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

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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

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• verview
• verview 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

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separation of powers

executive judiciary parliament

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structure of the legal system

.

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SOURCES OF LAW The Constitution Legislation Common law Customary law Primary Legislation Subordinate legislation

Provincial National Local

hierarchy of courts

.

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

regulatory framework

Precious Metals Act

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Precious Metals Regulations Mining Charter

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)

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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

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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
• jeweller’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:

National Commissioner

(in the case of gold only)

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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

• rderly 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)……”

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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

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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

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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

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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

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the mining charter, 2018

Less than ZAR 1 mill

• enterprises with a

turnover less than ZAR1-million

• are exempt from the

2018 Mining Charter in its entirety

ZAR 1 mill – 50mill

• of ZAR1-million

turnover to ZAR50- million

• are exempt from the

following elements:

• Socio economic

development

• Inclusive

Procurement, Supplier and Enterprise Development Element

• Employment

Element (in respect

• f businesses with

less than 10 employees)

ZAR 50 mill plus

• enterprises with a

turnover of more than ZAR50-million must comply with the 2018 Mining Charter in its entirety

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thresholds for precious metals jewelers and precious metals beneficiators

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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questions?

thank you