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Calls for mining court case to be dropped - Business Day

Wednesday, 12 August 2015

MINING companies have to decide whether or not to proceed with legal action against the Department of Mineral Resources as calls for talks to find a resolution mount.

President Jacob Zuma on Tuesday said the government and the Chamber of Mines were mandated by the Presidential Business Working Group on Friday to "seek an amicable solution outside of the courts" on a dispute centring on the interpretation of the ownership clause in the Mining Charter.

But on Tuesday, chamber CEO Roger Baxter said that while the chamber was talking to the department, the court process would continue.

"While it was suggested at the presidential-business meeting that litigation be suspended and that a negotiated process be pursued, the chamber did not agree to suspend the declaratory order process," he said on Tuesday.

"The declaratory order process will continue unless directed otherwise by the chamber’s council," he said. "The chamber remains committed to seeking a negotiated solution," Mr Baxter said.

Council members include CEOs whose companies stand to be adversely affected if the department’s view on empowerment prevails.

The department has argued in court papers that mining companies needed to have 26% black ownership in perpetuity and that defunct past deals did not count towards empowerment credits. This means firms would need to top up their empowerment levels or lose their mining rights.

Mark Cutifani, CEO of Anglo American, last month urged negotiations to resolve the differences. "We need to sort out the impasse around BEE … because we can’t keep changing the rules. The courts are not the place to sort that issue out on a long-term, sustainable basis," Mr Cutifani said.

Both the chamber and the department have filed affidavits.

"It’s always better to resolve matters outside court. People tend to find each other better outside those parameters," said Mahlodi Muofhe, adviser to Mineral Resources Minister Ngoako Ramatlhodi.

"We have no issue with a parallel process that includes pursuing the declaratory order while at the same time continuing discussions," Gold Fields CEO Nick Holland said on Tuesday.

Gold Fields was singled out in the affidavit by the department’s director-general Thibedi Ramontja as an example of "double-dipping" or claiming the same empowerment transaction as Sibanye Gold, a company formed by the unbundling of three Gold Fields mines.

Gold Fields and Sibanye Gold both claimed the same empowerment transaction with Mvelaphanda Resources for 15% of their credits, he said.

"The combined Gold Fields Group had achieved its empowerment ownership rating prior to the unbundling of Sibanye Gold in February 2013 and the unbundling did not affect the rating," said spokesman Sven Lunsche.

He also said that Gold Fields had a 35% empowerment ownership rating.

Sibanye said the Mvela deal was done on assets ring-fenced and subsequently unbundled. "Sibanye was the company that was empowered through the Mvela deal," said spokesman James Wellsted.

Mr Ramontja accused Harmony of "triple dipping", or also claiming Mvela as a 15% credit for the Rand Uranium assets owned by Sibanye and 24%-owned by Mvelaphanda Holdings.

Harmony had claimed credit for eight transactions "none of these included the Mvela transaction", said spokeswoman Marian van der Walt.

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