Mine Communities Challenge South African Ownership Rules and Taxes

Updated on
  • Mining-affected communities want input in drafting new rules
  • Charter has been suspended until judgment made in review case

Mine Communities Challenge South African Ownership Rules, Taxes

A group of South African mining communities will challenge the government’s Mining Charter and seek a court order to ensure they are involved in drafting any replacement.

About 150 community-based organizations and activists, represented by the Centre for Applied Legal Studies, will apply to join an existing case brought by mining companies against the charter, the legal group said in a statement. The companies, represented by the Chamber of Mines, are opposing the application because they say it will delay the process.

The CALS is also seeking a declaratory order that mining-affected communities “are recognized as a key stakeholder and must be meaningfully engaged when developing any new charter.”

The new Mining Charter, which was published in June and has been strongly opposed by the industry, puts extra levies on companies and increases black-empowerment requirements. Department of Mineral Resources Minister Mosebenzi Zwane has agreed not to implement the charter until there’s a judgment in the judicial review sought by Chamber of Mines, which represents mining companies. The review is scheduled to begin in December.

While there are some positive elements to the new charter, it was developed without engaging with the communities, the CALS said.

“We are asking the court to allow us to intervene in the case and to set aside the current charter for this failure to meaningfully engage affected communities,” the CALS said. “Mining-affected communities continue to bear the greatest burdens of mining -- losing farmland to mining operations, facing environmental harm and degradation and suffering from illnesses caused by pollution.”

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The CALS and the mining companies have different reasons for opposing the charter, and allowing the communities group to joining the existing case “would significantly delay” court proceedings, the Chamber said in an emailed statement.

Among the Chamber’s concerns are increasing black-ownership levels at the expense of existing shareholders and a series of extra levies. The charter also seeks to establish a government-controlled fund that will manage communities’ stakes in mines. It would receive payments that the industry estimates could amount to 3.5 billion rand ($255 million) a year.

South Africa mines more platinum than any other country and is among the largest gold producers.

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