Summary

On 21 September 2021, a full bench of the Gauteng High Court delivered a unanimous and strong judgment declaring that the Broad-based Socio-economic Empowerment Charter for the Mining and Metals Industry, 2018 (Mining Charter III or the Charter) is simply policy and not legislation or subordinate legislation – as long contended by the Department of Mineral Resources and Energy (DMRE). The Court consequently set aside a number of Mining Charter III’s key provisions. These include the re-empowerment obligations which the Charter purported to impose on existing mining right holders when they wish to renew or transfer their rights, the Charter’s onerous procurement, supplier and enterprise development targets, as well as some of its penalty and enforcement clauses.

 Background to the judicial review proceedings

Mining Charter III1 came into force on Friday, 1 March 2019 – almost three years after the DMRE circulated a first draft for public comment.2

While the Charter was a significant improvement on the Reviewed Broad-Based Black Economic Empowerment Charter for the South African Mining Industry, 20173 which former Mineral Resources Minister, Mosebenzi Zwane, published in June 2017 and subsequently withdrew, it still contained a number of provisions that were a cause for concern. As we previously discussed (here) these included:

  • onerous re-empowerment obligations for the renewal and transfer of existing mining rights;

  • the BEE Shareholding top-up requirements for pending applications; and

  • the Minister’s seemingly unlimited ability to review and revise the obligations imposed under the Charter from time to time.

In an attempt to address these concerns, the DMRE and the Minerals Council South Africa (Minerals Council) engaged in a series of consultations following the publication of the Charter in September 2018. The parties were, however, unable to find common ground and on 26 March 2019, the Minerals Council instituted a judicial review of the Charter in which it requested the Gauteng Division of the High Court of South Africa (High Court or the Court) to set aside certain of its provisions.4

The judicial review application was heard before a full bench of High Court on 3 to 6 May 2021 and judgment was delivered on 21 September 2021.

  Applicant’s and respondents’ contentions

The applicant, the Minerals Council, sought to review and set aside certain provisions of the Charter (impugned provisions). If the High Court declined the request, the Minerals Council, in the alternative, requested the Court to declare that the impugned provisions were inconsistent with the principle of legality which is enshrined under section 1(c) of the Constitution of the Republic of South Africa, 1996 (Constitution). If the Court agreed with the relief sought, the Minerals Council also requested it to set aside the impugned provisions.

The community respondents (comprising three communities affected by mining operations, three organisations representing these affected communities, and two trade unions) did not oppose the relief sought by the Minerals Council. The main concern raised by the community respondents was that, despite mine hosting communities bearing the disproportionate burden of the negative impacts of mining, they had received little to no direct benefit from this.5 As a result, they argued that the Charter did not go far enough in addressing the objects of the Constitution, the Mineral and Petroleum Resources Development Act, 2002 (MPRDA) in general and section 100(2) in particular.6

The Minister of Mineral Resources and Energy (Minister) and the South African Diamond and Precious Metals Regulator (jointly, the State Respondents) opposed the relief sought by the Minerals Council as well as the community respondents. In response, the State Respondents contended that section 100(2) of the MPRDA empowered the Minister to make law through the development of the Charter. The Charter, it was contended, constitutes a unique (sui generis) form of subordinate legislation which is directly binding on the holders of mining rights. 

  Question in dispute

The question in dispute concerns the ambit of the powers of the Minister under section 100(2) of the MPRDA to make law in the form of subordinate legislation, as well as the legal nature and role of the Charter in the context of the MPRDA.

At issue, therefore, is whether the Charter constitutes law or policy.

A related question is whether the development of the Charter by the Minister constitutes administrative action which is reviewable under the Promotion of Administrative Justice Act, 2000. In the alternative, whether it should be tested against the principle of legality.

  High Court’s decision and the relief ordered

The High Court found that section 100(2) does not empower the Minister to make law.

