The South African Diamond Producers Organisation (SADPO) has welcomed the September 21 judgment by the Gauteng High Court that the Mining Charter was not binding legislation, but rather an instrument of policy.
The court case follows the Minerals Council, in early 2019, seeking a judicial review of the 2018 Mining Charter, with the intention of having the court set aside certain sections of it, including the provisions on how previous black economic empowerment (BEE) is not recognised in the renewal and transfer of mining rights.
SADPO chairperson Gert van Niekerk says the judgement sets aside all the provisions in the 2018 Charter related to the targets set out for licence holders under the Diamond Act and the Precious Metal Act.
“While SADPO remains committed in its support to the transformation process, we remain adamant that our side of the industry – small and junior diamond mining – will have to look at achieving this in a different way,” he tells Mining Weekly.
Studying the judgment, says Van Niekerk, “clearly indicates that Mineral Resources and Energy Minister [Gwede Mantashe] is of the opinion that the transformational process has not been successful and therefore the need for the Charter to be seen as subordinate legislation to rectify the situation”.
Further, Van Niekerk says an August report – ‘Status of the South African Small and Junior Diamond Mining Sector’ written by Nelson Mandela University geology graduate (MSc) Sinazo Dlakavu and published by the Africa Earth Observatory Institute – clearly indicates this important issue as one of the reasons for the decreased numbers in mining operations since the inception of the Mineral and Petroleum Resources Development Act (MPRDA).
“Over this period [since the MPRDA], over 20 000 job opportunities were lost, and the number of operations decreased from 2 000 to about 200,” he highlights.
Further, Van Niekerk says small businesses are traditionally owner-operator type of businesses and can, in most instances, only support one family. “If you then must start sharing with a partner it becomes impossible to stay financially viable, and hence the decreased numbers.”
It is for this reason that SADPO is continuously engaging with government. This is being done to simplify the licensing regimes in the mining industry, in an effort to make it possible for new entrants, which can be 100% owned by historically disadvantaged individuals.
“The setting aside of the targets under the Diamond Act and the Precious Metal Act is, in our opinion, proof of this fact,” states Van Niekerk.
He adds that the judgment brings legislative certainty to a large extent and will probably stimulate the much needed foreign and local investment into the industry at large.