New Mining Charter

New Mining Charter South Africa

Article by By Sam Mkokeli (Bloomberg) – South Africa will remove a clause from its Mining Charter that includes naturalised citizens in the group of people who should benefit from attempts to more evenly redistribute the country’s mineral wealth.

Mineral Resources Minister Gwede Mantashe is in talks with companies, unions and mining communities on an update to the mining charter after a version published last year by his predecessor prompted legal challenges from the industry. Among the criticisms of the 2017 charter was its recognition of black and other historically disadvantaged people who had taken citizenship after being in the country for long enough

New Mining Charter
Gwede Mantashe speaks during the 54th national conference of the ANC in Johannesburg on December 17, 2017. Photographer: Waldo Swiegers/Bloomberg

Opposition parties suggested that the clause was included to benefit the Gupta family, who are friends with former President Jacob Zuma. The family, which has been accused of using its ties to influence government decisions for their benefit, moved to South Africa in the 1990s and some may have become citizens. Everyone has denied wrongdoing.

“We want to cut out anything that looks suspicious in the charter,” Mantashe said in an interview Tuesday. “We’ll take it out because it attracts attacks on the charter, it sounds like a Gupta clause,” he said.

The reworked mining charter will not be an entirely new document, but will rather be based on the previous paper, Mantashe said.

The Chamber of Mines, which is a lobby group representing producers, said last year that the charter produced in 2017 threatened as many as 100,000 jobs. It agreed in February to postpone a legal challenge to the new rules after President Cyril Ramaphosa, who replaced Zuma in February, pledged to find a solution to the dispute.

1 thought on “New Mining Charter”

  1. Comment Yolanda Torrisi : Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent.

    As Africa’s mining industry awaits imminent release of a new mining charter in its most advanced jurisdiction, South Africa, Sierra Leone has added to the overall uncertainty with a review of mining law and mining contracts appearing certain. A spokesperson for the West African country’s president has told Reuters that he intends following through with campaign promises in this regard to ensure the nation benefits from its natural resources.

    Sierra Leone joins the growing list of African countries heading down this path. It includes Mali, Tanzania, Zambia and the Democratic Republic of Congo, with a number of others making similar noises.

    According to official figures, diamonds, iron ore and mineral sands constitute more than 80% of Sierra Leone’s exports but generate only 15% of its total revenues.

    In an address earlier in May, newly elected President Julius Maada Bio denounced what he said was an “extreme lack of transparency” in the sector under his predecessor Ernest Bai Koroma. He also called for an immediate review of both the 2009 Mines and Minerals Act and the individual licences of mining companies.

    The President’s press secretary told Reuters: “We have to look at these agreements, and we have to look at the laws that govern them. There have been many issues in terms of how concessions were given to mining companies and treatment of workers that people deemed unfair.”

    He said: “We have to remember that mining companies are here for business, to make profit at the end of the day. At the same time, as a government, it’s our job to ensure that they display proper corporate social responsibility and comply with international best practices.”

    Sounds rather familiar as it is similar to other claims made by governments around the continent in recent times.

    Companies operating in Sierra Leone include China’s Shandong Iron and Steel which owns the Tonkolili iron ore project while BSG Resources’ controlled diamond miner Koidu Holdings Ltd is a supplier to Tiffany and Co. Sierra Minerals, which is owned by Dutch industrial group Vimetco NV, runs the country’s only bauxite mine and Australia’s Iluka Resources mines mineral sands via a subsidiary.

    It will be a difficult task for the country to gain more revenue from mining while trying to attract new investment after a long slump in commodity prices stalled mining and exploration projects and sent some companies to the wire. The last thing companies will want to hear is moves to increase government revenue.

    The President’s plans are believed to include new legislation that would consolidate all mining revenues into a single account from which funds could be allocated to health and education projects in mining communities.

    However, at the same time, mining companies may welcome more certainty regarding legislation and proper enforcement of regulations, which could lead to better investment conditions. It is, therefore, a fine line that the government must tread.

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