As long as previous black empowerment deals are recognised, a new target of 30% black ownership of mining companies would not be an insurmountable hurdle for most large mining companies to achieve, industry executives said this week.
They were commenting on a Bloomberg report that the latest amended version of the draft mining charter approved by cabinet will raise the black ownership target from the current 26%. The draft charter will be gazetted in the next couple of weeks.
Under the Mineral & Petroleum Resources Development Act of 2004, compliance with the charter is necessary to qualify for and retain mining rights. The charter is reviewed every five years.
The first black ownership target was 15% by 2009 and the second was 26% by 2014.
Every time the department of mineral resources has reviewed companies’ compliance with the charter, it has disagreed with their measurements of black ownership. That is because black ownership fluctuates and definitions can vary.
The industry’s official response to the report, through the Chamber of Mines, is that it is impossible to comment on speculation.
Some companies, like Gold Fields, already exceed the 30% target if previous deals are taken into account. According to its latest annual report, it has 35% "meaningful economic participation".
James Wellsted, head of investor relations at Sibanye Gold, says it is impossible to comment on the 30% target Bloomberg quotes because it is unclear if previous transactions will be recognised. For example, in 2004 Mvela Resources took shares in the gold mines Sibanye now owns and five years later "flipped up" those shares to the Gold Fields level. It later unbundled them to its shareholders. Other Sibanye assets like Cooke and Rustenburg are 26% black-owned.
Johan Theron, head of investor relations at Impala Platinum, says a 30% ownership target is only one element of the draft charter. Equally important will be how that is calculated. Without clarity, he says, it is impossible to express an informed opinion.
Implats’s own assessment is that it has not only achieved the department’s 26% target, but exceeded it with its recent employee share ownership plan.
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