Some of the elements of the Mining Charter and Revised Codes overlap. However, the application of the elements, such as Ownership differs vastly. Let’s get to grips on this important topic.
The Reviewed Broad-Based Black-Economic Empowerment Charter for the South African Mining and Minerals Industry (Charter) was published on 15 June 2017. The title of the Charter is misleading as it alludes to broad-based black economic empowerment. The publication however was done in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002 and not the Broad-Based Black Economic Empowerment Act, Act 53 of 2003 (BEE-Act).
Only publications done in terms of section 9(1) of the BEE Act are codes to be used for B-BBEE verification purposes.
The vision of the mining charter is to facilitate sustainable transformation, growth and development of the mining and minerals industry. This is to be done by setting the framework, targets and timetable for effecting entry of previously disadvantaged South Africans to the mining industry. The main concern with the mining Charter is that there was no clear consultation process followed with the mining industry itself.
Mining companies obtain BEE certificates in terms of the Revised Codes of Good Practice 2013 (Revised Codes), and not the Mining Charter. The Mining Charter plays an important role in how the black ownership structures of the mining companies must be set up. Mining and exploration licences are issued to applicants in terms of the Charter, but it does not apply to those supplying goods or services to the mining industry.
The Revised Codes prescribe the targets for scoring points on the B-BBEE scorecard; however, companies operating within the mining industry still need to adhere to the targets set by the mining charter to obtain and maintain mining and prospecting rights. With the Revised Codes no sub-minimums apply. If these are not met companies would not automatically be disqualified from obtaining a B-BBEE certificate. However, in terms of the Mining Charter, failure to meet the minimum requirements on the checklist will lead to the mining and/ or prospecting rights being withdrawn or not being granted at all.
Some of the elements of the Mining Charter and Revised Codes overlap. The application of the elements, however, differs vastly. Ownership is one of those elements. According to the Mining Charter, the following are important ownership compliance requirements:
Mining companies are advised to bear in mind both the Revised Codes and the Mining Charter as compliance with one does not guarantee compliance with the other. There is doubt as to the legality of the Mining Charter in its present form. The Chamber of Mines has already indicated its intention to take the Charter on judicial review.
About our author: Audrey Cloete obtained her LLB degree from the North-West University Potchefstroom in 2003. She completed her articles with the main focus on Criminal Law and is also an admitted Conveyancer. Audrey joined SERR Synergy in 2015 where she currently works as a Legal Compliance Advisor.
© 2018 SERR Synergy. All Rights Reserved.
This event is closed for SERR employees only.
YES programme participation can assist qualifying businesses to enhance their overall B-BBEE status with up to 2 levels.