South Africa studying court judgment that parts of mining charter unconstitutional

Ground handling worker performing a routine inspection at Finsch, South Africa’s second largest diamond operation by production. (Image courtesy of Petra Diamonds.)

South Africa’s mining ministry said it was studying a judgment by the High Court that some clauses in the country’s mining charter, including on levels of Black ownership and procurement from Black-owned companies, were unconstitutional.

Mining industry body the Minerals Council had criticised several clauses in the 2018 charter including that miners must procure 70% of goods and 80% of services from Black-owned companies and that Black ownership levels in South African mining companies should increase to 30%.

It asked the court for a judicial review of those parts.

The High Court ruled that the minister at the time “lacked the power to publish a charter in the form of a legislative instrument binding upon all holders of mining rights”, making the charter effectively just a policy instrument, not legislation.

The court said it would set aside or cut the disputed clauses. Lawyer Peter Leon, partner at Herbert Smith Freehills, said the move was positive for mining companies’ security of tenure.

The removal of the procurement rules could give mining companies more flexibility in sourcing supplies, many of which are imported.

The Department of Mineral Resources and Energy (DMRE) said it noted the decision made on Tuesday by the High Court, Gauteng division, in Pretoria in the judicial review.

“The DMRE together with its legal council is currently studying the court judgment and will communicate further on the matter in due course,” the ministry said in a statement.

The High Court judgment is likely to be appealed by the DMRE, law firm Webber Wentzel said.

(By Helen Reid; Editing by Alexandra Hudson)


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