South Africa just hiked black ownership rules, miners getting crushed

  • South Africa just hiked black ownership rules, miners getting crushed

South Africa just hiked black ownership rules, miners getting crushed

The Mining Charter was introduced in 2002 to increase black ownership of the mining industry, which accounts for about 7 percent of South Africa's economic output.

A new mining right must have 30-percent black persons' shareholding from the previous 26 percent, with the 30 percent shareholding to be apportioned between employees, communities and entrepreneurs in a specific manner, said Zwane.

The government has said in the past that companies must stick to ownership targets even if black shareholders sell their stakes but Zwane said it had not yet decided whether mining firms must maintain the threshold permanently.

The Chamber of Mines will host a media briefing around lunchtime on Thursday to discuss the way forward following the release of the new Charter.

The country's mining minister Mosebenzi Zwane said the long-awaited regulations were a "key instrument for radical change, created to address numerous inequalities in the mining and minerals sector prior to 2002".

Cape Town - The National Union of Mineworkers (NUM) on Friday said while it welcomed the reviewed Mining Charter gazetted this week, the goverment-set targets for black ownership of the country's mineral wealth could have gone further.

South Africa is the world's biggest platinum producer and Africa's largest gold and coal producer.

The Chamber of Mines said it would also take this issue back to courts. It complained of being excluded from discussions with the government before the announcement, and it said it would launch a court challenge against the new code.

Most mining companies reached the 26% level under previous versions of the rule but numerous black investors have since sold out; the government says the new rule will apply regardless of whether the companies sold shares or assets to black investors that later divested. "We also listened to the sector who asked for policy certainty, but also wanted clarity on historic deals".

In a statement, the union welcomed the introduction of a 30 percent black-ownership target for all mines.

The chamber said it will not be co-opted into a flawed process.

The Chamber of Mines said it would challenge the new rules in court, arguing that there had been insufficient consultation in drawing up the charter, which is created to widen the ownership of the South African economy.