In a carefully considered judgment, Judge Kathree-Setiloane, writing for the full bench, explained that the answers to the parties’ questions must be determined by considering the wording of section 100(2) of the MPRDA (“the empowering provision”):

(2) (a) To ensure the attainment of the Government’s objectives of redressing historical, social and economic inequalities as stated in the Constitution, the Minister must within six months from the date on which this Act takes effect develop a broad-based socio-economic empowerment Charter that will set the framework for targets and time table for effecting the entry into and active participation of historically disadvantaged South Africans into the mining industry, and allow such South Africans to benefit from the exploitation of the mining and mineral resources and the beneficiation of such mineral resources.

 (b) The Charter must set out, amongst others, how the objects referred to in section 2 (c), (d), (e), (f) and (i) can be achieved. [own emphasis added]

The judgment did not express any views on the need to “[redress] historical, social and economic inequalities as stated in the Constitution”.7 Instead, it illustrates that the Legislature’s decision to use words such as “charter”, “develop” and “can” indicate that document which the Minister is required to develop is policy and not law. The judgment also held that it is not insignificant that the words “law” and “regulation” are mentioned in various other sections of the MPRDA, but do not appear in section 100(2).

In light of this, the Court ruled that the Charter was not binding subordinate legislation, but rather an instrument of policy. As the Minister was not lawfully empowered to impose binding obligations under the Charter, the High Court consequently reviewed and set aside those provisions which the Minerals Council identified in its founding papers.8 These include the re-empowerment obligations which the Charter purported to impose on existing mining right holders when they wish to renew or transfer their rights, the Charter’s onerous procurement, supplier and enterprise development targets, as well as some of its penalty and enforcement provisions. (A complete list of the impugned provisions is provided in the schedule which is annexed to this brief.)

  The most significant consequences of the High Court’s decision

  • The empowering provision (section 100(2)) does not entitle the Minister to make law. As a consequence, Mining Charter III is simply a policy document and not a statutory instrument such as an Act or Regulation. It follows that Mining Charter III cannot give rise to legally binding obligations.

  • Owing to its status as a policy document, mining right holders may, but are not legally obliged to, comply with the remaining requirements imposed under the Charter. This is subject to two qualifications:

    • First, not all of the provisions of the Charter were reviewed and set aside by the High Court. For example, the clauses concerning employment equity, human resource development, mine community development, and housing and living conditions still form part of the Charter. These clauses will not automatically impose obligations on the holders of existing mining rights, but may do so if such requirements are incorporated as specific terms or conditions of the relevant mining right.

    • Second, the clauses which were set aside have now been removed from Mining Charter III. A significant example is the Charter’s procurement, supplier and enterprise development requirements imposed under clause 2.2 of Mining Charter III.

  • The Court once again confirmed the “once empowered, always empowered” principle. As a consequence, the Historically Disadvantaged South African (HDSA) ownership status of existing mining right holders who wish to renew or transfer their rights must automatically be recognized by the DMRE.

    • The judgment has a materially positive impact on the security of tenure of existing mining rights holders. As a result, existing mining right holders now know that if they previously satisfied the empowerment requirements imposed under any version of the Charter, they will not be required to do so again.

  • The State Respondents may approach the High Court for leave to appeal the judgment. If so, they will need to bring an application and request leave from the Court before approaching the Supreme Court of Appeal (SCA). The application must be brought within fifteen court days from the date on which the judgment was delivered (in other words, on or before 13 October 2021). If leave to appeal is refused, the Minister could petition the SCA directly. Importantly, an application for leave to appeal is likely to suspend the effect of the judgment pending the outcome of the appeal.

  • Finally, section 107(1)(l) of the MPRDA still empowers the Minister to make regulations regarding “any other matter the regulation of which may be necessary or expedient in order to achieve the objects of this Act”. This may include matters related to “redressing historical, social and economic inequalities as stated in the Constitution”.

