The very tricky issue of ownership in terms of the Mining Charter – Bringing the courts into the action

After extensive discussions, the honourable Minister of Mineral Resources, Advocate Ngoako Ramatlhodi, and the Chamber of Mines, have agreed to seek assistance from the High Court to clarify the position regarding the requirement of 26% black ownership of mining companies in terms of the Mining Charter.  The matter will be referred to the High Court, for a declaratory order. 

The key aspect for consideration is the divergent view regarding the ownership provisions in the Mining Charter, with the Department of Mineral Resources contending that, as of January 2015, mining companies must be 26% empowered, while the mining companies are of the view that the "once empowered always empowered" principle applies, and that historical empowerment transactions should be taken into account.

The ownership aspect has come under the spotlight, not only because the deadline has come and gone (December 2014), but also based on the results of the recent audit carried out by the Department of Mineral Resources on compliance with the Mining Charter.

Ensuring certainty on the matter is absolutely critical and in my view, the agreement to refer the matter to the High Court, for interpretation, demonstrates a sensible and mature approach that could have a material impact on one of the key challenges facing the South African Mining Industry, namely regulatory certainty. There are contrary views and it will be interesting to see how this plays itself out over the next few months.

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