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Changes in mining code lead to disgruntled South African workers

The South African government published a draft of the new Mining Charter last week, and the controversial proposals within it have left the industry in ...

Nell Walker
|Apr 20|magazine4 min read

The South African government published a draft of the new Mining Charter last week, and the controversial proposals within it have left the industry in uproar.

There are now new rules surrounding Black Economic Empowerment (BEE) requirements. Mining businesses in South Africa are required to sell 26 percent of ownership to local BEE groups, meaning that a BEE group could then sell shares on to non-shareholders as it would be beyond their control. 

According to oilprice.com, the new charter states on this subject: “Where a BEE partner or partners have exited, BEE contract has lapsed or the previous BEE partner has transferred shares to a non-BEE company, the mining right holder must within the three years transitional period from the date of publication of the charter review its empowerment credentials consistent with the amended 2016 mining charter.”

This would force miners to constantly replace BEE shareholders when old ones left, and the rules also specify that five of the 26 percent must go to mine workers through a trust, with another five given to a local community trust. Requirements for black representation in management will be raised, growing from a previous 40 percent to between 60 and 88 percent. Enterprises must also source more capital goods from local black businesses.

Many companies have deemed the new proposal unacceptable, and as such the Chamber of Mines has said that it will engage with the government on the matter during the 30-day comment period for the draft rules.

 

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