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Update: High Court Ruling on Mining Charter 2018 – DMRE Will Not Appeal

Fasken
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Overview

It was reported on 23 November 2021, that the Minister of Mineral Resources and Energy (the "Minister") informed the Parliamentary Portfolio Committee on Mineral Resources and Energy (the "Parliamentary Committee") that he will not appeal the judgment handed down by the High Court in the matter between Minerals Council of South Africa vs Minister of Mineral Resources and Energy and thirteen others [Case No.20341/19](the "Judgment"), in relation to the challenge to the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 ("Mining Charter III").

In its decision, the High Court held that the Mining Charter III is a policy document and not law; and accordingly set aside the provisions of the Mining Charter III which were challenged by the Minerals Council.  Our bulletin on the High Court Judgment is available here

Notwithstanding the reports, the Minister has not issued a formal statement from the Department of Mineral Resources and Energy regarding his decision to not appeal the Judgment. Should the Minister seek leave to appeal the judgment, he will be required to make an application for condonation for his delay in timeously seeking leave to appeal; and the court will only grant such condonation application on good cause shown by the Minister for the delay.

It is reported further that the Parliamentary Committee is of the view that the Minister should have appealed the Judgment, and has resolved to seek the opinion of the Parliament Legal Service on grounds to compel the Minister to launch an appeal, in order to avoid a pattern of similar judgments in the future.

The Minister recently indicated that the issue of the Mining Charter  (and the judgment) “is not an issue of once empowered always empowered, but rather  a case of whether the mining industry is creating new black capitalists or not”. The decision to not appeal is accordingly in our view, not the end of the transformation debate in the mining industry. If the Minister does not proceed with the appeal, it is likely that he will introduce amongst others, the transformation elements set out in Mining Charter III through regulations or through an amendment to the Mineral and Petroleum Resources Development Act, 2002.

The ongoing battle for certainty on the Mining Charter principles and more specifically, the so-called “once empowered always empowered” principle has been the subject of concern for investors; and it is clear that the Judgment and the Minister’s decision to not appeal is certainly not the end of the transformation debate in the mining industry. The uncertainty regarding the finality of the Mining Charter principles and, amongst others, the transformation elements of the Mining Charter could have a negative impact on foreign direct investment and urgent finality on the matter, whilst unlikely, is required.

We continue to follow the developments regarding this matter and will update you if  there are any further developments. Please contact the writer should you require any information or further details regarding this matter.

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