The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.
(Bloomberg) -- South Africa plans to introduce rules requiring all local mines be 30 percent black-owned, regardless of whether they have previously sold shares or assets to black investors that later divested.
The Department of Mineral Resources intends raise the minimum black-ownership level from the current 26 percent to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane told reporters on Thursday in Pretoria, the capital. The charter will also require companies to pay 1 percent of annual revenue to communities and new prospecting rights will require black control, Zwane said.
A holder who claims a historical transaction that achieved 26 percent prior to the new Mining Charter, which Zwane presented on Thursday, “must top up to 30 percent within 12 months,” regardless of whether the earlier black shareholders still hold their position, according to a statement handed to reporters.
Most mining companies reached the 26 percent level under previous versions of the charter but many of the black investors have since sold out. The Chamber of Mines, which represents mining companies, has said it’s willing to fight the government in court over the issue of getting credit from earlier deals, which it says would kill investment in the industry.
Glencore Plc, Impala Platinum Holdings Ltd., South32 Ltd. and Kumba Iron Ore Ltd., which is majority owned by Anglo, would need to sell the biggest stakes if the new charter fails to give credit for previous deals, Avior Capital Markets (Pty) Ltd. said June 1. AngloGold Ashanti Ltd. and Sibanye Gold Ltd., the country’s two biggest gold miners, may also be affected by the new rules.
AngloGold and Kumba both fell 5 percent by 11:16 a.m. in Johannesburg, while Sibanye traded 6.5 percent lower.
“We have listened to miners who have not seen real economic benefit; people who don’t see benefit of transformation structures,” he said.
To contact the reporters on this story: Paul Burkhardt in Johannesburg at email@example.com, Kevin Crowley in Johannesburg at firstname.lastname@example.org.
To contact the editors responsible for this story: Lynn Thomasson at email@example.com, Liezel Hill, Andre Janse van Vuuren
©2017 Bloomberg L.P.