  Mining Charter III clauses set aside by the High Court

Impugned provision

Content of the clause

Introductory sentence of clause 2.1 insofar as it provides that “a mining right holder must comply with the following”

Clause 2.1 Ownership

To give effect to meaningful economic participation; integration into the mainstream economy; and effective ownership of the country’s mineral resources by the Historically Disadvantaged Persons’, a mining right holder must comply with the following:

Clause 2.1.1.2 insofar as it applies to the renewal of a mining right

Clause 2.1.1.2 (Existing Mining Rights)

An existing mining right holder who, at any stage during the existence of a mining right, achieved a minimum of 26% BEE shareholding, and whose BEE partner/s exited prior to the commencement of the Mining Charter, 2018, shall be recognised as compliant for the duration of a mining right and such recognition will not be applicable upon renewal.

Clause 2.1.1.5 insofar as it applies to the renewal of a mining right

Clause 2.1.1.5 (Existing Mining Rights)

The recognition of continuing consequences shall not apply to an application for a new mining right or renewal of a mining right.

Clause 2.1.1.6 insofar as it applies to the renewal of a mining right

Clause 2.1.1.6 (Existing Mining Rights)

A renewal of an existing mining right shall be subject to Mining Charter requirements applicable at the time that a mining right renewal application is lodged.

Clause 2.1.6.2 insofar as it applies to the renewal of a mining right

Clause 2.1.6.2 (Disposal of BEE Shareholding in Respect of Existing and New Mining Rights)

The recognition of consequences of previous deals shall not be claimed against future mining rights or mining right renewal applications.

Clause 2.1.1.4

Clause 2.1.1.4 (Existing Mining Rights)

The recognition of continuing consequences, in respect of an existing mining right, shall not be transferrable and shall lapse upon transfer of such mining right or part thereof.

Clause 2.1.3.2

Clause 2.1.3.2 (New Mining Rights)

A minimum of 30% BEE shareholding must be distributed in the following manner:

(i) A minimum of 5% non-transferable carried interest to qualifying employees from the effective date of a mining right.

(ii) A minimum of 5% non-transferrable carried interest or a minimum 5% equity equivalent benefit as defined herein to host communities from the effective date of a mining right.

(iii) A mining right holder shall ensure that any reduction in shareholding of existing shareholders through the issue of new shares, shall not reduce qualifying employees carried interest and host communities’ carried interest or equity equivalent benefit.

(iv) A minimum of 20% effective ownership in the form of shares to a BEE Entrepreneur, 5% of which must preferably be for women.

(v) A mining right holder of the minimum 20% shares referred to in subparagraph (iv) shall not be diluted below 51% ownership and control by BEE Entrepreneur.

Clause 2.1.4

Clause 2.1.4 Equity Equivalent Benefit for Host Communities

2.1.4.1 The equity equivalent benefit referred to in paragraph 2.1.3.2 (ii) shall be administered as follows:

2.1.4.1.1 5% equivalent of the issued share capital of the mining right holder, at no cost to a trust or similar vehicle set up for the benefit of host communities;

2.1.4.1.2 The Trust or similar vehicle shall be established and administered in terms of applicable legislation for the duration of the mining right;

2.1.4.1.3 The Trust or similar vehicle shall comprise of representation from host communities (including Community Based Organisations, Traditional Authorities, etc.) and mining companies;

2.1.4.1.4 A mining right holder must, in consultation with relevant municipalities, host communities, traditional authorities and affected stakeholders; identify host community development needs;

2.1.4.1.5 The Trust or similar vehicle shall be responsible for, amongst others, host community development programme, fund distribution and governance of the equity equivalent benefit;

2.1.4.1.6 All administration costs, project management and consultation fees of the Trust or similar vehicle may not exceed 8% of the total budget;

2.1.4.1.7 An approved host community development programme must be published in, at least, two languages commonly used within the host community.

2.1.4.2 A host community development programme approved under this element shall not replace Social and Labour Plan commitments as contemplated in Section 23 of the MPRDA.

