Sibanye CEO says the burning planet is driving company’s green metals drive

Sibanye-Stillwater CEO Neal Froneman on the sidelines of the Joburg Mining Indaba that climate change was driving its expansion into green metals. And, with a possible global recession looming, he sees opportunities to scoop up more assets in that space.

By Ed Stoddard 

Sibanye-Stillwater CEO Neal Froneman, like most mining executives, is often directed by science. You don’t find metals with a divining rod. And with Johannesburg baking in October, he said climate change was the key driver of Sibanye’s current investment strategy of taking a deep dive into the battery metals seen as crucial to the green transition from fossil fuels. 

“There is so much evidence of intense and changing weather patterns across the world. Just look at the UK a few weeks ago, heat wave. Look at Europe, the Rhine River getting too low to transport material,” Froneman said in an interview on the sidelines of the Joburg Mining Indaba, organised by Resources For Africa.

Held at the Inanda Club, the polo ground outside was fading from green to reddish dirt as it shrivelled under the unrelenting sun and dust swirled from the stables.

Froneman also noted the flooding around the company’s Stillwater platinum group metals (PGM) operation in Montana earlier this year which disrupted production there for seven weeks.

“That was a one-in-500-year climate event,” Froneman said. “Climate change is real and we can’t risk not doing anything about global warming. This is where our vision, our purpose comes in terms of providing green metals to support the reversal of climate change.”

Policy is also driving change as governments around the world legislate and regulate to curb emissions, boosting demand for the metals needed to make such goals a reality.

Among other moves on this front, Sibanye recently completed a series of transactions to secure an 87% stake in Keliber Oy, a Finnish lithium project. Keliber aims to be the first fully integrated lithium producer in Europe, supplying about 15 000 tonnes of lithium hydroxide monohydrate per annum into the European battery industry.

On the expansion into green metals, Froneman said: “We have not stopped and PGMs are part of the solution, they are green metals in their own right. What we are doing now is expanding the portfolio to include battery metals. With PGMs, we have a very solid base, we can look out 50 years on our production profile.”

Froneman said that Sibanye sees more green metals acquisitions in the pipeline. 

“We believe the recession will create opportunities,” he said, referring to growing concerns that a confluence of events including rapidly rising interest rates worldwide to contain inflation was tipping the global economy into recession. 

“We believe next year we will be in a fairly deep recession and we’ve kept our balance sheet strong with a view to being able to take advantage of that situation,” he said.

By that, Froneman meant that asset prices should become cheaper because of the sour global economy, providing an opportunity for a company with the means to snap some up. At the end of June this year the company had more than R27-billion in cash on hand.

In the space of the decade since Sibanye began life as a Gold Fields’ spin-off mining the latter’s deep-level and labour-intensive gold mines in South Africa, a lot has changed.

Climate change was high on the agenda then, but green metals were seldom spoken of and ESGs — environmental, social and governance concerns — were just starting to take root in global corporate discourse. They have since grown into almost an industry in their own right as our burning planet sizzles.

Climate change is now a key driver of mergers and acquisitions activity. Expect to see a lot more and not just from Sibanye, because the race is on in a new and frantic resource scramble. 

Article courtesy of Daily Maverick

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ABB Ability™ eMine drives energy transition in the mining industry

Mining houses are confronted with the same energy transition as other industries and have an urgent responsibility to transform the way they mine through technological change.

By Erik Pretorius, Head of Sales: Africa and Australia, ABB

It is clear that the energy needs of the modern mine simply cannot be met sustainably with diesel machinery alone. There has to be a transformation and ABB is committed to working with mines to bring about that transformation.

We care deeply about the health, safety, and well-being of our planet as much as we do the people who inhabit it. Our vision is for CO2-free and energy-efficient mines to help combat climate change, creating sustainable progress for today and future generations. We work hand in hand with our clients and partners to convert existing mines from fossil fuel energy to all electric. In this way, ABB can assist the mining industry to meet its sustainability goals, while staying competitive and ensuring high productivity.

