New changes to the Broad-Based Black Economic Empowerment (B-BBEE) Charter for the South African Mining and Minerals Industry (Mining Charter for short) have been made to strengthen its effectiveness and bring about regulatory certainty. The Charter, which was first set up in 2002, served as an instrument through which the Minerals and Petroleum Resources Development Act (MPRDA) could fuel transformation in the industry. This third iteration of the Charter aims to take the next steps in driving shared value within the South African mining ecosystems, while continuing a journey of redressing historic inequalities inherited by South Africa’s first democratic Government. Minerals Minister Gwede Mantashe recently announced that the latest charter has been gazette. Along with this, Mantashe also announced that a formal request has been submitted to the Speaker of the National Assembly and the National Council of Provinces chairperson for the withdrawal of the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill. The Amendment Bill will be replaced by a new legal framework dedicated to the sustainable development of the petroleum and gas sectors.
According to Mantashe, this Charter is “an important contributory element to efforts aimed at stimulating the economy”. The aims of this Charter include creating regulatory certainty, sustainable growth and a competitive and transformed mining industry. Here are some insights of the Mining Charter (III).
Key insights:
While elements of ownership and mine community development are “ring-fenced” and require full compliance, there have been other changes made. To entrench regulatory certainty for investors and to provide security of tenure for investments, an existing mining right holder who achieved a minimum of 26% is recognised as compliant for the duration of the right. This, the Minister pointed out, includes a right holder whose black economic empowerment (BEE) shareholder has since exited. This recognition, however, is not applicable upon renewal, and is not transferable to a new owner in the case of a transfer or sale. There will be a minimum of 30% BEE shareholding requirement for a new mining right. This 3-% will be distributed through a minimum of 5% nontransferable carried interest to qualifying employees; a minimum of 5% nontransferable carried interest to host communities, or a minimum 5% equity equivalent benefit; as well as a minimum of 20% effective ownership in the form of shares to a BEE entrepreneur, 5% of which must ideally be for women. There are a host of other amendments and additions made to the Charter. All changes will be applicable when the Mining Charter comes into effect in 2018. Currently pending applications are thus still held to the 2010 Charter outline.
Want to find out more about the new Mining Charter? Check out this infographic.
[Source: Daily Maverick – https://goo.gl/aKLdWP]
[Source: Mining Weekly – https://goo.gl/mxwibC]
