A COURT case brought by the Chamber of Mines against the Department of Mineral Resources to secure a declaratory order around empowerment provisions in the Mining Charter starts on Tuesday, but the chamber is open to mediation to settle the matter out of court, CEO Roger Baxter says.
The chamber, which represents companies extracts about 90% of SA’s mineral wealth, has turned to the courts to resolve the impasse with the department about whether past empowerment deals that have fallen away should still count towards their transformation credits. The department is vehemently opposed to this, arguing that mining companies must perpetually have a minimum 26% black ownership structure.
While the department under former mining minister Ngoako Ramatlhodi had agreed with the chamber early last year to approach the courts jointly to seek the declaratory order, legal realities set in and the chamber approached the court first to seek the order.
The once-empowered, always-empowered debate has dogged the industry for years and flared up during the 2014 audit of the industry’s compliance with 10-year targets laid out in the charter. Talks between the two parties since March last year failed to resolve the matter out of court despite comments from Anglo American CEO Mark Cutifani that it would be preferable to have the matter settled through talks and new Mineral Resources Minister Mosebenzi Zwane saying in February he was hopeful the parties would not go to court.
Mr Baxter kept the option of resolving the matter out of court alive on Monday, saying both parties had raised the prospect of a mediation process run by a third party, resulting in an agreement that would have to be set down in law to prevent any recurrence of ambiguity or differing interpretations in the charter, which had been revised in 2010.
“The chamber remains open to mediation in parallel with the court process, but any further delays would just create further uncertainty. The process has to, at a particular point, arrive at a set of conclusions that the stakeholders can work to,” Mr Baxter said.
“This is a fundamental interpretation issue in law and we need to get it settled. Ultimately, it does have an impact on the longer-term viability and prospectivity of the industry. “If we don’t get this uncertainty sorted out now, it will lead to continued pressure on investment and it’s very difficult for mining companies to attract capital when there’s lingering uncertainty on this issue.”
More than 2,000 pieces of legislation and more than 3,000 pieces of regulation have been changed in SA since 1994, he said.
“Let’s slow down the legislative changes that keep taking place … and make sure our laws and policies are good and tested by regulatory impact assessments. You can’t keep perpetually changing and think business can keep up. It’s almost impossible.”
The industry, which has created empowerment deals worth R205bn since 2000, needed regulatory certainty to encourage investment, he said.
The department was not immediately available for comment.
Ahead of Tuesday’s hearing, the judge will hear an application by lawyer Hulme Scholes and his firm, Malan Scholes, to combine the chamber’s case with the one brought by them to have the revised charter and original charter declared unconstitutional and void.
If the judge agrees, the chamber’s declaratory order process will stop, but if the decision goes against Mr Scholes, the matter will continue.