ABB Ability eMine™ makes the all-electric mine possible, with fully integrated electrification and digital systems from mine to port. The solution includes a portfolio of electrification and digital systems to accelerate decarbonisation in the mining sector. We support the mining industry from the early mine design stage to convey the full benefit posed by electrification, assisting with designing the hauling process to optimise it with electrical solutions that match mine constraints and help meet production targets.

The solution also focuses on supplying power to mining vehicles, with fit-for-purpose electrification to achieve the most optimised electrified process. In addition, the solution integrates with ABB Ability™ applications to plan, monitor, and control processes to optimise operations and energy usage.

A key component of keeping the all-electric mine running is ensuring that the equipment performs when required and that trucks can charge when they need to. We provide charging station solutions to meet the needs of modern mining operations and interface with all vehicles. eMine™ is vehicle type and OEM agnostic in that it supports an interoperable approach based on proven standards to provide any solution needed to charge battery electric vehicles (BEVs).

A new pilot innovation known as ABB Ability™ eMine™ FastCharge is set to become the world’s fastest and only fully automated charging system for haul trucks, offering up to 600 kW of power. Designed for the harshest environments, this flexible system can be easily installed anywhere to charge a truck without human intervention, and at the highest power on the market today to minimise downtime.

The solution includes ABB Ability™ eMine Trolley System technology to reduce diesel consumption by up to 90% while haul trucks are on a trolley system, which also reduces energy costs and environmental impact. In addition, electrified trucks run at a higher speed for a better speed-on-grade. Current trolley technology is based on diesel hybrids and can be supported by ABB’s Trolley System to assist with the successful transition to an all-electric mine. The system is ideal for heavy-duty vehicles such as those used for inclined hauling, an application that battery-only solutions cannot cater for at present.

We are committed to create sustainable progress for today and future generations by helping our mining clients through their energy transition. ABB Ability™ eMine makes the all-electric mine possible, with fully integrated electrification and digital systems from mine to port. From design to ongoing service, ABB is the partner that can transform today’s mine operations while improving the world beyond them.

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Reliable power solutions light the way for mining

Load shedding and power cuts are dominating all aspects of life, and many businesses and industries are looking at innovative ways to reduce their dependency on grid power, increase productivity, reduce operating costs, and be gentler on the environment. This is a monumental but not impossible task for South Africa’s mining industry which is making the switch and investing in renewable solutions. Financial services company, Deloitte, notes that energy is one of the biggest expenses for mining companies, constituting approximately 30% of total operating costs.1

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The mining of crypto assets has complex income tax and VAT implications

By Joon Chong, Partner at Webber Wentzel

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Over 75% of bitcoin miners’ income is going to electricity costs

Elizabeth Kerr

Bitcoin (BTC) mining is central to the sustenance of the BTC ecosystem. Besides enabling verification of transactions, it helps secure the network. The activity is so critical that the BTC network incentivises miners in the crypto through the miners’ reward. That said, it is proving to be expensive, with miners having to dig deep for electricity costs.

CryptoMonday has been studying data on BTC mining. The site concludes that miners’ incomes are dwindling owing to soaring electricity costs. It reckons that over 75% of BTC miners’ income goes to meeting electricity costs.

Jonathan Merry, CryptoMonday’s CEO, has been discussing the data.BTC mining is a very electricity-intensive process. A study has shown that a single BTC transaction consumes about 2165 kWh of electricity. That’s what a regular American household would use in 74 days! Factor in the roughly $0.14/kWh that an average household pays, and the magnitude of expenditure becomes evident.Jonathan Merry

BTC’s Proof-of-Work Consensus (PoW) Conundrum

One of BTC’s core features, its proof-of-work (PoW) consensus mechanism, is also every miner’s headache. PoW requires them to solve complex equations for a share of newly mined coins. The equations require the use of specialized mining equipment with high computational power. The equipment consumes tons of kilowatt-hours (kWhs), ballooning the miners’ electricity bills.

BTC’s mining difficulty further compounds the situation. BTC gets its value from its scarcity. Thus the system makes it progressively difficult for miners to complete their tasks. This forces miners to invest in mining equipment with even higher computational ability. And as indicated earlier, these come with hefty power bills.

