On 26 March 2019, the Minerals Council of South Africa ("Council") instituted an application with the High Court, Pretoria, for a judicial review and setting aside of certain provisions of the Broad Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry 2018 (the "Mining Charter"). The Council’s primary challenge relates to the provisions on how continuing consequences of previous empowerment transactions (the so called “once empowered, always empowered” principle) are not recognised in the renewal and transfer of mining rights.
The starting point of the Council’s argument is that the Mining Charter proceeds from the basic incorrect premise that it constitutes an instrument of law. The Council argues that the Mining Charter constitutes a formal guideline or statement of policy mandated by section 100(2) of the Mineral and Petroleum Resources Development Act, 2002 (the "MPRDA"), and is therefore not legislation and cannot be applied so as to have a force of law. The Council argues, further that in including certain of the challenged provisions in the Mining Charter, the Minister of Mineral Resources (the "Minister") acted ultra vires and purported to exercise powers which reside exclusively with Parliament.
Amongst others, the Council seeks to review and set aside the following:
- The requirement for a new mining right holder under the Mining Charter to continuously replenish its black shareholding after its black partner exits. In this regard, the Council is of the view that requirement to replenish the black ownership is not provided for in the MPRDA;
- The provision that the recognition of continuing consequences (once empowered always empowered) in respect of an existing mining right, lapses on the transfer of an existing mining right;
- The Minister’s prescription of the manner in which the black shareholding of a mining right holder should be held;
- The provision that failure to comply with the ownership elements of the Mining Charter (as set out in clause 9) shall be in breach of the MPRDA and subject to section 93, read with section 47, 98 and 99 of the MPRDA with regard to the suspension and potential cancellation of their mining rights; and
- Certain provisions pertaining to the non-ownership elements of the Mining Charter.
The Department of Mineral Resources released a media statement on 27 March 2019 indicating that it intends to oppose the application by the Council and that it will file its responding papers in due course.