1231 DEPARTMENT OF MINERAL RESOURCES

1232 MINING CHARTER

1233 Presentation lay out  Introduction  Mining Charter Assessment  The Amended Mining Charter the elements - the scorecard - reporting templates  Concluding remarks

1234 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 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.

1235 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 ;

1236 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

1237 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

1238 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.

1239 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.

12310 Assessment results cont... Human Resources Development: -Innate inhibitions exist against progress on skills development and; -Disconnect between plans submitted to DMR and actual implementation

12311 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;

12312 Amended Mining Charter 2010 cont... Nine elements Ownership - 26% of HDSA ownership by Offsetting permissible against value of beneficiation - only from 2012

12313 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 contribution of 0.5% of annual income by multinational suppliers of capital goods into social fund

12314 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%

12315 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

12316 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

12317 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 …

12318 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.

12319 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,

12320 Housing and Living Conditions cont... -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,

12321 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

12322 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.

12323 THANK YOU