23 Apr

South Africa to Appeal Ruling on Black Ownership of Mines

South Africa has sought leave to appeal a court judgment earlier this month over a crucial black-ownership principle in the country’s Mining Charter, the nation’s mining lobby said.

The Chamber of Mines has been notified that Mineral Resources Minister Gwede Mantashe and the Department of Mineral Resources filed the application, it said in a statement Monday.

The High Court in Pretoria on April 4 ruled that the first two versions of the country’s charter didn’t require producers to top up black-shareholding levels in perpetuity if they previously met the minimum 26 percent requirement.

“The chamber is currently reviewing the specified grounds of appeal, although the DMR’s appeal appears to center on the majority judges obiter dictum comments about the legality of the 2010 charter and the enforceability of the charters,” the lobby group said.

The development is another volley in a longstanding legal battle to clarify the charter rules. The case was revived last year by the chamber, which sought a declaratory order on the so-called “once empowered, always empowered” principle.

The group has argued that companies can reach the black-ownership requirements by counting previous sales to black investors, even if those investors later sold their shares to whites or foreigners. The Department of Mineral Resources didn’t immediately return an email and call seeking comment.

South Africa has the world’s biggest reserves of platinum and manganese, and its mineral deposits also include gold, iron ore, coal, chrome and zinc. Anglo American Plc, Glencore Plc and South32 Ltd. are among companies operating in the country.

Malan Scholes Inc., a Johannesburg-based law firm, has made a separate application to declare current and previous charters unconstitutional because they lack definition and are inconsistent. The chamber opposes the view that the 2004 and 2010 charters are not valid and has agreed to join as a respondent to that application, it said.

Mantashe is holding talks with the industry, unions and mining communities on a new charter, a set of rules aimed at distributing the wealth of the industry more widely. Earlier this month, he said he’s confident that work on the charter will be concluded in May.

Source: https://www.bloomberg.com/news/articles/2018-04-23/south-africa-to-appeal-court-ruling-on-black-ownership-of-mines

18 Apr

Troubled Gupta Coal Mines Threaten South Africa With Power Cuts

South Africa’s state-owned power utility is working with the National Treasury to source more coal for seven of its plants that don’t have adequate supply, raising the specter of a return to rolling power cuts that have periodically slowed the economy since 2008.

 Eskom Holdings SOC Ltd. is diverting coal to the under-resourced stations from facilities that have sufficient supply, spokesman Khulu Phasiwe said on Johannesburg-based broadcaster SAfm.
The supply problems stem from mines run by Tegeta Exploration and Resources Ltd., a struggling company controlled by the politically connected Gupta family, he said.
“There are some difficulties — that’s the situation they’re managing now,” Phasiwe said of Tegeta. “From our side, we’re looking for a replacement supplier as soon as possible to make sure we don’t go back to the days of load shedding, especially as we’re going into winter,” he said, using a local term for rolling blackouts, which the country was forced to last implement in 2015 after seven years of power shortages hindered economic growth.
Tegeta is a company controlled by the Guptas through Oakbay Investments Ltd. and a son of former President Jacob Zuma.
In December 2015, it bought Optimum, which includes a mine of the same name, the Koornfontein operation and a stake in Africa’s biggest coal-export terminal, from Glencore Plc. Last year the company sought higher prices from Eskom for its coal.
Oakbay said in August that it agreed to sell Tegeta for 2.97 billion rand ($247 million) to Swiss company Charles King SA. The disposal was expected to be concluded in 12 months, Oakbay said at the time.