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Interpreting the 2018 Mining Charter

Fundiswa Ndaba, Senior Policy Analyst: Public Affairs and Transformation at The Minerals Council reports on the Mining Charter 2018
 

MC2018 became effective on the 1 March 2019. Mining right holders must report on the new Charter by 31 March 2020.

KEY POINTS

  • MC2018 is more balanced and an improvement on the Mining Charter of 2017.
  • Local content targets are unrealistic and state incentives are needed for effective implementation.
  • The lenient exemptions for new mining right applications for Junior and Emerging miners do not apply equally to existing mining right holders.
  • Clarification is required on some provisions.

“MC2018 is a balanced and better Charter compared to the Mining Charter 2017 under Minister Zwane, however, it also has its challenges, which have been included in the Review Application of the Mining Charter.

“The major concerns include the limited application and recognition of continuing consequences of historical transactions on Renewal and Transfer Applications and the provisions and targets for local content under the Inclusive Procurement element.

“The industry fully supports local content and local manufacturing, as this would have a positive impact on job creation and growth for the economy, however, the local content targets set in MC2018 are unrealistic and will take decades to achieve. They will also require state incentives and programmes that will ensure effective and progressive industrial development.
 
“MC2018 introduced more lenient provisions (exemptions) for new mining right applications for Junior and Emerging miners. This is a positive for the Junior mining sector, however, it also doesn’t assist existing mining right holders that are “Junior and Emerging miners” by definition, as they would still have to comply with the MC2018 provisions that apply to all right holders. Another positive for Prospecting right holders is the removal of MC2018 provisions.
 
“MC2018 required the mining right holders to submit their Employment Equity and Inclusive Procurement Plans to the Department of Mineral Resources and Energy (DMRE). 2019 is the first year of implementation of MC2018 and there are still a few challenges with clarity on some of the provisions. The industry would appreciate direction and further consultations with the DMRE on implementation of MC2018.”
 
The Mining industry supports the Mining Charter as a policy document for Socio-Economic Transformation of the industry. The industry is fully committed to transformation, growth and competitiveness as reinforcing and critical principles.

For further information on the Mining charter, together with a download of Deloitte’s Commentary and Insights on the draft 2018 Charter, please visit the CBA website.

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