This document summarizes a presentation about minerals changing hands in South Africa and the requirements of Broad-Based Black Economic Empowerment (B-BBEE). It discusses how Section 11 of the Mineral and Petroleum Resources Development Act regulates the transfer of mineral rights, with criteria for consent and exceptions. It also examines contractorship agreements pending mineral rights transfers and case studies on non-compliance. The importance of complying with both the legislation and B-BBEE charters is emphasized, as failure to do so can result in consequences for businesses.

1. CHANGING HANDS
Presented by Shirley Fodor
Director

2. Overview
 BEE
 Section 11 of the MPRDA –
minerals changing hands
 Contractorship Arrangements
2

3. Broad-Based Black Economic Empowerment
3

4. Broad-Based Black Economic Empowerment
 Objects of the MPRDA
 Private ownership of minerals abolished
 Equitable access to minerals
 Expanding opportunities for the historically disadvantaged
 Interested and affected persons
 Non-compliance
4

5. Broad-Based Black Economic Empowerment –
The Charters
 2004 Charter  2010 Charter
 HR development  Meaningful economic
participation/ownership
 Employment equity
 Procurement and
 Community development enterprise development
 Housing and living  Beneficiation
conditions
 Employment equity
 Procurement
 HR development
 Ownership
 Sustainable development
 Beneficiation
 Mining community
 Housing and living
conditions
 Non-Compliance
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6. Lock-Ins
 Purpose
 Duration
 DMR response
 Double-edged sword
 Alternatives?
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7. Minerals Changing Hands
 Section 11 of the MPRDA
 Applicability to minerals and petroleum
 What is the prohibition and the mischief sought to be
prevented?
 Identifying control and changes of control
 Mogale Alloys v Nuco Chrome Bophuthatswana (Pty) Ltd
 Criteria for consent
 Mining rights
 Prospecting rights
 Exceptions to the rule
 Listed companies
 Encumbrances
 Registration requirements
 Proposed amendments to section 11
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8. Section 11 – Case Study
 Contents of right
 Contents of agreement
 Pre-implementation
 Post-fact attempt at
correcting
 Consequences
8

9. Contractorship Arrangements Pending Transfer
 Section 102 of the MPRDA
 Contractorships v fronting
 Content of agreement
 Consequences
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10. Case Study – Contractorship Agreements
 Sale of business
 Contractorship agreement
 Marketing agreement
 Effect of agreement
 Consequences
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11. Conclusions
 Requirements of the legislation
 Requirements of the Charters
 Section 11 and contractorship agreements – a fine line
 The importance of compliance
 The consequences for failing to comply
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12. THANK YOU
Shirley Fodor
8 November 2012
Nothing in this presentation should be construed as formal
legal advice from any lawyer or this firm. Readers are
advised to consult professional legal advisors for guidance
on legislation which may affect their businesses.
© 2012 Werksmans Incorporated trading as Werksmans
Attorneys. All rights reserved.