BTC’s Carbon Footprint

PoW has also come under criticism for its environmental footprint. Critics hold that it is a wasteful and unsustainable crypto for the universe. Again, studies have shown its carbon emissions to match those of entire nations. One of them estimates that BTC emits nearly 114 megatonnes of CO2 annually, a value comparable to Czech Republic’s.

Such figures raise concerns about the king crypto’s sustainability. Bitcoin is hardly mainstream, but it’s already registering a significant carbon footprint. That reality is what’s worrying its opponents. They claim that the broader adoption of the coin would significantly impact the global environment negatively.

Addressing BTC Energy and Environmental Concerns

Despite strong opposition from some quarters, BTC enthusiasts still believe in the crypto’s value. They hold that notwithstanding the environmental concerns its usage raises, humanity has a lot to benefit from its wider adoption. They further contend that BTC’s footprint is lesser than that of the traditional banking systems or idling appliances at home.

Besides, Bitcoinners hold that the industry is still in its infancy. As such, one would expect heavy investment in machines, some of which may be inefficient. But with its maturing, there’s bound to be an evolution of the mining equipment to make them energy efficient.

Greening Bitcoin

Moreover, some miners have made the switch to fully renewable energy sources. Others are in different stages of that transition. Transiting to greener and affordable alternatives should help allay environmentalists’ fears.

Other quarters have suggested a complete shift to a less energy-intensive consensus mechanism. One of the popularly touted ones is Proof-of-Stake (PoS). PoS is less energy and hardware intensive and will allow verification of transactions on everyday appliances like phones and PCs.

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President Cyril Ramaphosa: 2022 Investing in African Mining Indaba

10 May 2022

Keynote Address by President Cyril Ramaphosa at the 2022 Investing in African Mining Indaba, Cape Town International Convention Centre

This Mining Indaba is taking place at an important moment in the global recovery from the effects of the COVID-19 pandemic.

Across the world, almost every industry is having to adapt to new circumstances, confront new challenges and be prepared to seize new opportunities.

The mining industry in Africa is no different.

As it responds to the effects of the pandemic, the mining industry also needs to manage the risks and potential benefits of rapid technological change, shifting market demand, climate change and geo-political uncertainty.

Like all other industries, the pandemic caused significant disruption to mining operations.

But once again, the industry has shown its resilience.

In South Africa, mining registered growth of 11.8 per cent in 2021, the highest across all industries. Last year the sector recovered production to almost pre-COVID levels.

This was the result of significant collaboration between the Department of Mineral Resources and Energy and the Minerals Council South Africa, including efforts to keep the sector operational during the hard lockdowns in the pandemic’s early stages.

After more than 150 years, mining remains a critical pillar of our economy.

Mining is a significant contributor to export earnings, it is an important source of foreign direct investment, and directly employs nearly half a million people.

And we expect mining’s significance and contribution to our economy to grow.

Like many other parts of our continent, our country is abundantly blessed with vast mineral deposits that form the basis of the most important applications used in society and economies today.

Mining companies see the potential in South Africa.

At the fourth South Africa Investment Conference earlier this year, investments valued at around R46.5 billion were pledged towards mining and mineral beneficiation.

Despite the great prospects for South African mining, we face significant challenges.

It is a matter of grave concern that South Africa has fallen into the bottom 10 of the Fraser Institute’s Investment Attractiveness Index rankings.

We are currently standing at 75th of 84, which is our worst-ever ranking.

This ranking underlines the fundamental reality that South Africa needs to move with greater purpose and urgency to remove the various impediments to the growth and development of the industry.

We understand very clearly the need to fix to the regulatory and administrative problems.

We need to clear the backlog of mining and prospecting rights and mineral rights transfer applications, put in place a modern and efficient cadastral system, and implement an effective exploration strategy.

We understand very clearly the need to significantly improve the functioning of our railways and ports, and the vital importance of ensuring a secure and reliable supply of affordable electricity.

These tasks are at the forefront of our economic reconstruction and recovery efforts.

Since the last Mining Indaba, we have made significant headway in driving a programme of policy reform for the network industries that are inextricably tied to mining and its operations.

