SA’s mines dispute takes a twist

South Africa’s state-owned financier of black ownership deals wants to take part in a legal dispute between the government and a group representing mining companies over a law on black holdings in the industry.

The request by the National Empowerment Fund comes after the Chamber of Mines asked the North Gauteng High Court in Pretoria whether its members have to ensure that their assets are 26% owned by blacks even if some later sell their stakes.

The Department of Mineral Resources included the shareholding provision in its Mining Charter which governs producers’ licensing conditions, in line with government policy to remedy economic disparities caused by apartheid. The NEF’s quest to join court proceedings may further postpone the case, heightening uncertainty in an industry that accounts for almost half of South Africa’s exports.

“The chamber has received a letter from the NEF indicating it wishes to be admitted as a friend of the court,” the Johannesburg-based lobby group, which represents the largest mining companies in South Africa including Anglo American Plc and Sibanye Gold Ltd., said in an e-mailed response to questions. The chamber asked the NEF to lodge papers with the court and will then take a view on the application, it said.
Court Proceedings

The NEF wants to join the proceedings so it can argue that the court should also take into account a separate law governing efforts to raise participation by blacks in the economy, according to the letter obtained by Bloomberg. The legislation refers to the Broad-Based Black Economic Empowerment Act, whose provisions will trump those of the Mining Charter from the fourth quarter should the mineral resources department fail to align its requirements with this law, according to an October statement from the department.

The NEF wants to join the case “to safeguard and uphold the legitimate aspirations of inclusive growth,” Moemise Motsepe, the organization’s head of marketing and communications, said by e-mail.

Should the court find that the Mining Charter applies in the manner that the chamber contends and not in the way argued by the mineral resources ministry, “that would be inconsistent with the provisions” of the trade and industry department’s act which prevails over mining legislation, the NEF said in the letter.

The codes from the empowerment act provide for recognizing a portion of previous black ownership after a holder sells, based on certain conditions, and cannot count for more than 40 percent of the requirement, according to the letter.

“If an entity does not maintain the ownership thresholds, it will be considered not to be compliant at the time of the next assessment,” the NEF said.

Earlier this month, the chamber asked the court to expedite a ruling on whether a third party, legal firm Malan Scholes Inc., may consolidate a separate case against the mineral resources department, an application which the mines lobby is opposing.

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Source: Fin24