CAPE TOWN –The Minerals Council South Africa, which represents 90percent of the country’s mineral production, is heading to court for a judicial review of aspects of the 2018 Mining Charter - a move the Department of Mineral Resources (DMR) said it would oppose.

The council yesterday said that it had delayed bringing the application in the hope that its talks with Mineral Resources Minister Gwede Mantashe to find common ground on clauses in the Charter would bear fruit.

The council’s chief executive, Roger Baxter, said yesterday the application was in line with the lobby group’s previous view that most aspects of the Charter were reasonable, but it did not fully recognise the continuing consequences of previous empowerment transactions.

“Not only does this provision, in particular, have a severely dampening effect on the attractiveness of mining in the eyes of investors, but it is also, in our view, a breach of the declaratory order on the matter issued by the North Gauteng High Court in April,” Baxter said.

The council’s decision comes as the six-month time limit for bringing judicial review applications in terms of section 7(1) of the Promotion of Administrative Justice Act lapsed on Tuesday.

It said negotiations with the department have thus far failed.

The declaratory order issued by the court recognised the continuing consequences of previous Black Economic Empowerment ownership transactions and acknowledges the "once empowered, always empowered" principle.

The DMR described the application as unfortunate and said it would file its responding papers in due course.

It also warned of the dire consequences of the judicial review.

“Delaying the implementation of the Charter will impact negatively on the positive climate characterising mining and economic investment at present,” the department said. “Such delays will also halt the realisation of the much-needed benefits for the workers and the mining communities.”

The DMR said under Mantashe, it had worked tirelessly to improve relations between the industry and other stakeholders, contributing to policy and regulatory certainty.

“Approaching the courts implies a conflictual relationship, that requires intervention by an external party; yet we could - collectively - find the solution,” said the DMR.

The council said it wanted the charter to recognise the continuing consequence of the so-called "once empowered, always empowered" principle that allows past empowerment deals to be claimed by companies even after the empowerment partners have disposed or diluted their ownership.

Council vice president Neal Froneman said the application was the last resort and was necessary to maintain regulatory certainty.

“We had no option but to cover our legal position by lodging papers. We went as far as providing the Department of Mineral Resources with three legal opinions, showing that the charter is wrong. Investments have been made for the long term based. The Charter cannot come out and override that,” Froneman said.

Peter Leon, co-chairperson and partner at Herbert Smith Freehills, said the Charter, as currently drafted, did not extend the protection of historical BEE transactions to the renewal and transfer of rights.

“This is obviously prejudicial to mining companies whose rights expire in the short term or who are planning to sell their rights. It is clear that the Minerals Council’s attempts to engage the Department of Mineral Resources on these issues over the last six months have come to naught,” Leon said.

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