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South Africa to appeal mining charter ruling

South Africa is reportedly set to appeal the recent High Court decision on the country’s mining charter, which was in favour of the Minerals Council South Africa’s challenge and deemed it a policy, not a law.
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Law firm Fasken, which has had a presence in South Africa for 130 years, pointed out some BEE provisions remained in the mining charter

Staff reporter

The government would appeal two court rulings that struck down changes to rules requiring mining firms to be at least 26% owned by Black investors in perpetuity and declared it unlawful for payouts to the coronavirus-struck tourism industry to be limited to Black businesses, Bloomberg reported last week.

In the mining charter decision two weeks ago, the High Court had upheld the "once empowered, always empowered" principle and also scrapped local procurement targets, with South Africa-based law firm Webber Wentzel noting the judgement was likely to be appealed

Mineral resources and energy minister Gwede Mantashe had maintained at a mining conference in Limpopo last week the charter remained a tool for transformation to set the country on a path for inclusive growth and development.

He had sought through the charter for miners to top up Black Economic Empowerment ownership to 30% if they fell below the 26% BEE threshold.

Johannesburg-based lawyers from global legal firm Fasken said according to the ruling, mining right holders who, at any stage had achieved a minimum of 26% BEE shareholding, and whose BEE partners exited prior to the commencement of Mining Charter III, would be recognised as compliant with the BEE requirements of the Mining Charter for the duration of the mining right.

However Godfrey Malesa and Mmaphuti Morolong noted not all the charter's provisions were reviewed or 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," they said.

"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."