Dear Sir/Madam,
The Department of Mineral Resources (‘DMR’) has released the final Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017. This charter is effective immediately for the industry.
The charter guides the current mineral rights holders and well as prospective rights holders on issues around transformation and empowerment. It must be noted that this is not gazetted in terms of the BEE Act but rather under the Minerals and Petroleum Resources Development Act of 2002, therefore cannot be used for procurement purposes in other sectors. Mining companies will be required to provide a generic BEE certificate as accredited by SANAS for procurement purposes, and apply this Charter for mineral rights purposes to the DMR.
Although this charter is not applicable to non-mining companies, it will affect the purchasing decisions of the mines with their suppliers. If you are a supplier to the industry, please note the procurement targets as stated in the charter.
One important factor in this charter is the removal of the Continuing Consequences Principle, also known as ‘once empowered, always empowered’. Mining companies are required to Top-Up their transactions should they have lost any BEE shareholding in the past. It remains to be seen if such an approach would be adopted by the DTI, however, we are of the opinion that this can only happen once the impact of this charter has been fully assessed. Please also note that over and above the prescribed split in the BEE Consortium holding shares in the mining companies, Sale of Assets are limited to 11% and only by approval from the Ministry.
The Chamber of Mines has stated that it intends to interdict the implementation of the charter as it is applicable immediately, while also assessing the impact of the changes contained in the charter.
If you have any questions regarding the impact of this charter on your business, please do contact your nearest Empowerdex branch for more information.
Regards
Empowerdex Team