[South Africa] Mining charter ‘silent’ on crucial ownership issue – by Liesl Peyper (Miningmx – April 1, 2015)


[miningmx.com] – SOUTH Africa mines minister, Ngoako Ramatlhodi, made the best of a very bad situation when he said yesterday he would allow the High Court to rule on the ‘once-empowered, always-empowered’ principle in the Mining Charter.

“It was a good PR exercise on behalf of the Department of Mineral Resources (DMR),” said Nicola Jackson and Eric van den Bergh, both partners at law firm Fasken Martineau’s global mining group.

“His announcement sends the right message to current (and future) industry stakeholders that the DMR values the participation of the industry players, and that it’s cognisant of the ramifications of the ‘once-empowered, always-empowered’ principle not being applied.”

Jackson and Van den Berg said that despite the practical issues that lie ahead, it was a good call for Ramatlhodi to look to the courts for clarification on the ‘once-empowered, always-empowered’ matter. “Any other route would only exacerbate the trust issues between government and the sector.”

However, whether Ramatlhodi and his legal team would successfully argue against the contentious principle in court remains to be seen. “It’s difficult [to predict the outcome], because the charter is a very nefarious, nebulous document,” said Chris Stevens, a director at Werksmans Attorneys.

“Apparently the senior council of the Chamber of Mines is of the opinion that this principle does apply, but the charter is silent on whether you need to maintain your empowerment status.”

Stevens’ personal view is that it would be “irrational of government to tell the mining companies they have to maintain their 26% black economic empowerment (BEE) status “forever and a day”.

“It affects mining companies’ marketability of the shares and the equity they hold and I think it’s incredibly unfair on the BEE partner to expect them – if you’ve done a genuine BEE deal – to have maintained their 26% up until the end of 2014.”

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