Clause 2.1.5.2

Clause 2.1.5.2 (Vesting of BEE Shareholding for New Rights)

The prescribed minimum 30% target shall apply for the duration of a mining right.

Clause 7.2

Clause 7.2 (Applicability of the Mining Charter)

For Mining right holders, the Ownership and Mine Community Development elements are ring-fenced, requiring 100% compliance at all time.

The proviso to clause 2.1.6.1, in clauses 2.1.6.1.1 to 2.1.6.1.4

Clause 2.1.6.1 (Disposal of BEE Shareholding in Respect of Existing and New Mining Rights)

Where a BEE shareholding or part thereof is disposed of below the prescribed minimum shareholding, a mining right holder’s empowerment credentials shall be recognised for the duration of the mining right, provided that:

2.1.6.1.1 A mining right holder is compliant with the requirements of the Mining Charter, 2018 at the time of disposal;

2.1.6.1.2 The BEE shareholder must have held the empowerment shares for a minimum period equivalent to a third of the duration of the mining right, and an unencumbered net value must have been realised;

2.1.6.1.3 The recognition of empowerment credentials shall only be applicable to measured effective ownership which has vested to BEE shareholding; and

2.1.6.1.4 An agreement detailing exit mechanisms and BEE shareholders’ remaining financial obligations constituting a contract between the mining right holder and BEE shareholders is submitted to the Department.

The heading of clause 2.1.6 insofar as it refers to “existing rights”

Clause 2.1.6

Disposal of BEE Shareholding in Respect of Existing and New Mining Rights

The definition of “beneficiation” and clauses 2.1.7.1 (including clauses 2.1.7.1.1 to 2.1.7.1.5) in the following respects:

  • setting aside the definition of beneficiation and substituting it with the definition of beneficiation in section 1 of the Mineral and Petroleum Resources Development Act, 2002;

  • setting aside the words “against a BEE Entrepreneur” where they appear in clause 2.1.7.1;

  • setting aside the words “a maximum of 5 percentage points of a BEE Entrepreneur” where they appear in clause 2.1.7.1.1;

  • setting aside the whole of clauses 2.1.7.1.2 to 2.1.7.1.5;

“Beneficiation” for purposes of the Mining Charter, beneficiation means the transformation, value addition or downstream processing of a mineral or mineral product (or a combination of minerals) to a higher value product, over baselines to be determined by the Minister, which can either be consumed locally or exported;

Clause 2.1.7.1 (including 2.1.7.1.1 to 2.1.7.1.5) (Beneficiation Equity Equivalent Against the Ownership Target)

South Africa adopted a strategy on mineral beneficiation to give effect to the National Industrialisation Programme. To this end, this element provides for an equity equivalent mechanism against a BEE Entrepreneur as follows:

2.1.7.1.1 A mining right holder may claim the equity equivalent against a maximum of 5 percentage points of a BEE Entrepreneur shareholding.

2.1.7.1.2 An existing mining right claimed the eleven (11) percentage points beneficiation offset prior to the commencement of Mining Charter, 2018, shall retain the offset for the duration of the mining right.

2.1.7.1.3 Equity Equivalent may only be claimed against a portion of BEE Entrepreneur.

2.1.7.1.4 A mining right holder must submit to the Department a Beneficiation Equity Equivalent Plan for approval, as outlined in the Mining Charter implementation guidelines.

2.1.7.1.5 A mining right holder will be entitled to apply for equity equivalent credits subject to the following:

i. Mineral ore or mineral products supplied to independent South African based beneficiation entities at a discount to the mine gate price;

ii. Portion of an integrated producer’s production that is beneficiated;

iii. Mineral ore supplied to BEE Entrepreneur owned beneficiation entities at a discount to the mine gate price;

iv. Monetary investment in South African based mineral beneficiation entities;

v. Any other existing beneficiation related activities undertaken, or monetary investment made since 2004.

Clause 2.2

Clause 2.2 Inclusive Procurement, Supplier and Enterprise Development

Procurement of South African manufactured goods and services provide opportunities for expanding economic growth, creating decent jobs and widening market access to the country’s goods and services.