This programme is being coordinated through Operation Vulindlela, an initiative of the Presidency and National Treasury, working in partnership with the Department of Mineral Resources and Energy and other departments.

An important area of progress is regulatory reform to facilitate new electricity generation by the mining and other sectors.

Regulations have been amended to allow companies to invest in new generation capacity of up to 100 MW without needing to apply for a license.

We are working to further cut red tape for the registration of projects, to accelerate environmental approvals and to strengthen the capacity of Eskom and municipalities to link such projects to the grid.

According to the Minerals Council South Africa, around 4,000 MW or R65 billion of such electricity generation capacity investment is in the pipeline.

South Africa’s energy landscape is being fundamental transformed to introduce greater competition, more diverse energy sources and greater energy security into the future.

The unbundling Eskom into separate entities for transmission, distribution and generation is on track, and is set to be completed later this year.

Operation Vulindlela is working with the Department of Water and Sanitation to implement a turnaround plan for the issuing of water use licenses, something that is critical to mining operations.

We are working towards a target of 80 per cent of all applications being resolved within 90 days.

On Transnet, the publication of the White Paper on National Rail Policy outlines our plans to revitalise rail infrastructure and to enable third party access to the freight rail network.

We have heard the calls from the industry for private operators to be allowed to operate the country’s dedicated coal, iron ore and manganese lines. 

We hope that such proposals will be discussed at the Indaba, drawing on the experiences of other countries.

Working together with the industry and other stakeholders, we are strengthening the capacity of our security services and law enforcement agencies to tackle illegal mining, cable theft and general damage to infrastructure.

We value our ongoing collaboration with the Minerals Council South Africa to resolve these and other challenges facing the industry.

According to companies surveyed by the Minerals Council if these regulatory hurdles could be resolved, they would be prepared to increase their investments by 84 per cent over the next five years, over and above existing capital investments.

We are committed to mobilising the necessary resources and providing the necessary incentives for a new wave of exploration, particularly of the minerals required for the global energy transition.

The recently-released Exploration Strategy and Implementation Plan lays out South Africa’s plans to move to future strategic metals such as copper, nickel, cobalt and rare earths.

As a world leader in platinum group metals, South Africa is perfectly poised to take advantage of the growing demand for such metals.

At the same time, we must continue to expand the production of some of the minerals that have been the mainstay of our mining industry, and for which there is still much demand.

We are keen to harness the opportunities of the hydrogen economy.

Last week, I attended the launch by Anglo American of the world’s largest hydrogen-powered mine haul truck.

This truck will be powered by an entire ecosystem of hydrogen production centered around the mine itself.

We aim to be not only an important hub for the production and export of green hydrogen, but also of green ammonia, green iron and steel, and sustainable aviation jet fuel.

South Africa’s Hydrogen Strategy is aimed at stimulating and guiding innovation along the value chain of hydrogen and fuel cell technologies.

This will not only sustain demand for PGMs but also position South Africa to derive benefits from supplying high value-added products.

As a continent that has such a rich abundance of resources, Africa needs to beneficiate its mineral endowments for the benefit of the current and future generations.

Mining has an important role in South Africa’s just energy transition.

In our onward march towards a low-carbon future it is critical that our efforts are both realistic and sustainable.

We have resuscitated the successful Renewable Energy Independent Power Producers Procurement Programme, with plans to substantially upscale investment in wind and solar power.

We are diversifying our energy mix under the Integrated Resource Plan.

We have supporting legislation to mitigate and adapt to climate change.

In line with our just transition efforts, we are in the process of mobilising international finance as part of the effort to ensure that affected communities and existing industries are supported.

It is clear that as our reliance on coal is reduced, pathways towards new economic activity needed to be created for workers in affected industries.

As we confront the reality of energy insecurity and the development of new energy sources, it is critical that South Africa, like all developing economies, be given the necessary developmental space.

Countries on the African continent need to be able to explore and extract oil and gas in an environmentally-responsible and sustainable manner.

These resources are important for energy security, for social and economic development, and for reducing energy poverty on the continent.

