South Africa: What You Need To Know About The Draft Reviewed Mining Charter

Last Updated: 28 April 2016
Article by ENSafrica Mining Department

Most Read Contributor in South Africa, September 2016

On 15 April 2016, the Minister of Mineral Resources, Mosebenzi Zwane (the "Minister"), unexpectedly published the draft Reviewed Broad Based Black-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2016 ("draft reviewed Mining Charter").

The timing of its publication means that the fate of the Chamber of Mines' current High Court application now hangs in the balance. The Chamber has asked the court for a declaratory order relating to the application of the 2010 Mining Charter, and the "once empowered, always empowered" issue in particular.

There may be many reasons (legitimate or not) for the "surprise" nature of the revised draft. The one less controversial reason relates to the need to avoid conflict between empowerment in the mining industry, the provisions of the Broad-Based Black Economic Empowerment Act, 2003 and the DTI Codes (collectively referred to as the "DTI Laws").

The draft reviewed Mining Charter, published under Notice 450 of Government Gazette 39933, is open for public comment by interested and affected parties until 31 May 2016. Below is a summary of its key provisions.


Every holder of a mining right must achieve a minimum target of 26% ownership. No less than 5% of that 26% must be held by an Employees Share Ownership Scheme, black entrepreneurs and the community, respectively, with this stake housed in a special purpose vehicle.

Where a black economic empowerment ("BEE") partner or partners have exited, the BEE contract has lapsed or the previous BEE partner has transferred shares to a non-BEE company, the mining right holder must, within the three-year transitional period from the date of publication of the draft reviewed Mining Charter, review its empowerment credentials to ensure that they are consistent with the Mining Charter.

The question of whether the law currently requires the continuing obligation to replenish any diminution of the 26% black empowerment shareholding is, as mentioned above, currently the subject of litigation between the Chamber of Mines (on behalf of mining companies) and the Department of Mineral Resources.


The thresholds for how many goods are to be procured from BEE companies have increased across capital goods, consumables and services. In addition, thresholds have been included that give preference to smaller BEE-compliant businesses over larger ones.

Socio-economic development

Each year, multinational suppliers of goods must contribute 1% of annual turnover generated from local mining companies towards a social development trust fund established by the Minister for socio-economic development of local communities and capacity building for BEE suppliers. This is an increase compared to the 2010 Mining Charter, which required a 0.5% contribution. The establishment of the trust is an innovation that did not previously exist.

Employment equity

  • executive management must have a minimum of 50% black employees with exercisable voting rights (as opposed to the 40 % requirement in the Mining Charter 2010), 15% of which must be black females.
  • senior management must have a minimum of 60% black employees, of which 30% must be black females.
  • middle management must have a minimum of 75% black employees (as opposed to the 40% requirement in the Mining Charter 2010), 38% of which must be black females.
  • junior management must have a minimum of 88% black employees (as opposed to the 40% requirement in the Mining Charter 2010), 44% of which must be black females.

A new requirement of 2% of black employees with disabilities has been introduced.

Human resource development

The requirement to invest 5% of the annual payroll has not changed; however, holders are now required to invest 15% of the aforementioned 5% in a ministerial skills development trust fund. Exemptions may be obtained in very limited circumstances.

Mine community development

The draft reviewed Mining Charter requires a holder to annually contribute a minimum of 1% of annual turnover towards local community development and labour-sending areas.

Housing and living conditions

Like the 2010 Mining Charter, the draft reviewed Mining Charter maintains the occupancy rate of one person per unit and the maintenance of family units however, the draft reviewed Mining Charter, now introduces the requirement to contribute towards home-ownership options for interested mine employees, in consultation with organised labour.

Precious Metals and Diamonds Acts

The draft reviewed Mining Charter provides for the applicability of the Mining Charter to permits/licences granted under the Precious Metals Act, 2005 ("Precious Metals Act") and the Diamonds Act, 1986 ("Diamonds Act"). There are exemptions available for micro, small and some medium to large entities, depending on the turnover of the entity, and the amount of metal produced per annum.

Applicability of targets

The draft reviewed Mining Charter states that all targets stipulated in the Mining Charter will apply throughout the life of a mine, unless the specific element specifies otherwise. In this regard, existing mining right holders and holders of and permits or licences granted under the Precious Metals Act and the Diamonds Act must comply with their targets until the end of their operations or termination of the mining right or licence/permit.

The requirements of ownership, housing and living conditions, and human resources development are ringfenced and, therefore, mining companies that are not exempt will have to fully comply with the targets at all times.

Transitional arrangements

The draft reviewed Mining Charter gives existing mining right holders a maximum of three years to comply with the revised targets of the Mining Charter from the date of its publication. It would seem that this provision only applies to holders of mining rights and not holders of licences or permits granted under the Precious Metals Act and the Diamonds Act.


The draft reviewed Mining Charter provides that mining right holders who have not complied with the ownership, housing and living conditions, and human resources development elements, and those who fall between level 6 and 8 of the Mining Charter scorecard, will be regarded as non-compliant with the provisions of the Charter and the Mineral and Petroleum Resources Development Act, 2002 ("MPRDA"), in terms of which the mining right holder will be in breach and subject to the relevant sanctions.

Originally published on 22 Apr 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.