South Africa: Mining Companies Required to Have 30 Percent Black Ownership
June 19, 2017
[caption id="attachment_38579" align="alignleft" width="300"] Photo: GCIS Mineral Resources Minister Mosebenzi Zwane.[/caption]
Pretoria — The 2017 Mining Charter has increased the level of black ownership in mining companies from 26% to 30%.
"Holders who have maintained a 30% black shareholding will not be required to restructure their shareholding," Mineral Resources Minister Mosebenzi Zwane said.
Addressing a media briefing in Pretoria on Thursday, Minister Zwane said the 30% ownership requirement also applies to holders who claim historical Black Economic Empowerment (BEE) transactions.
"A historical BEE transaction is recognised for the reporting period but such holders are required to top up their shareholding to the minimum requirement of black shareholding within 12 months of the charter coming into force.
"With regards to the transfer of rights, a holder who sells their mining assets must give black owned companies preferential option to purchase," he said.
Minister Zwane said the charter requires the holder of a mining right to pay 1% of its annual turnover to the 30% black persons shareholding prior to and over and above any distributions made by a holder to its shareholders.
"This 1% payment is meant to ensure real economic value in the hands of black persons, but is always subject to the solvency and liquidity test, as provided in the Companies Act," he said.
The revised charter further requires that a new prospecting right must have a minimum of 50% plus 1 black person shareholding, which must include voting rights.
The Department of Mineral Resources embarked on a process to review and amend the Mining Charter to strengthen and refine its effectiveness in driving economic transformation and competitiveness in the mining sector. That process has now been concluded.
"In order to achieve economic transformation, we need to produce a new era of industrialisation, driven by young economic champions. Procurement can play a profound role in providing genuine economic opportunities, particularly to new entrants and the youth," Minister Zwane said.
The charter requires 70% procurement of mining goods and 80% procurement of services from BEE entities.
Employment Equity
"On Employment Equity, the charter aims to ensure that black representation at the various levels of employment is representative of the demographics of the country," Minister Zwane said.
The requirements are at board level a minimum of 50% black representation, 25% of which must be black females; at an executive/top management level, a minimum of 50% black representation, 25% of which must be female black representation, and at senior management level, a minimum of 60% representation, 30% of which must be female black representation.
The requirement at middle management level is a minimum of 75% black representation, 38% of which must be female black representation and at junior management level, a minimum of 88% black representation, 44% of which must be female black representation.
"On the Human Resource Development element, a holder must invest 5% of the leviable amount on essential skills development.
"We cannot ignore the fact that effective implementation of this charter is key if we are to see meaningful change.
"As the custodian of the nation's minerals, government, through the Department of Mineral Resources, has a duty to ensure that it stewards the country's minerals in a manner that benefits all South Africans," Minister Zwane said.