It is important that as we undertake a just energy transition, we adhere to the principle contained in the UN Framework Convention on Climate Change of common but differentiated responsibilities and respective capabilities.

The growth and development of mining in South Africa will not be possible unless the working and living conditions of mineworkers and mining communities are improved.

It is important that mining companies engage with labour in the spirit of partnership and cooperation.

It is vital that mine safety and the health of workers becomes the industry’s foremost concern. On this there can be no compromise.

I wish to comment the mining sector for the financial and logistical support it has given to the roll-out of South Africa’s COVID-19 vaccination programme.

As of the start of May, more than 75 per cent of mineworkers were fully vaccinated, and 66 per cent were partially vaccinated.

Drawing on its extensive experience with managing other communicable diseases such as TB and HIV, the mining sector has been able to manage the pandemic carefully and systematically.

The partnership between government and the Minerals Council of South Africa stands as a fine example of how the private sector can support a nation’s development agenda.

In undertaking its vaccination programme, the mining industry has also demonstrated its responsibility to the communities in which its operations are located.

It is important that this commitment is sustained in all areas of development, including through the effective implementation of Social and Labour Plans, responsible environmental practices and local procurement.

The future of mining on the African continent holds great promise.

It holds great promise for investment, for industrial development and for growth.

We have a shared responsibility – as governments, as mining companies, as labour and as communities – to realise that promise.

As the government of South Africa, we are firmly committed to fulfil our responsibilities and to remove all impediments to the growth, sustainability and prosperity of the mining industry.

We are firmly committed to ensuring that mining occupies its rightful place as an industry of the future.

I thank you.

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ICMM Members Commit to Consistent Reporting on Social and Economic Contribution

The International Council on Mining and Metals (ICMM) has published a new Social and Economic Reporting Framework which commits members to report against a set of social and economic indicators, empowering stakeholders such as communities, governments, and investors to assess the contribution of mining to social and economic development more easily.   

ICMM members, representing around a third of the industry, have committed to report on eight key indicators which includes country by country tax reporting on revenues, payment and tax, workforce composition, pay equality, wage level, training provided, local procurement, education and skills programmes, and capacity building.

This disclosure will also help companies to better assess and strengthen the delivery of their social and economic contribution programmes, and provide a clearer overview of the contribution mining is making to economic growth, employment, skills, health, education and a range of other development opportunities in the regions close to their operations. 

Rohitesh Dhawan, CEO, ICMM said: “Mining plays a significant role in driving social and economic development in the regions where it takes place. What has been missing until now is a consistent set of indicators that measure these contributions, like for like. ICMM’s Social and Economic Reporting Framework raises the bar in several areas including the disaggregation of data by gender and ethnicity, and reporting of employee wages compared to the local living wage. This commitment represents a major step forward, and I encourage all mining companies to adopt the Framework to provide a more complete picture of the industry’s social and economic contribution and collectively identify areas for improvement. 

We recognise that there is still more to do to measure, prevent and manage the negative impacts mining activities can have on local communities. We will continue to work closely with stakeholders to assess the potential evolution of the Framework so that we can build on the data already being provided to give a clear picture of our members’ performance.”

Chris Griffith, CEO Gold Fields, said: “Along with other ICMM members, Gold Fields was actively involved in the development of the Framework as we believe the reporting of social and economic indicators is critical to help provide a clear picture of the contribution we make. This transparency is key to winning the trust of our stakeholders, particularly host communities and governments. We are already aligned with several of the indicators – as reported in our annual Report to Stakeholders – and are working towards disclosure against the full Framework.”

The Framework was developed through an assessment of existing reporting frameworks and company practices relating to social and economic contribution. It was informed by consultation with a range of external stakeholders including investors, civil society, customers, and international organisations and tested at sites by ICMM members. It builds on existing frameworks such as the Global Reporting Initiative (GRI), thereby ensuring a streamlined approach to reporting. Where indicators were not available in existing frameworks, new ones have been developed and included in the Framework.  

ICMM members have already started the work needed to incorporate these indicators into their reporting systems and are committed to disclose against the indicators by 2024, except for country-by-country tax, for which reporting is expected from 2025.

