Minerals Council members largely compliant with 2010 Charter requirements
MINING WEEKLY / 04 DECEMBER 2019 - 13.37 / SIMONE LIEDTKE
JOHANNESBURG (miningweekly.com) – The Minerals Council South Africa on Wednesday published a report on the South African mining industry’s progress in transforming the industry in terms of the Mining Charter.
The report was based on a study by advisory firm Moshe Capital into the council members' transformation and community development performance.
Photo by Creamer Media Minerals Council CEO Roger Baxter and public affairs and transformation senior executive Tebello Chabana
Moshe based the study on the 2018 Mining Charter compliance reports of 32 companies, which represent 79.5% of the total South African mining industry as measured by employee headcount, and submitted it to the Department of Mineral Resources and Energy.
In a statement issued on Wednesday, Minerals Council CEO Roger Baxter commented that the research showed “substantial compliance and significant progress in the industry’s, and South Africa’s, efforts to transform the mining sector and [South Africa’s] economy”.
The results of the study show that the council members have largely complied with the 2010 Mining Charter’s targets across all elements. However, there are a few mining right holders that have failed to meet these targets, and may struggle to meet the new requirements set out in the 2018 iteration of the Mining Charter.
Speaking to media on Wednesday, Minerals Council public affairs and transformation senior executive Tebello Chabana said the assessment focused on five of the Charter’s pillars, namely ownership, employment equity, procurement, human resources development and mine community development.
For ownership, the report found that the average historically-disadvantaged South Africans (HDSAs) ownership exceeded the minimum 26% target as per the 2010 Mining Charter, with 80 out of 93 mining right holders meeting the minimum HDSA ownership requirement.
Of the 92 mining rights holders that were analysed in terms of employment equity, the industry view shows that all the 2010 Charter’s targets were achieved.
Member companies achieved 70.5% at junior management, and 78.7% for core and critical skills. This, the council said on Wednesday, “bodes well” for transforming and creating a diverse workplace.
The industry average was 52.8% for senior management; however, 16 mining right holders struggled to achieve the 40% target. It would prove even more difficult to comply with the 2018 Charter’s requirements of 60% HDSAs and 25% women at this level.
The 2010 Mining Charter also included a range of targets for the procurement of capital goods (40%), services (70%) and consumables (50%) from black economic empowerment (BEE) entities.
The 87 mining right holders analysed in this section “far exceeded” the stipulated targets with 75.4% achieved for capital goods, 75.1% for services and 79% for consumables.
However, 26 mining right holders (about 30%) did not meet the minimum 70% minimum requirement for procurement of services.
In the 2010 Charter, it stipulated that 5% of the yearly payroll should be spent on skills development. In 2018, the sampled mining right holders spent 4.8% of their yearly payroll on human resource development, just below the minimum compliance target.
The data indicates that about 72% of the 86 mining right holders analysed met the minimum requirement.
In terms of mine community development, where the 2010 Charter stipulated that mining right holders were required to engage and consult with mining communities, the analysed data indicated that 89% of the 85 mining right holders assessed for compliance in this area were complaint.
There were 488 programmes and R1.3-billion invested into various mining communities and labour sending areas.
The Minerals Council also said it was apparent that, in the sphere of mine community development, “more needs to be done” by some companies regarding community consultation.
Human resource development was the only category where the industry did not manage to achieve the minimum compliance targets.
The Minerals Council referred to the 26% BEE ownership as having being surpassed, but said the structure of the ownership transactions did not, on balance, meet the 2010 Charter’s requirements of “effective ownership” and “meaningful economic participation”. This, the council said, was largely owing to the 2010 requirements not being in force when most of the largest transactions took place about 15 years prior.
In summary, the Minerals Council believes that the findings show, in aggregate, a “very good level of compliance” with transformation obligations.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER