JOHANNESBURG (miningwekly.com) – The implementation of the third iteration of the Mining Charter, or Mining Charter 3, in some form or another, is inevitable and mining companies should start the process of bringing their operations in line with the regulations set out in the charter, law firm Hogan Lovells mining head and partner Warren Beech advises.
“The reality is that the mining industry needs to accept that the charter is going to be implemented at some point, in one way or another,” he said during a panel discussion on the potential implications of the charter, which was held at engineering consultancy Worley Parsons’ Melrose Arch offices, on Tuesday.
The charter was published by the Department of Mineral Resources (DMR) on June 15 but was suspended in light of an urgent interdict application by the Chamber of Mines (CoM). The interdict application will be heard on September 14 and 15.
According to the CoM, Mining Charter 3 in its current form will destroy the “very industry whose survival is necessary to give effect to the objects of the Mineral and Petroleum Resources Development Act”.
However, Beech told Mining Weekly Online that the charter’s implementation would proceed and that, even if the charter was amended, it would bear similarities to that of the current version and would, therefore, still require all mining operations to adapt to comply with new compliance criteria.
In this regard, he noted that mining companies should start planning for a worst-case scenario – the implementation of the charter in its current form.
He urged mining firms to immediately start planning to ensure they are able to comply with the new charter because, once implemented, companies will have only 12 months to meet the compliance criteria.
Beech further advised mining companies to establish multidisciplinary teams to tackle the organisational implementation of strategies.
“This is not going to be a simple human resources function, it is a multidisciplinary function,” he said, adding that teams need to start unpacking each element of the charter and start scenario planning to incorporate these into companies’ mine strategies.
“If Mining Charter 3 comes into effect [any time soon] and companies are caught on the wrong footing, they will rapidly fall behind. The planning needs to start immediately, because it does not simply require doing what the charter says,” said Beech.
He added that bringing a mining company in line with the requirements of Mining Charter 3 will be a lengthy process in which company documents will need to be drawn up, company structures will need to be established, or adapted, and the manner in which a company operates will need to be changed to a substantial degree.
In terms of the outcome of the court hearing in mid-September, Beech said that, if the CoM’s interdict is granted, a review process will follow, with Mining Charter 2 remaining in full effect, as is, until such a time that a mutually agreed upon Mining Charter 3 can be implemented.
Further, those applying for prospecting rights need to accept that it is “business as usual” for the time being, he noted.
Therefore, prospecting rights can be applied for as normal, said Beech, explaining that no rights will be issued unless there are established black empowerment partners. “The reality is that [prospecting rights] are going to be dealt with through the DMR’s powers and functions in any event.”
In this regard, he said, potential prospectors should also try their best to align themselves with Mining Charter 3; however, he highlights that such an undertaking will be “incredibly difficult” because the risk capital is simply not available.