It’s All About Blacks, Things You Should Know

The 2017 Mining Charter amongst other things, stipulated that a new mining right must have 30 percent black persons’ shareholding with the 30 percent shareholding to be apportioned between employees, communities and entrepreneurs in a specific manner.

To the Democratic Alliance (DA) party, the 2017 Mining Charter showed that the ANC government does not care about long-term and sustainable transformation in the mining sector.

The party upheld that the Mining Charter will be a disaster for the mining industry. “The ANC government’s Mining Charter proposal wants to make cronies and insiders richer, as they open up new opportunities to get in on mining deals,” wailed the party.

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According to the DA leader Mmusi Maimane, there is no doubt the 2017 Mining Charter will end up in court in the nearest future.

In the meantime, the following are the highlights of the 2017 Mining Charter. From Ownership to Employment, Procurement and Human Resource Development, here are the new rules to govern the mining sector.

Ownership 

  1. Minimum 30% BEE for all mining rights
    1. 8% employees
    2. 8% mine communities
    3. 14% black entrepreneurs
  2. Right-holders already at 30% not required to apportion
  3. Minimum 50% plus 1 Black Person shareholding for all new prospecting rights; must include voting rights
  4. Right-holder to pay 1% of annual turnover to the 30% BEE prior to any distributions to its shareholders. (Provisions of Companies Act 71, 2008 will apply)
  5. A holder who claims a Historical BEE Transaction (transaction that achieved 26% prior to 2017 Charter) must top up to 30% within 12 months. Applies even where the black person shareholding is no longer 26% due to either a BEE partner exiting or the contract with the BEE partner lapsing or the transfer of shares by the BEE partner to non-BEE persons.
  6. A holder who has maintained 26% black person shareholding is required to top up its black person shareholding to 30% within 12 months of the 2017 Charter coming into effect.

Employment Equity

  1. Board level: 50% black; 25% to be women
  2. Executive/Top Management: 50% black; 25% to be women
  3. Senior Management: 60% black; 30% to be women
  4. Middle Management: 75% black; 38% to be women
  5. Junior Management: 88% black; 44% to be women

Procurement

  1. 70% of all mining goods to be from BEE entities
  2. 80% of all services to be from BEE entities
  3. 100% of mineral samples to be analysed by SA-based firms
  4. Foreign suppliers to pay 1% of their annual turnover to the Mining Transformation and Development Agency.

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Beneficiation

  1. A maximum offsetting of 11% against BEE shareholding; must meet the following criteria:
    1. Invested in beneficiation since 2004;
    2. the beneficiation must be in line with the definition of beneficiation contained in the MPRDA;
    3. the Department of Mineral Resources must approve such beneficiation;
    4. 11% offsetting will not apply to beneficiation that started after 2004 but has since ceased or that has been terminated; and
    5. 11% offsetting can only be claimed if the beneficiation is still ongoing.

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Housing and Living Conditions

  1. Principles, as set out in the Housing and Living Conditions Standards for the Mining and Minerals Industry, developed in terms of section 100(1)(a) of the MPRDA which includes:
    1. decent standards of housing;
    2. centrality of homeownership;
    3. provision for social, physical and economic integrated human settlements;
    4. involvement of employees in the housing administrative system;
    5. affordable, equitable and sustainable health system; and
    6. proper nutrition requirements and standards.

Human Resource Development

  1. 5% investment of the Leviable Amount on skills development, apportioned as follows:
    1. 2% on essential skills development activities such as artisanal training, bursaries, literacy and numeracy skills for employees and non-employees (community members);
    2. 1% towards South African Historically Black Academic Institutions; and
    3. 2% towards the Mining Transformation and Development Agency.

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