Johannesburg - The Chamber of Mines fired the first salvo in the battle over the country’s mining charter on Friday by asking the high court for guidance on how to interpret the ownership clause in the charter. The National Union of Mineworkers (NUM) is opposed to seeking a declaratory court order.
The industry body and South Africa’s Department of Mineral Resources agreed in March to seek a court order but the Chamber has now broken rank by approaching the court independently. The Chamber says that a joint application implies it and the mineral resource department are in agreement, which is not the case.
The sticking point at issue in the charter is the interpretation of the continuous recognition principle, commonly known as “once empowered, always empowered”. The principle states that if a black economic empowerment (BEE) shareholder sells their shares, the host company will still be recognised as BEE compliant.
Large listed companies favour the principle because it prevents them from having to continually seek BEE partners. They also argue that it is wrong for black shareholders to be prevented from taking advantage of rising share prices. Opposing views say BEE shareholders must only sell to other black shareholders to maintain empowerment status.
Empowerment deals struck in the early 2000s have since matured and seen black shareholders cashing in on their investments. The Department of Mineral Resources and the Department of Trade and Industry - custodians of BEE policy and legislation - do not apply continuous recognition.
The Department of Mineral Resources must now respond to the Chamber’s move and a court date to hear the matter will be set. When judgement is delivered, either side can appeal. The matter is expected to drag on for a few months.
Mahlodi Muofhe, adviser to Mineral Resources Minister Ngoako Ramatlhodi, told ANA that the department had expected the application. Muofhe says the minister could not have unilaterally applied his interpretation of the charter. “We live in a constitutional democracy and in any dispute, parties have a right to approach courts to seek a resolution,” he said.
Apart from ownership, the chamber and department are also at odds over other areas of the charter, including the provision of housing and social spending with the only notable area of agreement being employment equity.
ANA