Industry to focus on back-to-basics for new Mining Charter – Herbert Smith Freehills

JOHANNESBURG (miningweekly.com) – The South African mining industry has to focus on going back to basics and on why the Mining Charter was created when considering Mining Charter Three, Herbert Smith Freehills partner and Africa cochairperson Peter Leon said on Thursday.

Speaking during a panel discussion that highlighted ways mining companies could manage the unpredictable regulatory environment, at the fifth Joburg Indaba Conference, he said the industry has to reconsider the principles of the latest Mining Charter.

Leon averred that while Mining Charter One was a social compact with government, labour and business, this compact has “gone out of the window” with Mining Charter Three.

“In fact, even in Mining Charter Two there was an erosion of those principles,” he argued, stressing the need for a re-evaluation of why the charter was originally created.

Mineral Investment Advisory Services director Jacinto Rocha, meanwhile, pointed out constitutional and legal problems in the latest charter, noting that aspects, such as the proposed 51% black ownership of prospecting rights, “will not fly”.

He reiterated that, if changes need to be implemented in the sector, the industry needs to understand what it is they want to change.

He further averred that if changes are to be made to the charter, the parent of the charter, the Mineral and Petroleum Resources Development Act must also be reconsidered. He added that investigations must be made into proposals in the old charter that were not executed or implemented and the industry must start addressing those gaps.

Rocha added that if he could, he would plead with Mineral Resources Minister Mosebenzi Zwane to not destroy what has been built over many years, suggesting that if the Minister wants to be successful in the drive for radical economic transformation, the country requires the institutional capacity, as well as people that have the knowledge or experience.

Eunomix MD Claude Baissac also highlighted that few mining managers, investors or companies considered mining as a long-term business. He advised the industry to take a long-term perspective on policies and regulatory frameworks.