'Revolutionary' Charter Spells Trouble

According to speculation, a new mining charter in mind will chase transformation targets up to 30%, but the Chamber of Mines has warned that it is time to think differently about transformation – and that targets might not be the answer.

- David McKay

Mining shares of all stripes are certain to be affected if mines minister Mosebenzi Zwane makes good on a promise to gazette a “revolutionary” new mining charter, the third since 2004.

Speaking on 16 May ahead of his budget vote in Parliament, Zwane described the new charter as “a revolutionary tool” that would also quell industry threats that a document without its imprimatur would be sent to the courts.

How Zwane intends to achieve this – bringing about radical economic transformation while simultaneously pleasing the Chamber of Mines – is a complete and utter mystery, especially to the chamber, which is yet to see the document.

The last sight of the mining charter redraft was in November when the department of mineral resources (DMR) appeared before a parliamentary committee. At that point, the charter raised the prospect of additional levies and taxes of up to R3bn a year while R2bn already contributed by the mining industry for human resource development would be diverted into a new tax collection entity, the provenance and oversight of which was unknown.