Page 10 - Q&A 2019/2020

The new Mining BEE Charter Implementation
Guidelines BEE

February 2019

“My company is the holder of several mining rights. I understand that further
guidelines to the Mining BEE Charter were recently issued that deal extensively
with mining rights holders. What should I take note of under these guidelines?”
The Mining Charter 2018 (“Mining Charter”) was published on 27 September
2018 and the Implementation Guidelines to the Mining Charter (“Guidelines”)
followed shortly thereafter on 19 December 2018. These Guidelines essentially
outline processes, procedures, forms and templates to facilitate compliance
with the Mining Charter by enterprises in the mining industry.

The following general aspects which may apply to you as mining rights holder,
can be highlighted from the Guidelines:
In terms of the Guidelines, all mining right holders must annually report their level
of compliance in terms of Ownership element to the Department of Mineral
Resources.
Existing mining right holders that achieved a minimum of 26% BEE Shareholding
before the commencement of the Mining Charter, must annually report on their
current BEE percentage, the maximum BEE target that was reached as well as
on the meaningful economic participation and full shareholder rights, for the
duration of the mining right.

Mining right holders with pending applications need to increase their BEE
shareholding from 26% to 30% during the 5-year transitional period, and report on
the compliance level of their ownership during this time. In both these instances,
a specific reporting template is prescribed, contained in the Guidelines as Table
A. New mining right holders also need to annually report their level of ownership
compliance according to the provisions in the Mining Charter. In this regard the
Guidelines contain specific forms for reporting in terms of shareholding held by
employees (Table B), host communities (Table C), and BEE entrepreneurs
(Table D).
All mining right holders also need to report on the disposal of shares as well as
exit by BEE shareholders, by providing specific detail (Table E) and supporting
documentation as prescribed in the Guidelines.
There is also a strong emphasis on local procurement and manufacturing within
the Mining Charter and Guidelines. It is required that 70% of mining goods and
80% of mining services must be sourced from South African based companies.

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