Rohitesh Dhawan will be moderating a panel at African Mining Indaba, where ICMM Council member Chris Griffith (Gold Fields CEO) and Anglo American South Africa Chair Nolitha Fakude will discuss mining’s overall contribution to society, the importance of consistent reporting on contribution, and how transparent reporting will help to build trust across the sector.

  • You can view the Social and Economic Reporting Framework and Guidance here

READ MORE: CARBON TAXATION FOR MINES

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Equipment supplier is moving with the times

ELB Equipment is taking a hands-on approach to solve rapidly evolving needs of customers in the mining and construction industries where access to finance and longer lifespans of equipment are among the many issues being faced by operators of equipment in post-pandemic times.

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Investing in African Mining Indaba 2022

Investing in African Mining indaba is solely dedicated to the successful capitalisation and development of mining interests in Africa.

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High Court Ruling on Mining Charter 2018: “Once Empowered, Always Empowered”

Once empowered [is] always empowered [after all] – this is the effect of the judgment handed down by the High Court, Pretoria on 21 September 2021 in the matter between Minerals Council of South Africa vs Minister of Mineral Resources and Energy and thirteen others [Case No.20341/19] (the “Judgment“) in relation to the challenge to the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (“Mining Charter III“).

The Minerals Council of South Africa instituted its application to review and set aside certain provisions of the Mining Charter III (the “Review Application“) in terms of section 6(2) of the Promotion of Administrative Justice Act, 2000, alternatively in terms of the principle of legality as set out in the Constitution on the basis that:

  • the Minister of Mineral Resources and Energy (“Minister“) lacks the power to publish Mining Charter III in a manner that suggests that it is a legislative instrument, and doing so amounted to the Minister assuming the functions of the legislature;
  • the clauses are unauthorised by section 100(2) of the Minerals and Petroleum Resources Development Act, 2002 (“MPRDA“) and therefore the decision to publish them as part of Mining Charter III was materially influenced by an error of law.

A copy of our bulletin on the salient features of the Minerals Council’s challenge is available here.

The High Court Judgment

The full bench of the High Court (Gauteng Division, Pretoria) characterized the question in dispute that had to determined as concerning the ambit of the powers of the Minister under section 100(2) of the MPRDA to make law in the form of subordinate legislation, and the legal nature and role of the Mining Charter III in the context of the MPRDA. Therefore, at issue, was whether the Mining Charter III constitutes law or policy.

The Minerals Council contended that the Mining Charter III is a formal policy document developed by the Minister in terms of section 100(2) of the MPRDA. To this effect, it argued that the Mining Charter III is binding on the Minister whenever he considers an application for a mining right by virtue of the provisions of section 23(1)(h) of the MPRDA. This provision only permits the Minister to grant a mining right if, amongst other things, the grant of such right would be in accordance with the charter contemplated in section 100(2) of the MPRDA.

To the contrary, the Minister argued that section 100(2) of the MPRDA empowers him to make law through the development of the Mining Charter III, hence that the charter (which he developed) constitutes a sui generis form of subordinate legislation which is directly binding on holders of mining rights.

Kathree-Setiloane J (with Van der Schyff J and Ceylon AJ concurring), held that having considered the language of section 100(2) of the MPRDA in light of its ordinary meaning, the context in which it appears and the apparent purpose for which it is directed, section 100(2) of the MPRDA does not empower the Minister to make law.  In other words, the Mining Charter III is not binding subordinate legislation but an instrument of policy.

Therefore, in its decision, the High Court held that the Mining Charter III is a policy document and not law; and that such finding is dipositive of the main grounds of review that the challenged clauses of the Mining Charter III are unconstitutional because the Minister lacked the power to publish a charter in the form of a legislative instrument binding upon all holders of mining rights, the breach of which will be visited by the consequences and penalties provided for in the MPRDA.

Accordingly, the clauses of the Mining Charter III as challenged by the Minerals Council in the Review Application are reviewed and set aside.

