Minerals Council South Africa VP Nombasa Tsengwa has said that having no scorecard against which to measure compliance with the Mining Charter 2018, which acts as the underlying policy document of the Mineral and Petroleum Resources Development Act (MPRDA), provides a “virtually insurmountable challenge” to the mining industry.

Speaking at the MPRDA Review Summit, in Johannesburg, on July 13, she said mining companies had been submitting reports to the regulator, but that these were not uniform, making data capturing and analysis difficult.

“Resolving this matter would provide a common understanding among all stakeholders of what has been achieved in realising the ambitions of the MPRDA and the Mining Charter. This will give us a base from which to continue our transformation journey,” she stated.

Tsengwa said that, despite all the reporting challenges, the industry should be commended on its efforts to achieve the Mining Charter 2018 in terms of employment equity and human resources development.

“These are the only elements that can be analysed because there is standardisation in the forms submitted to the Department of Employment and Labour,” she said.

She noted that there was an erroneous and damaging perception that the mining industry was not committed to transformation because it went to court to challenge a few clauses in the 2018 Mining Charter.

“There is no basis in fact for this perception,” she said.

An independent study commissioned by the Minerals Council to determine the progress made in achieving transformation within the mining industry, which included companies representing more than 70% of all mining production in South Africa, showed a weighted average of 39% historically disadvantaged South African shareholding against the 26% target set in the Mining Charter 2010.

The same study also showed that these mining companies exceeded all targets under employment equity, procurement and enterprise supplier development, and mine community development as contained in the 2010 Mining Charter. They only fell short of achieving the human resources development target, achieving 4.8% instead of 5%.

Tsengwa explained that the mining industry’s main challenge related to clauses that contradicted the MPRDA, which dealt with the continued recognition of empowerment from past transactions, and local manufacturing targets that were ill-conceived, unachievable and which would have had harmful consequences for suppliers of equipment to mining companies and for mining right holders.

However, the court had clarified the legal status of the Mining Charter – adjusting it to a policy and not a binding instrument – something which Tswenga said the industry had been saying all along.

Ensuring that the legal status of the Mining Charter was clarified was critical as all stakeholders needed to understand what the Charter was and how it could be enforced, she explained. This clarity had therefore created certainty that would improve shareholder confidence and investment potential.