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September 16, 2021
Mining Africa News

South African Mining industry committed to transformation

Regular engagement will ensure the creation of workable policy frameworks with clear implementation guidelines that will secure the effective transformation of this critical economic sector in South Africa.

Promoting and enabling transformation is one of the Minerals Council’s five strategic goals, aimed in part at creating an enabling policy environment for the mining sector by engaging with stakeholders on all policies that impact the sector to ensure that they are stable, competitive and predictable in order to promote investment and transformation.

The industry’s most recent transformation objectives were set out in the third iteration of the Mining Charter – published in September 2018.

The Minerals Council commissioned a study in the first half of 2019 to assess the industry’s compliance with the transformation objectives outlined in the 2010 Mining Charter, which was applicable until 2018.

The assessment, which focused on five of the Charter’s pillars; namely ownership, employment equity, procurement, human resources development and mine community development, found a very good level of compliance by member companies’ against the transformation obligations of the Charter.

While there were areas where compliance was exceeded, such as the level of HDSA representation across all management positions and the levels of procurement of capital goods, services and consumables, there were certain areas where average compliance did not meet the 2010 Charter targets.

In particular, while the required 26% BEE ownership target was significantly surpassed, the structure of ownership transactions did not, on balance, meet the 2010 Charter’s requirements of “effective ownership” and “meaningful economic participation”.

According to Minerals Council senior executive for public affairs and transformation Tebello Chabana, the definitions of “effective ownership” and “meaningful economic participation” were introduced in the 2010 Mining Charter.

Many successful ownership transactions concluded prior to 2010 hadn’t applied these new empowerment shareholding requirements and therefore were disqualified even though they had achieved economic empowerment in reality.

What the findings of the report also indicated is that the mining industry does not view transformation as a mere compliance or box-ticking exercise in that it is going way beyond compliance, Chabana points out.

While it is still early days in the implementation of the third iteration of the Charter, which came into effect on 1 March 2019, the Minerals Council has already begun planning how it intends to assess the industry’s transformation compliance.


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