The 2018 Mining Charter
by Lloyd Christie, Ntsiki Adonisi-Kgame, Carlyn Frittelli-Davies, Otsile Matlou
Published: October, 2018
Submission: October, 2018
The “once empowered, always empowered” principle has been accepted but still in a qualified fashion, which will unfortunately lead to further litigation and legal uncertainty. Existing mining right holders who achieved a minimum of 26% broad-based black economic empowerment (“B-BBEE”) shareholding will be recognised as compliant for the duration of the mining right, implying but without stating expressly that such recognition will lapse upon the expiry of the mining right, suggesting that such a holder will need to re-empower upon renewal. This is unfortunate and renders the 2018 Mining Charter susceptible to legal challenge. The Minister has removed the requirement in the draft 2018 Mining Charter for such holders to “top-up” B-BBEE shareholding to 30% within a period of five years.
Existing mining right holders whose B-BBEE partners exited prior to the commencement of the 2018 Mining Charter will be recognised as compliant for the duration of the mining right and such recognition will not be applicable upon renewal. The requirement to re-empower upon renewal is likely to be challenged on the basis that it is not contemplated in the renewal requirements prescribed in the Mineral and Petroleum Resources Development Act, 2002 (“MPRDA”).
The recognition of continuing consequences of all historical B-BBEE transactions, which formed the basis upon which “new order mining rights” (it is not clear whether converted mining rights have been excluded by omission or design) were granted, will not be transferable and will not apply to:
A pending application lodged and accepted prior to the commencement of the 2018 Mining Charter will be processed in terms of the 2010 Mining Charter (ie, 26% B-BBEE shareholding), subject to the mining right holder increasing B-BBEE shareholding to 30% within a period of five years from the effective date of the mining right.
A new mining right must have a minimum of 30% B-BBEE shareholding distributed in the following manner:
The previous draft version of the 2018 Mining Charter required a share percentage distribution of 8% (ESOP)/ 8% (community trust) / 14% (B-BBEE entrepreneur).
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