1231 DEPARTMENT OF MINERAL RESOURCES 1232 MINING CHARTER.

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DEPARTMENT OF DEPARTMENT OF MINERAL RESOURCESMINERAL RESOURCES

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MINING CHARTER

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Presentation lay out

Introduction Mining Charter 2002• - Assessment

The Amended Mining Charter 2010• - the elements• - the scorecard• - reporting templates Concluding remarks

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Introduction

• Section 100 (2) of the MPRDA makes provision for the Minister to develop a broad- based socio-economic empowerment Charter for the mining industry;

• As a result, mining sector stakeholders signed the Mining Charter in October 2002.

• Stakeholders agreed to review the Mining Charter after five years.

• In 2008, the DMR appointed an independent service provider to assess progress made on the Mining Charter against specific targets.

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Mining Charter 2002

The assessment yielded the following results;

• Beneficiation:

• Levels of beneficiation not aligned with

levels provided by s 26 and Charter.

• Employment Equity:

• Only 37% of mining companies have

developed Employment Equity plans;

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Assessment results cont...

• 26% of companies achieved a threshold of 40%

of HDSA participation at management level,

• Mine Community and Rural Development:

- Only 49% of companies participated in the

formulation of IDP’s;

- Social Labour Plans not implemented as per

application

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Assessment results cont...

• Housing and Living conditions,

- 26% of companies have provided housing

for their employees and a mere 29 %

improved existing standards of housing.

• Procurement:

- 89% of mining companies have not given

companies preferred supplier status

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Procurement cont...

• 80% have not committed to the progression

of procurement from HDSA companies over

3-5 year timeframe;

• Reported levels of procurement from HDSA

companies average 37% of companies.

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Assessment results cont...

• Ownership and Joint ventures

• BEE ownership aggregate at 9%

• Some funding models packaged such that

they coincide with or go beyond life of mine.

• BEE partners to pay off their debts through

dividends.

• No value in their hands at the end of debt

payment.

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Assessment results cont...

• Human Resources Development:

- Innate inhibitions exist against progress on

skills development and;

- Disconnect between plans submitted to

DMR and actual implementation

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Amended Mining Charter 2010

The review of the Mining Charter was aimed

at strengthening and sharpening its

effectiveness in driving transformation and

competitiveness in the mining sector.

The Amended Charter seeks to achieve that

through implementation of the following

elements;

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Amended Mining Charter 2010 cont...

Nine elements

• Ownership

- 26% of HDSA ownership by 2014

- Offsetting permissible against value of

beneficiation - only from 2012

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Amended Mining Charter 2010 cont...

• Procurement and Enterprise Development

- procure from BEE entities:

* minimum 40% capital goods by 2014

* 70% service by 2014

* 50% consumer goods by 2014

- contribution of 0.5% of annual income by

multinational suppliers of capital goods into

social fund

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Amended Mining Charter 2010 cont...

• Beneficiation

- Companies to facilitate local beneficiation

by adhering to s26 of MPRDA and

Beneficiation Strategy

- Offset value of level of beneficiation against

portion of HDSA ownership but not

exceeding 11%

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Amended Mining Charter 2010 cont...

• Employment Equity

- Companies to achieve minimum of 40% HDSA

demographic representation by 2014 at:

* executive management (Board) level

* senior management (Exco) level

* core and critical skills

* middle management level

* junior management level

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Employment Equity cont...

- Companies to fast track existing talent pools to

ensure high level operational exposure in terms of

career path programmes.

• Human Resource Development

- Industry to invest % of annual payroll in essential

skills development reflective of demographics as

follows:

* 3% by 2010

* 3.5% by 2011

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Human Resources Development cont...

* 4% by 2012

* 4.5% by 2013

* 5% by 2014

• Mine Community Development

- Stakeholders to adhere to international best

practices and guidelines,

- Invest in community consultative and

collaborative process…

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Mine Community Development cont...

…prior to implementation of mining projects,

- Conduct assessment to determine

developmental needs in collaboration with

mine community and,

- Identify projects for contribution towards

community development in line with IDPs.

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Amended Mining Charter 2010 cont...

• Housing and Living Conditions

- Companies to implement measures to

improve standards of housing and living

conditions for mineworkers as follows;

* convert/upgrade hostels into family units by

2014,

* occupancy rate of one person per room by

2014,

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Housing and Living Conditionscont...

- Facilitate home ownership by miners in

consultation with labour by 2014

• Sustainable Development and Growth in

Mining Industry

- Mining companies to implement elements of

sustainable development commitments in

Stakeholders’ Declaration,

- Improve on environmental management ,

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Sustainable Development cont...

- Improve on industry’s health and safety

performance,

- Mining companies are required to utilise S.A

based facilities for analysis of samples across

mining value chain.

• Reporting(Monitoring and Evaluation)

- S47 MPRDA, suspension/ cancellation of rights

- S99 MPRDA, penalties

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Concluding remarks

- Development of Monitoring and Evaluation

module to ensure higher levels of

compliance with Charter

- Companies must report levels of compliance

annually

- Review of MPRDA to beef up penalty

provisions that may be imposed on

companies for non-compliance.

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THANK YOU