eNCA | Markets fall after new mining charter is published
PRETORIA – A minimum of 30 percent of South African mining companies has to be in the hands of black partners.
Mineral Resources Minister Mosebenzi Zwane made the announcement on Thursday, at the launch of the new Mining Charter.
The minimum threshold of black ownership had been raised from 26 percent.
The department is yet to decide whether firms had to retain that structure permanently.
In addition, mining prospecting rights need to have a minimum of 50 percent plus one, while companies will be required to give eight percent of their shares to workers.
However, the Chamber of Mines condemned the announcement, repeating previous complaints over a lack of consultation.
The Mining Charter was introduced in 2002 to increase black ownership of the mining industry, which accounted for about seven percent of South Africa’s economic output.
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The industry body snubbed a meeting with government, scheduled just an hour before Zwane’s press conference on Thursday, which it described as “highly suspicious.”
The Chamber took government to court over the interpretation of ownership rules, a case that was yet to be heard.
Zwane said companies had 12 months to comply with the 30 percent target.
The government said companies must stick to black ownership targets even if black shareholders sell their stakes.
Uncertainty about government policy remained, however, as Zwane said “we have not dealt with that” issue.
It comes as the minister was under the spotlight after being implicated in the so-called #GuptaLeaks saga.
South Africa is the world’s top platinum producer, and the Chamber of Mines warned that onerous rules about ownership and participation will hurt investment.
The markets reacted to the announcement with shock.
The rand was down by two percent on the news, while mining firms lost around R30-billion.
By 13:00 CAT on Thursday, the resources index had fallen by 1.75 percent.
Sibanye was down by around 6.8 percent, Kumba Iron Ore was down by 6.4 percent and Assore by 5.85 percent.
Reuters