Change of heart on mine principle

Mineral Resources Minister Gwede Mantashe’s decision to seek leave to appeal the judgment on the “once empowered always empowered” principle of the mining charter handed down by the court early this month, could be problematic.

The surprise about-turn announced yesterday would not only dampen expectations of a fresh start in the industry since his appointment in February, but would likely throw a spanner in the works in the ongoing consultation of the mining charter, legal experts said yesterday.

“This is will have negative implications for Mantashe’s plan to have Mining Charter 3 finalised by the end of May,” said Peter Leon, a partner at Herbert Smith Freehills.

He said the decision also undermined President Cyril Ramaphosa’s effort to bring certainty to mining. “It will make new investments in South African mining challenging. It is also a huge surprise, following Ramphosa’s announcement of a plan to attract R100billion of foreign direct investment over the next five years.”

The court ruled on April 4 that mining companies that had previously complied with the previous two versions of the mining charter’s minimum requirement of the black share-holding of 26 percent did not need to “top up” if partners had sold their shares.

Mining lobby group the Chamber of Mines confirmed yesterday that Mantashe and the Department of Mineral Resources (DMR) had filed the application.

“The chamber respects the statutory rights of the minister and the DMR to appeal the outcome of the judgment. The chamber is currently reviewing the specified grounds of appeal, although the DMR’s appeal appears to centre on the majority Judges obiter dictum comments about the legality of the 2010 Charter, and the enforceability of the charters.

“The chamber has continued to state that it fully supports the 2004 and 2010 charters, as it was party to developing these charters, and the industry has created substantial transformation through applying these charters.”

Meanwhile, Malan Scholes, a Johannesburg-based law firm, has made a separate application to declare current and previous charters unconstitutional, because they lack definition and are inconsistent.

The Scholes application challenges, among others, the validity of the 2004 and 2010 mining charters. The chamber said it opposed the view that the 2004 and 2010 charters were not valid, and had agreed to join as a respondent to that application.

Mantashe earlier this month told journalists at a platinum indaba held in Johannesburg that the DMR would not appeal the court judgment. SA Mining Development Association chairperson Peter Temane welcomed Mantashe’s decision.

“South Africa is a constitutional democracy. It is any- body’s right to seek leave to appeal a judgment. Why should this be an issue? If the appeal is upheld, it will be good for the transformation agenda,” Temane said.

Meanwhile, the Bench Marks Foundation argued yesterday that the Mineral and Petroleum Development Act was unconstitutional.

Human rights lawyer Richard Spoor, who represents the Bench Marks Foundation, called on the North Gauteng High Court to determine the entitlement for compensation before mining commences.

He was speaking during the first day of the three-day court hearing in which Bench Marks has taken legal steps to get the Xolobeni community from the Wild Coast of the Eastern Cape to have the right to say no to mining on their land. Xolobeni residents have been opposed to the mining of titanium on their pristine sand dunes stretching over 22km of their ancestral land for 12 years.

Their court action has been brought against the MRD and senior officials in the department, the Minister of Rural Development and Land Reform, and Transworld Energy and Mineral Resources (TEM).

“Does the profit of a mining company like TEM, does their commercial interest in mining titanium along the stretch of coastline constitute a sufficient reason to deprive a community of their history, culture, and way of life?” asked Spoor.

Advocate Thembeka Ngcokaitobi, who also represented the Bench Marks Foundation, argued that the government’s argument that withholding communities consent to mining would make mineral rights law sterile.

However, Advocate Maleka, SC, representing the DMR, said that the granting of the right by the minister did not constitute a deprivation of rights.

Former mineral resources minister Mosebenzi Zwane last June declared an 18-month moratorium on mining applications at Xolobeni after the assassination of a community leader in the area, Bazooka Radebe.

-BUSINESS REPORT