A mining right holder is required to promote economic growth through the development or nurturing of small, medium and micro enterprises and suppliers of mining goods and services. In instances where a mining right holder procures goods and services of a contractor to undertake extraction or processing (crushing and concentration) of minerals in their behalf, such goods and services will be deemed to have been procured by the mining right holder.

To achieve inclusive procurement, supplier and enterprise development; a mining right holder must identify all goods and services that will be required in its operations and ensure that its procurement policies adhere to the following criteria:

2.2.1 Mining Goods

2.2.1.1 A minimum of 70% of total mining goods procurement spend (excluding non-discretionary expenditure) must be on South African manufactured goods. The 70% shall be allocated as follows:

2.2.1.1.1 21% to be spent on South African manufactured goods produced by a Historically Disadvantaged Persons owned and controlled company;

2.2.1.1.2 5% to be spent on South African manufactured goods produced by a women or youth owned and controlled company; and

2.2.1.1.3 44% to be spent on South African manufactured goods produced by a BEE compliant company.

2.2.2 Services

2.2.2.1 A minimum of 80% of the total spend on services (excluding non-discretionary expenditure) must be sourced from South African based company. The 80% shall be allocated as follows:

2.2.2.1.1 50% must be spent on services supplied by Historically Disadvantaged Persons owned and controlled company;

2.2.2.1.2 15% must be spent on services supplied by women owned and controlled companies;

2.2.2.1.3 5% must be spent on services supplied by youth; and

2.2.2.1.4 10% must be spent on services supplied by BEE compliant company.

2.2.2.2 The above-mentioned procurement targets must be complied with progressively within a period of five (5) years, as outlined in the transitional arrangements.

2.2.2.3 A mining right holder must ensure that the terms and conditions offered to women owned and controlled companies, or youth, are not less favourable than those offered to other suppliers.

2.2.2.4 All procurement expenditure reported must be the actual expenditure incurred by a mining right holder.

2.2.3 Verification Of Local Content

2.2.3.1 A mining right holder must procure goods in line with a standardised product identification coding system developed by the Department of Trade and Industry.

2.2.3.2 A mining right holder shall provide proof of local content for mining goods in the form of certification from the South African Bureau of Standards (SABS) or any other entity designated by the Minister.

2.2.4 Enterprise And Supplier Development

(a) The purpose for implementing supplier and enterprise development is to strengthen local procurement; enhance the ease and cost competitiveness of sourcing mining goods and services and build South Africa’s industrial base in critical sectors of production and value addition.

(b) A mining right holder may invest in enterprise and supplier development against which it may offset its procurement element obligations as follows:

2.2.4.1 Mining Goods

2.2.4.1.1 Up to 30% of the total procurement budget on mining goods (excluding non-discretionary expenditure) may be offset against supplier development.

2.2.4.1.2 A mining right holder may develop suppliers through Original Equipment Manufacturers (OEMs) as prescribed in the Implementation Guidelines.

2.2.4.2 Services

2.2.4.2.1 Up to 10% of the total procurement budget on services (excluding non-discretionary expenditure) may be offset against supplier and enterprise development.

2.2.4.2.2 Percentages referred to in 2.2.4.3.1 and 2.2.4.4.1 must be implemented as follows:

(a) Supplier and Enterprise Development must be invested only in a Historically Disadvantaged Persons owned and controlled company with a turnover of less than R50 million per annum;

(b) Investment on Supplier Development may not be claimed as expenditure on Enterprise Development;

(c) There must be a written agreement between a mining right holder and the recipient Supplier or Enterprise being developed; and

(d) The contract between a mining right holder and the recipient supplier must be for a minimum of 5 years.

2.2.5 Research And Development

2.2.5.1 A mining right holder must spend a minimum of 70% of its total research and development budget on South African based research and development entities, either in public or private sector.

