South Africa Won’t Impose Ore Processing on Mines, Shabangu Says

South African Mineral Resources Minister Susan Shabangu reassured mining companies that planned legislative changes aren’t aimed at forcing them to process part of their output within the country.

Legislators are processing amendments to the 2002 Mineral and Petroleum Resources Development Act, which seeks to ensure South Africans get more benefit from the nation’s mineral wealth. Proposals include giving the minister the right “to designate any mineral, mineral products or form of petroleum for local beneficiation.

Anglo American Plc (AAL) and other companies complained that the proposals would hurt their business and discourage investment. The Chamber of Mines, the main industry body, expressed concern that the state will force companies to sell part of their output at below market prices.

‘‘No mining company is either required to beneficiate or is forced to subsidize the manufacturing industry,’’ Shabangu said in an address to the Investing in African Mining Indaba conference in Cape Town today. The government is confident the law ‘‘provides a predictable, stable and globally competitive mining legislation that promotes investment, inclusive growth, development and transformation.’’

South Africa is the continent’s largest coal and gold producer and the world’s biggest supplier of platinum and chrome. With elections due this year, the government is pressing the mining industry to do more to help reduce a 24.7 percent unemployment rate.

Industry Contraction

Companies including BHP Billiton Ltd. and Glencore Xstrata Plc have assets in South Africa.

The local mining industry shrank by an average of 1 percent a year, adjusted for inflation, during the 2001 to 2008 global boom in commodities, compared with the average 5 percent growth of the top 20 mining economies, according to data compiled by the chamber, which blames a lack of clear policy, labor unrest and inadequate transportation and power infrastructure.

Shabangu said she was confident the new laws would be passed before the current Parliament adjourns ahead of elections that must be held prior to July.

The legislation will make it easier for mining companies to do business, streamline the process of securing prospecting and mining licenses and balance business needs with national development imperatives, she said.

South Africa plans to move ahead ‘‘decisively” with exploration of shale gas, with final regulations for the industry due to be released soon, Shabangu said.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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