Mosebenzi Zwane. Picture: GCIS

Business In The News South Africa

Chamber of Mines dismisses Zwane’s response to High Court challenge on Mining Charter

 JOHANNESBURG, August 8 – The Chamber of Mines on Tuesday came out strongly against the Department of Mineral Resources (DMR) following its answering affidavit submitted to the High Court in response to the Chamber’s urgent application to interdict the implementation of the Reviewed Mining Charter.
The Chamber filed an application to have the Mining Charter reviewed and set aside after it was gazetted in June. The Charter sets new black ownership targets for the industry, including that new mining rights holders have 30 percent black ownership shared amongst employees, communities and black entrepreneurs.
 
The Chamber said that the DMR’s media statement, which followed a delayed answering affidavit on Monday, was “aggressive” and made judgements that were reserved for the High Court. 
In his answering affidavit, mineral resources minister Mosebenzi Zwane accuses the Chamber of attempting to block effective and meaningful participation of black people in the mining and minerals industry.
 
But in a statement, the Chamber says it is not opposed to transformation and that the ongoing changing of the face of the industry over many years demonstrates that.
The Chamber says the DMR’s Reviewed Charter is designed to extract billions of rand in revenues annually from mining right holders into an agency controlled solely by the Minister of Mineral Resources. 
“The Chamber’s only proviso is that real transformation must be implemented with due regard to what is achievable bearing in mind the realities of the situation the industry faces,” the Chamber said.
 
“In contrast, the transformation advocated by the DMR in its Reviewed Charter is designed to benefit the interests of a select few while killing any appetite for investment and leading to further job losses in an industry that has already experienced a significant reduction in employment levels over the past few years.”
  
The Chamber also said Zwane’s claims that the DMR had met the Chamber on 17 occasions between April 2016 and March 2017 were misleading. 
“The DMR disingenuously confuses the meetings held to resolve the declaratory order court process to resolve the issue of continuing consequences of previous black economic empowerment transactions, which was started long before the first draft of the unilaterally developed Reviewed Charter was published by the DMR, with actual discussion about the Reviewed Mining Charter.
“According to the Chamber’s records and detailed notes from each meeting, only two meetings in 2016 were related to non-ownership aspects of the Reviewed Mining Charter. 
“In each of these meetings the DMR only listened to the Chamber’s inputs without providing input or taking these into account. During 2017, the Chamber met with the DMR on six occasions where some non-ownership elements were discussed, but the primary focus was on the declaratory order court application.”
The Chamber said it was resolute in its view that the Charter would not serve the interests of South Africa, but destroy investment and lead to further job losses, which would cause irreparable damage to the mining industry.

Mineral resources minister, Mosebenzi Zwane, has filed his answering affidavit in the North Gauteng High Court to oppose the Chamber of Mines’ urgent interdict to prevent government from implementing the Mining Charter.

This comes after the Chamber filed an application in June to have the Mining Charter reviewed and set aside, saying that the Charter would be harmful to the industry and the economy because of its content, as well as the vague and contradictory language employed to convey that content.

The Charter, which was gazetted in June, sets new black ownership targets for the industry, including that new mining rights holders have 30 percent black ownership shared amongst employees, communities and black entrepreneurs.

Mining rights holders who have complied with the previous target of 26 percent have to “top up” to 30 percent within 12 months. Those applying for prospecting rights would be required to have a “minimum of 50 percent plus one black person shareholding”. These shareholders must have voting rights.

Zwane’s answering affidavit was due on July 31 but was filed a week later on Monday because he had been out of the country for a bilateral visit to the Central African Republic together with several senior departmental officials and advisers, all of whose contributions were vital in dealing with the affidavit.

In his answering affidavit, Zwane accuses the Chamber of attempting to block effective and meaningful participation of black people in the mining and minerals industry.

He said that the Chamber’s opening statement in its founding affidavit that it was committed to ensuring transformation in the mining industry and supports the objectives of the Mineral and Petroleum Resources Development Act (MPRDA) was untrue.

Zwane said the Mining Charter was never meant to be an ‘aspirational document’ as is suggested by the Chamber.

“The MPRDA very clearly empowers the Minister of Mineral Resources to develop a Charter. This legislative instruction bears legal consequences which follow the development of the charter by the minister,” Zwane said.

“Parliament therefore, in empowering the Minister to develop the Charter, was intent on ensuring that Government’s objectives of redressing historical, social and economic inequalities must be achieved in the broadest manner possible.”

Zwane also denied the Chamber’s allegation that he had not held meaningful consultations regarding the implementation of the Charter.

“Throughout the course of its deliberations and consultations with the applicant from at least July 2016 onward, the Department kept the applicant apprised of its thinking and consulted with the applicant as the draft 2017 charter evolved, as part of the consultative process with all the other parties.  No other stakeholder was afforded this,” Zwane said.

“The Department had devoted considerably more time, energy and resources to dealing with the applicant and its concerns than any other stakeholder in the industry. There were at least 17 substantive meetings and extensive engagements which the Department held with the applicant in relation to the draft 2017 Charter.”

 – African News Agency (ANA)

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