the applicability of the mining charter, 2018 to the precious - PowerPoint PPT Presentation

1 1 Jewellery Council of South Africa the Precious Metals Act and the applicability of the mining charter, 2018 to the precious metals industry Carlyn Frittelli Davies 26 March 2019

2 overview • overview of the separation of powers, structure of the legal system and hierarchy of the courts • regulatory framework • key provisions in the Precious Metals Act, 2005 • the Mining Charter, 2018 • discussion

3 separation of powers parliament executive judiciary

4 structure of the legal system . SOURCES OF LAW The Customary Common Legislation law Constitution law Primary Subordinate Legislation legislation Local National Provincial

5 hierarchy of courts . Internal remedies and Constitutional Court alternative dispute resolution Supreme Court of Appeal Special courts e.g equality High Courts court,, labour court Small claims court

6 regulatory framework Precious Metals Act Precious Mining Metals Charter Regulations

7 Precious Metals Act • in effect since July 2007 • regulates precious metals • the possession • trading • manufacture • licences and permits are issued by the South African Diamond & Precious Metals Regulator which administers the Precious Metals Act and the Diamonds Act (SADPMR)

8 Precious Metals Act continued • section 2 - the objects of the Regulator are to • ensure that the precious metal resources are exploited and developed in the best interest of the people of South Africa • promote equitable access to, and local beneficiation of South Africa’s precious metals • promote the sound development of precious metal enterprises in South Africa • advance the objectives of the broad-based socio- economic empowerment as prescribed

9 Precious Metals Act continued • section 4 and 5: no person may posses, dispose of unwrought precious metals/ semi-fabricated precious metals unless • refining licence • authorised dealer • producer who has won or recovered the unwrought precious metal; • beneficiation licence • j eweller’s permit (acquire and possess precious metal, but in semi- fabricated form and not in unwrought form) • certificate from the Regulator • before the issue of a refining licence or a certificate to dispose of unwrought precious metals, the Regulator must consult with: (in the case of gold only) National Commissioner

10 Precious Metals Act continued Section 6 “in considering an application for any licence, permit or certificate the Regulator - (a) must have regard to the promotion of equitable access to and orderly local beneficiation of precious metal; (b) must have regard to the requirements of the broad-based socio-economic empowerment Charter developed in terms of section 100 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002 )……”

11 Precious Metals Act continued • comments in relation to section 6 • “must have regard to” properly construed means: • the Regulator must apply the Mining Charter to the extent that it applies • case by case analysis

12 Precious Metals Act continued • internal appeal process • section 7(2), 8(2), 9(2), 10(2) any person who is refused a licence or permit may, within 30 days after having been notified by the Regulator of the refusal, appeal in the prescribed manner to the Minister • internal remedy must be exhausted before approaching a court to review an administrative decision in terms of the Promotion of Administrative Justice Act

13 Precious Metals Act continued • non-compliance • penalties for transgression of any provisions of the Precious Metals Act, especially offences relating to possession, acquisition or disposal of unwrought precious metals carry are harsh • fines up to R1 million and imprisonment of up to 20 years or to both fine or imprisonment

14 the mining charter, 2018 • while the Precious Metals Act and the Diamonds Act currently require the Regulator to have regard to the requirements of the mining charter, the Mining Charter, 2018 provides for the specific application of certain of the elements of the Mining Charter, 2018 with variations and exemptions depending on the size of the licence holder

15 the mining charter, 2018 thresholds for precious metals jewelers and precious metals beneficiators ZAR 1 mill – 50mill ZAR 50 mill plus Less than ZAR 1 mill • enterprises with a • of ZAR1-million • enterprises with a turnover less than turnover to ZAR50- turnover of more ZAR1-million million than ZAR50-million must comply with the • are exempt from the • are exempt from the 2018 Mining Charter 2018 Mining Charter following elements: in its entirety in its entirety • Socio economic development • Inclusive Procurement, Supplier and Enterprise Development Element • Employment Element (in respect of businesses with less than 10 employees)

16 discussion • the Mining Charter places obligations on entities which have an annual turnover of more than ZAR 1 million, with certain exemptions for entities between ZAR 1 million – 50 million • the Mining Charter does not specifically contemplate natural persons in this industry but requires compliance nonetheless if turnover is in excess of ZAR 1 million • regulation 3(a) of the Precious Metals Regulations contemplates an application for a licence from a natural person • before refusing to accept applications, the Regulator must at least accept the applications and consider the applicable thresholds for compliance because the Mining Charter does not obligate all entities alike

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