There is new energy to ease mining industry conflict - Scholes

There appears to be new political resolve to mend the relationship between the mining industry and the Department of Mineral Resources, says specialised law firm Malan Scholes director Hulme Scholes.

Speaking at the IHS Markit South African Coal Export Conference, in Cape Town, last week, the veteran lawyer noted that, “with the new energy blown into the industry by African National Congress president Cyril Ramaphosa”, he was hopeful that the current litigation surrounding the Mining Charter III would make way for “something more sustainable” to be implemented.

“[Further], for the first time . . . we will see the trust deficit between the mining industry and department close, with, hopefully, [a sustainable policy] that can transform the industry to benefit everybody,” he averred.

The Reviewed Draft Broad-Based Black Economic Empowerment Charter for the South African Mining and Minerals Industry, also known as Mining Charter III, was published in June last year by Mineral Resources Minister Mosebenzi Zwane.

The charter has resulted in legislative contestation.An interdict application to suspend the implementation of the charter and a review application to set the charter aside have been lodged.

The Chamber of Mines’ (CoM’s) application to have the charter set aside has been postponed to February 19.The basis of the CoM’s case is the lawfulness and constitutionality of several clauses in the reviewed charter, as well as the lawfulness of the charter as a whole.

According to Scholes, the charter “is unconstitutional; it is a skittle put up to be knocked down . . . it is not designed to survive, while the rot in the Department of Mineral Resources must be sorted out and Minister Zwane must go”.

He added that, while the charter had been suspended, he hoped to see engagement between the CoM, interest groups and government “to draw a line through the Mining Charter III, evaluate where we are now and how effective charters I and II were and to learn from them to develop a new charter”.

“If we have a change in attitude from government and return to administering industry as opposed to taking political decisions . . .the conflict will dissipate,” Scholes said, noting that change might come soon and that the trust deficit would hopefully start to decrease.

Scholes, however, acknowledged that he was not sure how long it would take to review and set the charter aside.

Scholes has also launched a court application – the Malan Scholes application – with the support of seven mining companies.

He noted that the court application was “very much alive”, having been granted a degree of locus standi (the right to bring an action or to appear and be heard in court) to take on the Minister.

Scholes’ application is for Mining Charter I, II and III to be reviewed and to be set aside on the basis that the charters are policy and not law.

“The problem is that government is taking punitive sanction against people for alleged noncompliance with a policy, as opposed to law,” Scholes said, noting that, if the charter were law, it would “fly in the face of the rule of law”.

A key theme in Scholes’ notice of motion would be to compel the Minister of Mineral Resources to amend the Mineral and Petroleum Resources Development Act within 18 months to provide for transformation in the industry.