Gwede Mantashe exceeded his powers with 2018 Mining Charter, says industry body

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Gwede Mantashe.
Gwede Mantashe.
  • An application for the judicial review and setting aside of certain clauses of the mining charter is being heard this week. 
  • According to industry body, the Minerals Council of SA, Mineral Resources and Energy Minister Gwede Mantashe exceeded his powers in publishing sweeping provisions of the Mining Charter in 2018. 
  • They want certain sections set aside, and take issue with key BEE clauses. 

Mineral Resources and Energy Minister Gwede Mantashe exceeded his powers and acted irrationally in publishing the "sweeping provisions" of the 2018 Mining Charter.

This is according to the Minerals Council of SA, which has filed an application for judicial review in a bid to have certain clauses of the charter set aside, arguing that these are vague and unjustified.

The matter will be heard this week from 3 to 6 May.

One key bone of contention is over the approach to transformation of the mining sector in the charter.

The sections of the document being challenged by the industry body include non-recognition of previous transactions in respect of mining right renewals and transfers.

The industry also questions what it terms the "practicality of the inclusive procurement provisions relating to local content targets for mining goods".

The Mineral and Petroleum Resources Development Act (MPRDA) empowered the minister to develop the Mining Charter as a tool for driving transformation in the industry and inclusivity. However, the industry argues that the regulation in its current state could be detrimental to the growth and further discourage investment.

One of the clauses which the council wants the court to review is the provision of a minimum of 30% BEE shareholding for companies and its distribution.

It argues that the MPRDA does not authorise the minister to prescribe the minimum shareholding or the specific shareholding in the case of new mining rights holders.

"The minister does not give a single reason for his decision to set the shareholding of black persons in mining right holders at 30% to acquire the specific distribution of the 30% shareholding," it says.

Policy certainty

Advocate Christopher Loxton stressed the importance of regulatory certainty in a capital intense industry like mining, adding that submitted that investors often go to places where they would be assured of what the future would look like.

The council said the application was brought after appeared that efforts to resolve the matters through dialogue could not be reached.

It stressed that the aim of the review application is to "ensure adequate policy certainty that will facilitate the sustainability and growth of the country’s mining industry, and give new impetus to confidence in new exploration projects" which have "slowed drastically" in recent years.

The Minerals Council also took issue with the clause dealing with the issuing of new mining rights and disposal of BEE shareholding, which states that where a BEE shareholding is disposed of below the prescribed minimum shareholding, a mining right holder's empowerment credentials shall be recognised for the duration of the mining right, provided among other things that a mining right holder is compliant with the requirements of the Mining Charter at the time of disposal.

"We say those clauses are problematic," said Loxton.

He further argued that there is no provision of the MPRDA which authorises the minister prescribe the minimum shareholding, or specific distribution of shares in mining rights.

The hearing continues and will run until Thursday.

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