NewsSouthern AfricaSouth Africa puts new mining charter on hold: Chamber of Mines

Sun,23Jul2017

Posted on Friday, 14 July 2017 15:46

South Africa puts new mining charter on hold: Chamber of Mines

By Reuters

 In this Feb. 13, 2016 file photo, search and rescue team members at the Lily Gold Mine near Barberton, South Africa.Photo: AP/SIPASouth Africa has suspended implementation of a new mining law, which includes raising the level of shares blacks should own in mining firms, pending a court ruling, the Chamber of Mines industry body said on Friday.

 

Mining shares fell to more than one-year lows when Mines Minister Mosebenzi Zwane released the revised mining charter last month, giving resource firms 12 months to meet a new 30% minimum for black ownership, up from 26%.

The Chamber of Mines said the minister had given a written undertaking that the new code would not be implemented until a court ruled on a case against the move brought by the chamber.

It said the court would likely hear the so-called interdict application in September.

Vast and systemic damage

The charter aims to widen ownership in South Africa's economy, which has yet to shake off the legacy of white rule more than two decades after the end of apartheid.

The Chamber of Mines applied to the high court to prevent implementation of the charter, saying it risked "vast and systemic damage" to the industry.

The industry body said there had been insufficient consultation drawing it up.

Ratings agency Moody's said the new rules seeking to accelerate black ownership in South Africa's mining industry would deter investment, raise costs and diminish cashflow generation.

The mining minister has defended the new code, calling it a "win-win" for all.

Johannesburg's Mining Index extended gains to be up 1% following the news of the suspension.

 

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