The debate about the South African government’s empowerment equity requirement in greenfields mining projects remains “fluid” and up for debate, Department of Minerals and Energy Deputy Director General Joacinta Rocha said on Thursday.
The mining empowerment charter, finalised in late 2002, only covers existing mining operations, Rocha said.
The mining charter has nine requirements including that 15% of South Africa’s mining industry be transferred to empowerment concerns by May 1 2009, rising to 26% by May 1 2014.
It is the government’s intention that new applications for mining rights and exploration permits will be granted to companies or ventures that are 51% held by empowerment groupings.
“Discussions are taking place … to provide more clarity on the issue,” Rocha added.
The government understands that at existing operations, funds have already been invested and that for these operations empowerment groupings will have to hold at least 26%, Deputy Minister of Minerals and Energy Lulu Xingwana told reporters at the sidelines of a mining workshop.
The proposed requirement that empowerment concerns hold a 51% interest in new ventures is “historical” because, at the time of the negotiations around the mining charter, the government had proposed the same percentage, Rocha said.
The greenfields empowerment requirement may only apply to mineral rights held by the South African government, but that too is up for debate, he added.
It is estimated that the government currently holds 5% to 8% of the country’s mineral rights, Rocha said.
“This requirement is not a new thing. The government is not moving the goal posts,” Rocha said.
The government’s move to re-examine the requirements for empowerment in mining in part comes from the recent establishment of a ministerial advisory board and the circulation of a discussion document.
In another development, companies holding land that have metal or mineral reserves that are not being used will lose the right to the unused reserves if the companies concerned don’t apply for new order rights by May 1 2005, Rocha said. — I-Net Bridge