2.2.6 Processing Of Samples

2.2.6.1 A mining right holder must use South African based facilities or companies for the analysis of 100% of all mineral samples across the mining value chain.

2.2.6.2 A mining right holder may not conduct sample analysis using foreign-based facilities or companies without the prior written consent of the Minister, as prescribed in the Mining Charter implementation guideline.

Insofar as the following clauses relate to existing or new licences and permits issued in terms of the Diamonds Act, 1986 and the Precious Metals Act, 2005, clauses 4, 6.2, 7.1, 7.3, 8.7, 8.8, 8.9 and 9.2

Clause 4 Application Of The Mining Charter To Licences Granted Under The Precious Metals Act, 2005 And The Diamonds Act, 1986

The Diamonds Act, 1986 and the Precious Metals Act, 2005 provide for the South African Diamond and Precious Metals Regulator (SADPMR) to have regard to the requirements of the Mining Charter, 2018 when considering applications lodged in terms of these Acts.

4.1 Application And Definition Of Concepts

4.1.1 For purposes of this part, definitions and Clause 2 shall apply with the necessary changes;

4.1.2 Any reference in definitions and Clause 2 of the Mining Charter, 2018 to:

4.1.2.1 Mine Community Development Element must be construed as reference to Socio Economic Development;

4.1.2.2 Mining goods must be construed as reference to capital goods and consumables; 

4.1.2.3 Mining right holder must be construed as reference to a licence or permit issued in terms of the Precious Metals Act and the Diamonds Act; 

4.1.3 The targets and elements of the Mining Charter, 2018 shall therefore apply to licences under these Acts in line with the table below.

4.1.4 Recognising the extent of the exemption in terms of the tables below, a permit or licence holder in terms of the Precious Metals Act and the Diamonds Act shall comply with relevant elements and targets as set out in the Mining Charter, 2018

4.2 Threshold For Precious Metals Jewellers And Precious Metals Beneficiators

Category/size or class

Qualifying criteria

Exempt from the following targets

Required to comply with the following targets

Exempted Micro Enterprises (including students)

Estimated max turnover less than R 1 million

All Mining Charter Elements and Targets

None

Small Enterprises

Estimated max turnover less than R 50 million

Socio Economic Development Element

Ownership: Undefined

Inclusive Procurement, Supplier and Enterprise Development Element

Human Resource Development Element

Employment Equity Element (in respect of businesses with less than 10 employees)

Employment Equity Element (in respect of businesses with than 10 or more employees)

Medium to Larger Enterprises

Greater than R 50 million

None

All Elements of the Mining Charter

4.3 Thresholds for Diamond Beneficiators

Category/size or class

Qualifying criteria

Exempt from the following targets

Required to comply with the following targets

Small Enterprises

Turnover of less than R 50 million

Socio Economic Development Element

Ownership: Undefined

Human Resource Development Element

Employment Equity Element (in respect of businesses with less than 10 employees)

Employment Equity Element (in respect of businesses with than 10 or more employees)

 

Inclusive Procurement, Supplier and Enterprise Development Element

Medium to Larger Enterprises

Greater than R 50 million

None

All Elements of the Mining Charter

4.4 Threholds for Diamond Dealers, and Precious Metals Refiners

Category/size or class

Qualifying criteria

Exempt from the following targets

Required to comply with the following targets

All categories, classes and sizes

None

None

All elements of the Charter

4.5 Application Of The Ownership, Inclusive Procurement, Enterprise And Supplier Development And Socio- Economic Development Elements

4.5.1 Ownership

4.5.1.1 In line with the Government policies to encourage beneficiation of the country’s mineral resources, the ownership target for the downstream diamonds and precious metals jewellers and diamond beneficiators is a minimum of 26% shareholding for Historically Disadvantaged Persons.

4.5.1.2 The 26% BEE shareholding must be distributed in the following manner:

4.5.1.2.1 A minimum of 10%, of which 5% is a non -transferable carried interest, to qualifying employees from the effective date of a licence or permit.

