New charter won’t benefit mining

The future of South Africa’s largely stagnant mining industry could be decided in the courts if the Chamber of Mines goes ahead and implements the conditions in the new mining charter gazetted last week.

The chamber is particularly agitated that it would be forced to sign a document in which its input had not been taken into account.

Miners have been given 12 months to up their BEE content to 30% from the current 26% before the charter is promulgated. The chamber now seeks an urgent court interdict to suspend the charter from being implemented.

Though mining has traditionally been one of the pillars of the national economy, in real terms, mining was 7.3% of total GDP in 2016 – below the 8% average over the past decade.

The chamber cautions that “although gross fixed investment has declined by only about 1% on average since 2013, the fact that the sector is really in survival mode is reflected in a progressively worsening net investment trend: -2.5% in 2013, -0.4% in 2014, -10.5% in 2015 and a more than 100% contraction in 2016”.

Mining as an industry is in trouble and is unlikely to benefit through either charters or litigation.