Court battle to cause ‘ructions’

THE outcome of the legal battle between the Chamber of Mines and the Department of Minerals,Picture: Getty Images

THE outcome of the legal battle between the Chamber of Mines and the Department of Minerals Resources (DMR) will cause ructions in the industry, whichever side wins, say industry analysts.

The proposed revised Mining Charter stipulates that local mines should be at least 30% owned by black people, up from 26%, something which the industry says is simply unachievable.

The chamber says there was no consultation on the entire revised charter and there is no way that the chamber can accept it without the chance to give input.

Further, the chamber is supporting the element of once empowered always empowered, which the DMR says cannot stand if doors are to be opened for new black players.

The DMR says there would be no black empowerment if white-owned companies which met the ownership requirements previously were allowed to continue after black shareholders exited the B-BBEE deals.

But the chamber argues that companies would continuously be required to initiate and finance new black ownership transactions to remain B-BBEE compliant as black shareholders sold their shares. Mmamokgethi Molopyane, an independent mining analyst, warned that the outcome of the court battles would affect ordinary people, especially mineworkers.

“The impact will always be on the mineworker. There is no doubt that no matter the decision by the high court, the whole thing could lead to a huge mineworkers retrenchment,” Mmamokgethi said.

Some argued that South Africa’s plan to force mining companies to give the black majority a bigger stake in the nation’s mineral wealth faces a major obstacle, convincing banks to back billions of dollars of fresh deals in an industry in decline. “The charter will have an effect on our ability to finance the mining industry in South Africa,” Ursula Nobrega, a spokesperson for Investec, said.

“We already exercise caution as to who and what projects we finance.”