Public has 30 days to comment as Mantashe releases long-awaited draft Mining Charter

accreditation
Minister of Mineral Resources Minister Gwede Mantashe
Minister of Mineral Resources Minister Gwede Mantashe

Minister of Mineral Resources Gwede Mantashe on Friday gazetted the draft Mining Charter, which allows the public 30 days to submit their comments. 

Earlier this week the Department of Mineral Resources (DMR) told Parliament that it had reached an agreement with industry and social partners that the charter would serve as "secondary legislation" as opposed to punitive law, Fin24 reported.

Prior to gazetting the charter, which aims to transform the mining industry, the minister met mining communities and other stakeholders for consultations.

President Cyril Ramaphosa has previously said that the charter should benefit all South Africans.

A previous version of the charter was challenged through the courts by the Minerals Council of South Africa, formerly known as the Chamber of Mines. The organisation represents 90% of the industry, and criticised former mining minister Mosebenzi Zwane for unilaterally deciding on transformation targets without consulting other stakeholders.

The council on Friday issued a statement on the draft charter and said it would need time to "study the document" and consult with its membership before forming a "comprehensive view". 

"The Minerals Council notes the areas of consensus achieved in what has not been an easy task undertaken by the DMR," the statement read.

'Free carry' interest raises concerns

The council however raised concerns over a provision for “free carry” interest on new mining rights.

“As previously explained, the industry does not favour a requirement of 10% ‘free carry’ on new mining rights as part of the proposed 30% BEE equity ownership target, as it would render uneconomic a significant proportion of potential new projects, and would undermine and constrain any prospects for growth in the sector and indeed the economy as a whole,” the council said.

"The Minerals Council will continue to participate fully in the engagement processes led by the DMR, and looks forward to the planned summit where it anticipates meaningful discussions will take place," the council said. 

The charter allows for mining companies to get credit for previous black-empowerment deals even when the investors later sold their shares to whites or foreigners, through its “once empowered, always empowered” principle.

However, companies will have had to meet the 26% black-ownership requirement, Bloomberg reported. The minimum percentage will be increased to 30% within five years of the new set of rules taking effect.

According to the draft, for new mining rights a minimum 30% black ownership requirement includes a 5% free-carried interest and 3% financed interest each for workers and mining communities. The remaining 14% is for black investors, Bloomberg reported.

Read the draft Mining Charter here:

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

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.42
+1.4%
Rand - Pound
20.04
+1.4%
Rand - Euro
17.13
+1.2%
Rand - Aus dollar
10.62
+1.0%
Rand - Yen
0.13
+1.2%
Gold
1,808.96
-0.3%
Silver
25.35
-0.6%
Palladium
2,682.50
+0.8%
Platinum
1,061.50
+0.9%
Brent Crude
75.41
+0.4%
Top 40
63,015
+0.3%
All Share
69,146
+0.3%
Resource 10
71,115
+0.6%
Industrial 25
87,953
-0.1%
Financial 15
12,969
+0.5%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
In light of the recent looting, do you think a basic income grant is the right approach to deal with SA’s hunger and poverty problems?
Please select an option Oops! Something went wrong, please try again later.
Results
It will go a long way in helping fight the symptoms of SA’s entrenched inequality, especially for those who are starving right now
20% - 1513 votes
SA’s problems are complex, and we instead need to spend that money on building and growing our economy, which will help the country in the long run
31% - 2342 votes
All grants are a problem as they foster a reliance on handouts
49% - 3704 votes
Vote