Categorized | Government, Mining

Anglo American voices concern over Reviewed Mining Charter

AngloOn the backdrop of comments made by Department of Minerals and Natural Resources Minister, Mosebenzi Zwane at the Mining Indaba recently held in Cape Town, Anglo American has issued a statement. The minister used the opportunity at the Mining Indaba to inform stakeholders about the revised Mining Charter. “With regard to the regulatory tool governing transformation in the sector, we have consulted extensively with stakeholders,” he said. Minister Zwane mentioned the final Mining Charter will be gazetted by March 2017 and will be reflective of the views of stakeholders, in the interests of South Africa and provide for investor certainty. “We call upon investors to come to South Africa and engage us frankly as we move towards transformation of our economy. We will have an open door policy,” said the Minister.

In a statement on Johannesburg Stock Exchange (JSE) information dissemination service, SENS, Anglo American said it recognises the invaluable contribution that mining has made, and continues to make, to South Africa’s economic and social landscape. The Mining Charter provides important guidelines in advancing the transformation of the mining industry, covering a range of transformation pillars-from ownership, mine community development, employment equity, housing, to living conditions and procurement. “The Company is confident that it has met its targets, in accordance with the current Mining Charter,” the statement read.

A proposed Draft Reviewed Mining Charter was published on 15 April 2016 in the Government Gazette. Anglo American Platinum-through a submission by Anglo American plc-has voiced its serious concerns regarding the Draft Reviewed Mining Charter, and called amongst others for a regulatory impact assessment to be conducted by the Government to determine the potential consequences of the Draft Reviewed Mining Charter on the mining industry and South African economy. “The Company believes that were a Draft Reviewed Mining Charter to result from an agreement between Government and industry (as was the case previously in 2004 and 2010), the effect would be greatly enhanced regulatory certainty and investor confidence.

The Company remains committed to working with the Department of Mineral Resources (DMR), through the Chamber of Mines, to ensure the industries concerns are appropriately addressed.”

In other news, the mining giant’s subsidiary, Atomatic has issued 26% shares to a BEE partner. “As part of Amplats’ commitment to transformation, Atomatic has issued 26% of its own shares to a BEE partner, Baphalane Siyanda Chrome Company Proprietary Limited (BSCC) which was primarily funded by way of cumulative, non-convertible and redeemable preference shares by the Amplats group,” a statement read.

Anglo said for accounting purposes, the shares issued by Atomatic have been treated as an option over its own equity, which resulted in a once-off share-based BEE expense of R156 million on initial recognition of the transaction. “The option was effectively granted in 2014 when the transaction was substantively agreed to by all parties as there were no conditions which would have resulted in the deal subsequently being cancelled.” Anglo said the transaction, however vested in 2016 when the plant was commissioned and transferred to Atomatic. “The fair value was determined based on a discounted cash flow of the business at grant date using a risk adjustment discount rate,” it concluded.

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