4.5.1.2.2 A minimum of 16% shares to a BEE entrepreneur.

4.5.1.3 The 30% BEE shareholding by diamond dealers, and precious metals refiners must be distributed as follows:

4.5.1.3.1 A minimum of 10 %, of which 5% is a non -transferable carried interest, to qualifying employees from the effective date of a licence or permit.

4.5.1.3.2 A minimum of 20% shares to a BEE entrepreneur.

4.5.1.4 Where a refiner is also a mining right holder and claims the same BEE shareholders as those claimed in terms of the mining right, the flow through principle applies.

4.5.2 Socio- Economic Development

4.5.2.1 The licence holder must contribute 1% NPAT towards socio- economic development.

4.5.2.2 Projects identified for socio economic development must be published in English and one other language.

4.5.3 Inclusive Procurement And Enterprise Development

4.5.3.1 Enterprise development for a licence or permit issued in terms of the Diamonds Act or the Precious Metals Act is compulsory and a ring- fenced element.

4.5.3.2 Enterprise development under this section must be industry-related and approved by the South African Diamonds and Precious Metals Regulator.

4.5.3.3 A licence or permit holder required to comply with this element, as per the thresholds provided for above, must submit a five-year plan indicating progressive implementation of the approved enterprise development.

4.5.3.4 A licence or permit holder’s performance on enterprise development must be reported, audited and verified annually against the approved five-year plan.

Clause 6.2 Reporting By Holders Of Licences Or Permits Issued In Terms Of The Diamonds Act And The Precious Metals Act

A holder of a licence or permit issued in terms of the Diamonds Act or the Precious Metals Act must annually report its level of compliance with the Mining Charter, 2018 to the South African Diamonds and Precious Metals Regulator. The SADPMR shall monitor and evaluate implementation, cognisant of the impact of material constraints that may result in the non -achievement of the set target.

Clause 7.1 (Applicability of the Mining Charter)

The Mining Charter, 2018 applies to existing mining rights, pending mining right application, new mining rights, existing licences and permits issued in terms of the Diamonds Act and Precious Metals Act and new licences and permits issued in terms of the Diamonds Act and the Precious Metals Act as provided for herein

Clause 7.3

For holders of licences or permits issued in terms of the Diamonds Act and the Precious Metals Act, the Ownership and Inclusive Procurement, Supplier and Enterprise Development elements are ring- fenced elements requiring 100% compliance at all time.

Clause 8.7 (Transitional Arrangements)

Pending applications for licenses and permits lodged in terms of the Diamonds Act or The Precious Metals Act, with the Regulator prior to the date of publication of the Mining Charter, 2018, must be processed in terms of the Mining Charter, 2010 or requirements prescribed in Clause 3 of the Codes of Good Practice for the Minerals Industry published under Gazette No. 32167 of 29 April 2009, whichever is applicable.

Clause 8.8

Holders of licenses or permit issued in terms of the Diamond Act and the Precious Metals Act which are due for renewal within a period of six (6) months from the date of publication of the Mining Charter, 2018 must within a period of twelve (12) months from the date of renewal of the licence or permit comply with the Mining Charter, 2018.

Clause 8.9

Existing mining right holders, existing licence and permit holder must implement the Mining Charter, 2018 from the 01 March 2019. Before 1 March 2019, existing right holders and existing licence and permit holders must maintain compliance with the requirements of the Mining Charter, 2010.

Clause 9.2 (Non-compliance)

A licence or permit holder who has not complied with ownership and enterprise development elements shall be in breach of the Diamonds Act or Precious Metals Act and subject to relevant provisions of the Diamonds Act or Precious Metals Act.

Clause 9.1

Clause 9.1 (Non-compliance)

A mining right holder who has not complied with the ownership and mine community development elements and falls between levels 6 and 8 of the Mining Charter scorecard shall be in breach of the MPRDA and subject to provisions of section 93, read in conjunction with section 47, 98 and 99 of the Act.