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KEY CONSEQUENCES OF THE GAUTENG HIGH COURT’S DECISION IN MINERALS COUNCIL OF SOUTH AFRICA .......

LEXOLOGY / 28 SEPTEMBER 2021 - 16.55 / HERBERT SMITH FREEHILLS LLP



Key consequences of the Gauteng High Court’s decision in Minerals Council of South Africa v The Minister of Mineral Resources and Energy and Thirteen Others (Case No. 20341/19)(Mining Charter III Judgment)


Summary

On 21 September 2021, a full bench of the Gauteng High Court delivered a unanimous and strong judgment declaring that the Broad-based Socio-economic Empowerment Charter for the Mining and Metals Industry, 2018 (Mining Charter III or the Charter) is simply policy and not legislation or subordinate legislation – as long contended by the Department of Mineral Resources and Energy (DMRE). The Court consequently set aside a number of Mining Charter III’s key provisions. These include the re-empowerment obligations which the Charter purported to impose on existing mining right holders when they wish to renew or transfer their rights, the Charter’s onerous procurement, supplier and enterprise development targets, as well as some of its penalty and enforcement clauses.



Background to the judicial review proceedings

Mining Charter III1 came into force on Friday, 1 March 2019 – almost three years after the DMRE circulated a first draft for public comment.2

While the Charter was a significant improvement on the Reviewed Broad-Based Black Economic Empowerment Charter for the South African Mining Industry, 20173 which former Mineral Resources Minister, Mosebenzi Zwane, published in June 2017 and subsequently withdrew, it still contained a number of provisions that were a cause for concern. As we previously discussed (here) these included:

  • onerous re-empowerment obligations for the renewal and transfer of existing mining rights;

  • the BEE Shareholding top-up requirements for pending applications; and

  • the Minister’s seemingly unlimited ability to review and revise the obligations imposed under the Charter from time to time.

In an attempt to address these concerns, the DMRE and the Minerals Council South Africa (Minerals Council) engaged in a series of consultations following the publication of the Charter in September 2018. The parties were, however, unable to find common ground and on 26 March 2019, the Minerals Council instituted a judicial review of the Charter in which it requested the Gauteng Division of the High Court of South Africa (High Court or the Court) to set aside certain of its provisions......................


CONTINUE READING HERE : https://www.lexology.com/library/detail.aspx?g=de622f59-6c08-4a0c-9f37-38e01da2cc98


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

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