Although the revised Mining Charter attempts to address a number of its predecessor's shortcomings, in some respects it may paradoxically add to regulatory uncertainty within the South African mining industry, regulatory lawyer Peter Leon said shortly after Mineral Resources Minister Susan Shabangu released the long-awaited document to the media.

Leon said that the most far-reaching change was that noncompliance with the revised Mining Charter would amount to a breach of the Mineral and Petroleum Resources Development Act (MPRDA), resulting in the suspension or cancellation of licences granted under the Act.

"Clothing the Mining Charter with the force of law may well not withstand constitutional scrutiny, in addition to vitiating its consensual nature", Leon, a partner and cohead of mining at law firm Webber Wentzel and the chairperson of the International Bar Association's mining law committee, said.

In addition, the Minister was entitled to amend the Mining Charter unilaterally, thus perpetuating the problem of overly broad administrative discretion, Leon commented.

On a positive note, the revised Mining Charter's 26% historically disadvantaged South African (HDSA) ownership requirements had not been altered. In addition, the revised charter defined the term "beneficiation" and spelt out for the first time that mining companies were allowed to offset up to 11% of their HDSA ownership requirements against the value of their beneficiation activities.

South Africa's Chamber of Mines president Sipho Nkosi, who was among the many stakeholders present at the announcement of the revised Mining Charter, commented that the incremental progress that government, labour and business were making did not mean that "we have reached finality or reached perfection. It's a process and the process continues".

"At the end of the day, it's all about ensuring that this industry remains vibrant and viable. We hope that, as we move forward, we'll hold hands and continue making sure that we panelbeat this thing, so that it makes sense for the South African mining industry," Nkosi said.

The original Mining Charter committed government, labour and business to first-phase targets over a five-year period that ended in October 2009, but Shabangu said that the minimums that had been agreed upon had not been achieved.

At the first-phase October 2009 deadline date, 8,9% BEE ownership had been achieved, and not the targeted 15%, and employment equity was 7% short of the 40% HDSA target.

"What was required as of October 2009, we are sad to say, has not been achieved," added Shabangu, who was flanked by Department of Mineral Resources (DMR) director-general Sandile Nogxina and the Minister's adviser Dr Iraj Abedian.

Distributed by the DMR to the media were scorecards for the revised Mining Charter, covering aspects such as annual reporting; abolition of the hostel system by 2014; 40% BEE procurement in capital goods; 40% employment equity in top management; a 25% weighting for skills development – the highest single weighting; a 15% weighting for the development of near-mine communities; a 12% weighting for sustainable development and growth; and contribution of a mining company towards value addition to metals and minerals through beneficiation, which could now also be an 11% alternative to BEE ownership.

While for the first time the charter contained a number of helpful definitions, Leon said that some were vague and imprecise or did not conform with the definitions in the MPRDA itself, which might contribute to further regulatory uncertainty.

In addition, many of the soft requirements of the previous Mining Charter had been hardened.

For example, mining companies were now required to procure 40% of their capital goods from HDSA-owned suppliers by 2014.

In addition, the revised charter laid down that multinational suppliers of capital goods were required to contribute a minimum of 0,5 % of their locally generated annual income towards a "social development fund" for the benefit of local communities, but failed to deal with the manner in which the fund was to be administered.

Although the mining industry had committed itself to changing its procurement policies in the June 30 "stakeholders' declaration on strategy for the sustainable growth and meaningful transformation of South Africa's mining industry", Leon said that the industry was unlikely to have anticipated that it would be required to make such a significant contribution to a social development fund.

Also, the revised Mining Charter required BEE beneficiaries to have "full shareholder rights", in seeming conflict with the Companies Act of 1973, which laid down that only shareholders were entitled to shareholder rights.

"Owing to the lengthy time line of many BEE transactions, BEE beneficiaries may not always be shareholders in a company for some time," Leon pointed out.

National Union of Mineworkers (NUM) president Senzeni Zokwana stressed that noncompliance with the revised Mining Charter would equate to a contravention of the MPRDA.

Zokwana said that those with the power to attain targets should be forced by government to attain them.

The union leader added that, had NUM had more time at its disposal, it could have gone on strike at mining companies that had failed to attain the targets.

"We should be harsh to those who are not pulling their weight," Zokwana added.

South African Mining Development Association (Samda) chairperson Nchakha Moloi said that government was not governing and not implementing the law as harshly as it should.

"We have still to see just one company lose its mining licence," Moloi said.

He said that the mining industry was "willy-nilly" allowed to break the law without consequence.

"From now on, there should be consequences," he added.

He said that Samda's own research had shown that mining industry noncompliance with the Mining Charter was worse than the Minister had found.

"We're unhappy that government is not putting its foot down," Moloi said.

Solidarity senior organiser Louis Pretorius said that his labour movement would like to see the declining South African mining industry restored to its former glory.

Pretorius said that the country had resources worth $2,5-trillion at its disposal and that, in the revised Mining Charter, it now now also had a document with clear goals that it should set out to achieve.

United Association of South Africa (UASA) divisional manager Franz Stehring said that the revised Mining Charter was a weighted control system whereby issues could be addressed in a corrective manner every year rather than in a punitive manner.

"In a growing industry, we can fix the things that we need to fix," the UASA spokesperson added.