Mining Charter III has been finally gazetted by the Minister of Mineral Resources
What does this mean for suppliers to the mining industry?
An article by Israel Noko, CEO of NPI Governance Consulting
As you will already know, Mining Charter III has been finally gazetted by the Minister of Mineral Resources and much of what we have anticipated has come true. By and large, this new Charter appears be to a consensual document (just like Mining Charter II of 2010) between all the major stakeholders and will remain in place for the next 25 years.
As a supplier to the mining industry, below is a summary of what the legislative requirements will be under the element referred to as “Inclusive Procurement, Supplier & Enterprise Development”. What is very clear is that there is a very big drive towards localisation and South African manufactured goods. The highlights that need to be noted are as follows:
- 70% of all mining goods to be from suppliers with 60% local content of which:
- 44% of total mining procurement must be from BEE compliant companies);
- 21% of total mining goods must be SA manufactured goods from HDIs controlled companies;
- 5% of total procurement budget must be SA manufactured goods from youth or women owned and controlled companies.
- 80% of all services to be from BEE entities of which:
- 50% to total services budget must be supplied by HDI owned & controlled companies;
- 15% of total services budget must be supplied by women owned & controlled companies;
- 5% of total services must be from youth owned & controlled companies;
- 10% of total services budget must be from BEE compliant companies.
- 100% of mineral samples to be analysed by SA-based firms,
- 30% of all procurement budget on mining goods may be offset against supplier development,
- Goods must be procured in line with a standardised product identification coding system being developed by the dti.,
- 10% of all procurement budget on services may be offset against supplier and enterprise development,
- 70% of all R&D budget to be on South African based entities.
Please note that the term “BEE Compliant company” means:
- A company with a ‘minimum’ Level 4 status as per the DTI B-BBEE Codes, and
- A ‘minimum’ of 25% plus 1 vote ownership by HDI.
For further discussions on this topic, contact Israel Noko on email@example.com.