South Africa plans to add new rules requiring that all local mines be 20% black-owned, and not 26% as it currently is
The plan is available for all local mines, regardless of whether they have sold shares or assets to black investors that further divested.
The raise in the minimum black-ownership level from the present 26% is intended by the Department of Mineral Resources, and aims to make sure that more proceeds from the country’s natural resources flow to the black majority. This statement was released by the Mining Minister, Mosebenzi Zwane in Pretoria, the capital.
Moreover, the charter will further require companies to pay 1% of the total annual revenue to communities and new prospecting rights will require black control.
Most of the mining companies reached the 26% level; however, many of the black investors have since sold out. The Chamber of Mines has said that it is willing to fight the government in court on the issue of getting credit from previous deals, which it is said to kill investment in the industry.
Impala Platinum Holdings Ltd,. South32 Ltd., Glencore Plc, and Kumba Iron Ore Ltd., which is majority owned by Anglo, would have to sell the bigger stakes if the new charter fails to give credit for previous deals. The country’s two biggest miners AngloGold Ashanti and Sibanye Gold may also be affected by the new rules.
Kumba and AngloGold both had a bad period and fell 5% by 11:16 a.m. In Johannesburg, while Sibanye traded 6.5% lower.
“We have listened to miners who have not seen real economic benefit; people who don’t see benefit of transformation structures,” he said.