Charter empowers SA miners

South Africa’s new Broad-Based Socio-Economic Empowerment charter is the product of a process that reaffirms the mining sector’s willingness to aid and promote wealth creation opportunities for historically disadvantaged South Africans.

Ongoing discussions remain focused on the process whereby black South Africans will gradually, over five years, acquire at least a 15% ownership stake in mining companies. The estimated monetary value of this equity transfer is R100 billion.

Achievement of the longer-term 26% ownership target will require the support and participation of major stakeholders, including government, industry, and local and international financial institutions.

The South African Chamber of Mines will make every effort to achieve the target of 26% ownership of mining industry assets over 10 years. It is essential that this be accomplished at fair market value and under circumstances that do not expose mining companies to risk.

Preceding the charter deliberations, the country’s mining industry repeatedly expressed its understanding of, and support for, the government’s transformation agenda. As an illustration of this support, Chamber members recently concluded several empowerment transactions with companies owned by blacks. These transactions have cast the mining industry as the leading player in the promotion of black economic empowerment in South Africa, while fostering the emergence of a new breed of successful mining executives.

Since 1997, and without any legislative or regulatory inducement, the industry has concluded real empowerment deals at an ownership level to the tune of R8.5 billion. In addition to these voluntary accomplishments, many empowerment initiatives are being conducted in the areas of procurement, rural development, and employment equity. The value of procurement by mining companies of goods and services from historically disadvantaged businesses is estimated to exceed R5 billion a year.

These significant achievements demonstrate the mining industry’s acceptance of the principle that all South Africans should have equitable access to the nation’s prodigious mineral resources. The empowerment charter signed recently by the government is an important step forward in the realization of this nation-building goal. It should also finally dispel any remaining doubts about the industry’s determination to correct the distortions that occurred under apartheid.

— The preceding is an edited version of a statement released by the Johannesburg-based Chamber of Mines. The author is the Chamber’s vice-president.