DMR appeals ruling on BEE top-up in Mining Charter

Cape Town - The Department of Mineral Resources on Tuesday confirmed that it would appeal the judgment handed down by the North Gauteng High Court in Pretoria on the Mining Charter.

The court granted a declaratory order on April 4 against a provision in the disputed 2017 Mining Charter which required holders of mining rights to top up the black ownership of its mines to 30%, if it falls short.

The judgment declared that the first two versions of the Mining Charter - 2004 and 2010 - did not require mining companies to top up black ownership levels in perpetuity if they previously met the minimum 26% requirement.

The DMR said in a statement that the judgment had dire implications for the economic transformation imperatives of the Constitution, the mining sector and South Africa at large.

"It further has the potential of extending regulatory and policy uncertainty, and sterilisation of our mineral resources, with grave economic growth and employment implications."

The Chamber of Mines, which brought the case against the Department of Mineral Resources in November last year, argued that the perpetual top-up would steer away investment from South Africa.

The top-up provision in the 2017 Mining Charter meant that if a BEE partner had exited, and a partnership or shares were sold to someone who was not historically disadvantaged, then the mining company would have to top up the BEE ownership level back to 30% within 12 months.

The Chamber’s legal counsel argued that the top-up provision was unconstitutional, as it was vague and uncertain and would steer away investment.

The DMR said on Tuesday that it was concerned by the implications of the majority judgment on the attainment of the objective to sustainably transform South Africa’s mining industry by bringing in new entrants and empowering workers and communities in mining towns.

The April 4 order was made by a full bench of judges, which included Judge Peter Mabuza, Judge Tina Siwendu and Judge Frans Barrie.

The respondents, the DMR and the deputy director general, were ordered to pay the costs of the application.

President Cyril Ramaphosa has committed to ending the impasse on the Charter during his State of the Nation Address in February. He told Parliament in March that the new Charter should benefit South Africans and not a select few.

He was hopeful that an agreement on the Charter could be reached within the three-month timeline. Mines Minister Gwede Mantashe has been engaging with various stakeholders to address the matter.

The Chamber of Mines said it was currently reviewing the specified grounds of appeal.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Yes. We need the money.
11% - 830 votes
It depends on how the funds are used.
74% - 5479 votes
No. We should have gotten the loan elsewhere.
15% - 1096 votes