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Chamber to argue against share-based BEE in Charter talks

MININGMX / 25 MARCH 2018 - 19.33 / DAVID MCKAY

THE Chamber of Mines wants to replace employee share option schemes (ESOPS) with profit share agreements whilst it will resist South African government pressure for further equity transfers of listed Johannesburg firms.

These were two important points on which the Chamber will negotiate a new Mining Charter with the Department of Mineral Resources (DMR) due to kick off this week, a mere nine working weekdays before the first progress report on the discussions is due on April 10. The discussions will be held between two task teams focusing on transformation and industry competitiveness.

Tebello Chabana, executive director, SA Chamber of Mines

“We want to explore whether people are getting stuck with equity,” said Tebello Chabane, senior executive for public affairs and transformation at the Chamber of Mines in an interview with Miningmx on March 23. “We want to ask if benefits and oversights are a better solution,” he said. One proposal the Chamber intends making is that employees and communities should have a direct say in how mines are run.

It will also argue that ESOPS expose employees to market volatility. Shares in companies are sometimes affected by factors other than how successful a mining team is functioning. There may be a more direct link between profit share and employee efforts. Whether this will be linked to productivity – not favoured by unions – is yet to be revealed.

As for transferring shares at the corporate level, Chabane was instructive in a recently published think-piece for City Press, republished by Fin24 on Sunday. In the article, he sought to highlight the successes the industry had had in the creation of Exxaro Resources and African Rainbow Minerals, but also its problems: the continuing consequences or once-empowered, always-empowered issue which is the subject of a High Court judgement.

“We need to look at the things that have worked, as well as the things that have not,” said Chabane in his interview with Miningmx. “I mean, how many times are we going to have to get this right?” he said.

Given the complexity of matters to be discussed with the DMR, unions as well as community representatives, it would seem that mines minister, Gwede Mantashe’s end-May deadline for completion of negotiations for a new Mining Charter is looking aspirational, at best. “Two weeks is not enough time to make significant headway,” said Chabane of the April 10 report back.

As of March 23, for instance, there wasn’t finality on whom the Chamber of Mines might eventually nominate for its task teams. It hadn’t heard whom the DMR might be nominating. “If they were to nominate very senior people then we might have to send in some or our CEOs,” he said. At present, the Chamber has identified some of its senior internal figures for the task team negotiations.

For all the challenges, however, Chabane declared himself not especially perturbed by Mantashe’s view that the negotiations ought to start where the industry and the DMR last let off in the form of Mosebenzi Zwane’s Mining Charter 3. “We are not put out by using Mining Charter 3 as a starting point,” said Chabane. “I think he [Mantashe] just wants to use that as a reference point,” he added.

Mining Charter 3 contains a number of elements that would most likely face legal challenge were the government ever to promulgate them. Mandatorily paying select empowerment partners dividends before other shareholders breaks the Companies Act. And Zwane’s interest in setting up a new levy collection agency is a ministerial overreach that might even be contested within government itself, given that this is the role of National Treasury.

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LINK : http://www.miningmx.com/top-story/32265-chamber-argue-share-based-bee-charter-talks/

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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