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Parliament Briefed on High Court Ruling on Mining Charter

December 2, 2021

Department of Mineral Resources and Energy

The portfolio committee on mineral resources and energy plans to consult with affected stakeholders on the recent Gauteng North High Court judgement that reviewed and set aside some clauses of the Mining Charter.

The mineral resources and energy department briefed the committee on the implications of the judgement last week.

The Mining Charter was published in 2018.

In March 2019, the Minerals Council of South Africa sought to review key transformative elements of the Mining Charter by instituting judicial review proceedings in the Gauteng North High Court.

On 21 September 2021, a Full Bench of the Court reviewed and set aside key elements of the Mining Charter.

During the briefing, the department pointed out that the Court declared that the Mining Charter is a policy instrument and not binding legislation or sub-ordinate legislation.

The Court also held that section 100(2) of the Mineral and Petroleum Resources Development Act does not empower the mineral resources and energy minister to make law.

According to the department, key clauses of the Mining Charter were reviewed and set aside.

Key aspects flowing from the judgment include recognitions of the ‘once empowered always empowered’ principle; removing the re-empowerment obligation on existing mining right holders upon renewal or transfer of rights; removal of procurement, supplier and enterprise development targets and no penalty and enforcement provisions for non-compliance.

Implications of the judgement include that the achievement by existing mining right holders of 26% HDSA ownership target shall be recognized for the duration of the mining right, even where the HDSA shareholding subsequently falls below the 26% threshold; applications for renewal or transfer of mining rights shall not trigger a re-empowerment obligation on existing or new mining right holders and new mining rights must have a minimum of 30% BEE shareholding, but the 5% carried interest distribution for communities and employees respectively, as well as the equity equivalent benefit requirement to host communities, have been reviewed and set aside.

Clause 2.2 on procurement and supplier and enterprise development has also been set aside.

The department decided to not appeal the judgement.

It also declared that it will continue to implement the judicially reviewed Mining Charter in line with the High Court judgment.

The department plans to draw up and seek to table in parliament the required legislative amendments to achieve transformation and legal certainty.

In a statement, the committee declared that the “judgement affects many stakeholders, particularly historically disadvantaged individuals who stood to benefit from the Mining Charter’s transformation agenda”.

The committee plans to meet with affected stakeholders in the first quarter of the 2022/23 financial year.

The committee holds the view that the department should have appealed the judgement.