In this blog post, we’ll explain why it is relatively straightforward to qualify for the Mining Charter, provided that key compliance areas like ownership, LED projects, and housing and living conditions (HLC) are in order.

Overview of the Permutations of Mining Charter

The table above outlines various permutations for meeting a Level 5 compliance rating, with the total score fixed at 51%. The key areas assessed are Employment Equity (EE), Inclusive Procurement, and Human Resource Development (HRD). Each permutation adjusts these components while assuming that ownership, LED projects, and HLC are compliant.

A key underlying assumption in this discussion of complyin with the mining charter is that the mine has already met the compliance requirements for ownership, local economic development projects, and housing and living conditions. These areas are foundational to Mining Charter compliance, and once they are in place, the remaining targets, such as employment equity, procurement, and human resource development, become much more manageable. Essentially, qualifying for the Mining Charter hinges on ensuring that these core elements are in order, allowing the mine to focus on achieving the remaining scorecard targets with relative ease.

Why Qualifying Isn’t Hard

1. Human Resource Development (HRD):
   The target for HRD is typically 100% of the designated percentage of the company’s salaries and wages. For example, this would mean 5% of the total salaries and wages budget. In our table, the HRD score in each permutation stands at 20%, which amounts to 67% of the HRD target (67% * 5% = 3.35% of total salaries and wages). As you can see, the requirements for HRD are not overly demanding, especially considering the resources mines typically allocate to training and development.
2. Inclusive Procurement:
   Historically, procurement targets have been one of the more complex aspects of compliance, but recent developments have simplified this process. With the new codes being thrown out, mines now have more flexibility in meeting these targets. This means that even at 40% of the target (as seen in some permutations above), a mine can still easily comply and achieve a Level 5 rating.
3. Employment Equity (EE):
   Today, most mining companies already comply with Employment Equity requirements, which makes this a less challenging aspect of the scorecard. Mines typically already have systems in place to ensure fair representation, which means that achieving 50% of the EE target, for instance, is quite achievable.

The Bigger Picture

Ultimately, what this means is that achieving compliance with the Mining Charter is not an insurmountable task. While certain elements, such as HRD, procurement, and EE, need attention, the reality is that many mines are already well-positioned to meet these targets with minimal effort. Assuming the core areas of ownership, LED projects, and HLC are sorted, compliance essentially becomes a matter of fine-tuning, rather than a significant overhaul of current operations.

Permutation	Employment Equity	Inclusive Procurement	Human Resource Development	Total Score
Permutation 1	11% (37% of 30%)	20% (50% of 40%)	20% (67% of 30%)	51%
Permutation 2	12% (40% of 30%)	19% (48% of 40%)	20% (67% of 30%)	51%
Permutation 3	13% (43% of 30%)	18% (45% of 40%)	20% (67% of 30%)	51%
Permutation 4	14% (47% of 30%)	17% (43% of 40%)	20% (67% of 30%)	51%
Permutation 5	15% (50% of 30%)	16% (40% of 40%)	20% (67% of 30%)	51%
Weighted Target	30% (100%)	40% (100%)	30% (100%)	100%

Social and Labour Plan Requirements for Small-Scale Mining in South Africa

In South Africa, the mining industry is governed by stringent regulatory frameworks designed to ensure not only sustainable mineral extraction but also socio-economic upliftment for the communities affected by mining activities. One such regulatory instrument is the Social and Labour Plan (SLP), mandated under the Mineral and Petroleum Resources Development Act (MPRDA). However, for small-scale miners, the requirements for SLPs differ from those applied to larger, more established mining operations.

What is a Social and Labour Plan?

An SLP is a comprehensive document that mines must submit to the Department of Mineral Resources and Energy (DMRE) as part of their mining rights application. The purpose of the SLP is to outline how the mine intends to contribute to local economic development, uplift communities, and improve the living standards of their employees through skills development, employment, and other socio-economic interventions.

Do Small-Scale Mines Require a Comprehensive SLP?

Yes, but the requirements for small-scale mines are less comprehensive than for larger mining operations. According to South African mining legislation, while small-scale miners must still submit an SLP, the scope and depth of the plan are more tailored to their size and capacity.

This flexibility recognises that small-scale mines often have fewer resources and a smaller footprint than larger mining houses. For instance, a small-scale diamond mine with fewer than 25 workers would still be required to submit an SLP but would likely have less extensive commitments. The SLP would still need to address:

• Skills development for employees;
• Local community economic development initiatives;
• Plans for employee housing and living conditions;
• Employment equity and human resources development;
• Stakeholder engagement and participation in mining-related decisions.

Understanding Proportional Commitments

The regulatory framework provides a degree of proportionality, meaning that small-scale miners are not held to the same exhaustive standards as large-scale operations. However, this does not imply that small-scale mines are exempt from SLP obligations. Instead, their SLPs are typically less intricate, aligning with the scale of their operations.

For small-scale mines, the DMRE often encourages the adoption of a more localised and immediate approach to social development. These miners are expected to work closely with local municipalities, traditional authorities, and community groups to craft development projects that are realistic and impactful within the community’s context.

The Value of Local Community Engagement

Engaging the local community is essential, regardless of the mine’s size. Even though small-scale mines are allowed some flexibility, the core principle remains: communities affected by mining must see tangible benefits. This could involve setting up small infrastructure projects, offering local employment opportunities, or supporting local businesses that cater to the mining sector.

Small-scale miners who demonstrate an active involvement in local development through these plans not only meet legal requirements but also foster goodwill, which can be invaluable in maintaining smooth operations and avoiding conflict with the community.

Conclusion

While small-scale mining operations are not exempt from the Social and Labour Plan obligations, their SLP requirements are simplified to match the scale of their operations. Small-scale miners must still address the key elements of social upliftment, local economic development, and employee welfare but on a scale that is appropriate to their capacity. The focus remains on proportional contributions that have a meaningful impact on the communities in which they operate. By engaging with local stakeholders and implementing achievable development goals, small-scale miners can fulfil their obligations under South African law while contributing positively to community development.

By understanding the regulatory environment and maintaining good relationships with local communities, small-scale miners can operate successfully while also playing their part in South Africa’s broader development goals.