Mining Charter

I’ve done quite a bit of work with the mining industry recently. The mining charter (which is an act, and not a BEE sector code) sets targets for mining houses to get their mining licenses renewed. The deadline is July 2009, so there is going to be lots of excitement soon.
The mining charter is not broad-based, does not follow the codes and virtually only requires 26% black ownership to comply. It does have other requirements, but they are so tenuous as to be meaningless.

The biggest complaint most people have about BEE is that it is not sufficiently broad-based and does not benefit the people whom the act intended. The mining charter falls into this category.

Now I was wondering how to change this:  Ideally the mining charter should become a sector code as part of the B-BBEE act. The way to get a new charter and then sector code is to start with the industry itself . The following groups need to come together to ask the dti minister to start the process;

  • The mining houses and mines
  • The Chamber of mines
  • The unions
  • The responsible government department (ie. DME)

They need to prove to the minister that they represent the main and majority interest groups in the industry.

I then realised that there is almost no chance of this happening. Let’s only look at the mines that condemn the mining charter. Would they be happy going to a proper scorecard? Not likely! The few that do not have their licenses will obviously jump at the opportunity. The majority that have, will see this as a way to prevent easy access to the industry. They will feel that they have had to “make sacrifices” to get their 26% ownership .  Of course if they had to now fill in a scorecard with a decent target of say level 3, they may find that they fall short. Many ownership deals are not worth that much on the scorecard, and many mines have not looked at the rest of the scorecard, so would have a bad score.

The other role players would probably be even less likely to support a move to a broad-based scorecard.

Sad to say, but I doubt that the mining charter will become broad-based and follow the B-BBEE codes any time soon.

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