodies, who feared that

the principle could lead to whites further entrenching their grip on the


A watered-down version of the principle, dubbed the ­“continuing

consequences” principle, was eventually ­adopted when the codes came into effect

in 2008. This ­principle makes provision for companies to claim up to 40% of the

20 points available for ownership in the BEE scorecard even if empowerment

­partners have exited.

Uasa’s chief ­operating officer Leon Grobler said government should

not get in the way of black investors if they wished to sell their stakes in

white-owned firms.

However, his trade union counterpart, National Union of Mineworkers

president Senzeni Zokwana, said he ­supported Mineral Resources Minister ­Susan

Shabangu’s stance that mining firms must endeavour to retain their BEE status at

all times.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.