Implication of the Judgment

The Judgment set aside a number of clauses in the Mining Charter, including amongst others:

  • clauses 2.1.1.2, 2.1.1.4, 2.1.1.5 and 2.1.1.6, which provided that the recognition of continuing consequences will not be applicable upon the renewal and/or transfer of a mining right and that a renewal of an existing mining right will be subject to the requirements imposed under Mining Charter III at the time when the renewal application is submitted (i.e. 30% BEE shareholding);
  • clause 2.1.3.2, which required that the minimum 30% BEE shareholding for new mining rights must comprise of a minimum of 5% non-transferable carriedinterest to each of Qualifying Employees and Host Communities, and a 20% effective ownership to BEE entrepreneurs (5% of which must preferably be owned by women);
  • clause 2.1.5.2, which provided that the prescribed minimum 30% target shall apply for the duration of a mining right;
  • clause 2.1.7.1, which permitted a mining right holder to claim the beneficiation equity equivalent against a maximum of 5 percentage points of a BEE Entrepreneur shareholding only;
  • clauses 2.2, which dealt with the provisions of Mining Charter III in relation to inclusive procurement, supplier and enterprise development targets;
  • clause 7.2, which provided that for mining right holders, the ownership and mine community development elements are ring-fenced, requiring 100% compliance at all times;
  • clause 9.1, which dealt with the penalty and enforcement provisions of the Mining Charter III in case of non-compliance.

Therefore, mining right holders who, at any stage during the existence of their mining right achieved a minimum of 26% BEE shareholding, and whose BEE partners exited prior to the commencement of Mining Charter III, will be recognized as compliant with the BEE requirements of the Mining Charter for the duration of the mining right; and such recognition does not lapse on the renewal or on the transfer of the mining right (the so called “once empowered always empowered” principle).  In other words, existing mining right holders’ historical BEE transactions will be recognised for the purposes of the renewal and transfer of existing mining rights and the applicant for renewal or the transferee, as the case may be, will not be required to comply with the BEE ownership requirements applicable to new mining rights.

Although applicants for new mining rights are still required to have a minimum of 30% BEE shareholding, such 30% BEE shareholding does not need to comprise of the 5% (minimum) non-transferable carried interest to each of Qualifying Employees and Host Communities, and a 20% effective ownership to BEE entrepreneurs (5% of which must preferably be owned by women).  Mining right holders are free to structure their BEE shareholding as they deem fit.

Moreover, non-compliance with the ownership and mine community development elements of Mining Charter III will no longer render a mining company in breach of the MPRDA, and subject to the provisions of section 93, read with section 47, 98 and 99 of the MPRDA. Accordingly, non-compliance with the Mining Charter III will not render a mining right subject to suspension and/or cancellation in terms of the MPRDA.

Conclusion

It must be noted that not all of the provisions of the Mining Charter III were reviewed and set aside. These clauses include amongst, that new mining rights must have a minimum of 30% BEE shareholding, the clauses which concern employment equity, human resource development, mine community development, and housing and living conditions. Given that the Court held that the Mining Charter III is a policy document rather than a legally binding instrument, mining right holders may, but are not legally obliged to, comply with the remaining requirements imposed under the Mining Charter III.  

It must be noted further that section 23(6) of the MPRDA provides that a mining right is subject to the terms ‘prescribed’ by the Minister. Section 23(6) of the MPRDA requires the holder of a mining right to comply not only with the terms and conditions of its right, but also the ‘prescribed terms and conditions’. The term ‘prescribed’ is defined in section 1 of the MPRDA to mean prescribed by regulation. In terms of section 107 of the MPRDA, the Minister may make regulations regarding “any other matter the regulation of which may be necessary or expedient in order to achieve the objects of this Act”. In light of the above, the Court indicated that the Minister is entitled to prescribe any regulations in order to achieve the objects set out in sections 2(c), (d), (e), (f) or (i) of the MPRDA.

Moreover, it is open to the Minister to impose elements of the Mining Charter III indirectly, through incorporating the principles as terms and conditions of a mining right.

As at the date of this bulletin, none of the respondents had yet to indicate whether they will appeal the judgment. 

 Courtesy: FASKEN

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