South Africa Chamber of Mines will go to court over charter ‘negotiated in bad faith’

The Chamber of Mines will approach the courts to interdict the implementation of the Mining Charter, rejecting the “unilateral imposition” of the document — which it had not seen since April 2016 and which had set unachievable and brand new targets, said CEO Roger Baxter.

The chamber has instructed its lawyers to approach the court to restart the process to seek a declaratory order around the continuing consequences of past empowerment deals, something the new charter ignores.


The chamber wanted to use the court process to bring the department back to the chamber to reopen talks around the charter, but was fully prepared to follow its rights as far as the Constitutional Court, said deputy president Steven Phiri. 
The minute an interim interdict was granted in favour of the chamber against the charter, the document would cease to be in effect, allowing a legal process to unfold as well as give the department and industry a chance to negotiate elements of the charter, Baxter said.
The new charter obliges mining companies to lift their empowerment ownership levels to 30% within the next 12 months for mining right holders.

The chamber, whose members represent 90% of the value of annual mineral production, said there was insufficient consultation with the industry and there were targets in the charter that could not be met, Baxter said.

The ownership elements in the charter were different from those discussed between the chamber and the department, amounting to “negotiating in bad faith”, he said.
The empowerment ownership level for holders of mining rights was lifted to 30% from 26%, and to 50% plus one for prospecting rights, also from 26%.
The chamber wanted the charter to come under review because not all parties agreed to it and stakeholders such as the chamber were seeing elements for the first time now that it had been implemented, new chamber president Mxolisi Mgojo said.

The gazetting and implementation of the Mining Charter on Thursday, and the backlash from the chamber, added to the scepticism with which investors regarded SA as an investment destination.
If the matter goes into a protracted court process, it will add to the ongoing regulatory uncertainty bedeviling the sector.
The chamber wanted to use the court process to bring the department back to the chamber to reopen talks around the charter, but was fully prepared to follow its rights as far as the Constitutional Court, said Steven Phiri deputy president of the chamber.

The minute an interim interdict was granted in favour of the chamber against the charter, the document would cease to be in effect, allowing a legal process to unfold as well as give the department and industry a chance to negotiate elements of the charter, Baxter said.

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