Aug. 28 (Bloomberg) -- South Africa, holder of the largest known reserves of platinum and chrome, said proposed changes to its mining laws are designed to attract investors as it seeks to ease concerns that the revisions will tighten state control.
“The Amendment Bill is not intended to strangulate investment opportunities,” Minister of Mineral Resources Susan Shabangu said today at a conference in Perth, Australia. “Our amendment of the act is for the sole purpose of attracting investment for the country.”
Companies criticized the Mineral and Petroleum Resources Development Amendment Bill when it was presented to parliament in June, saying it would enable ministers to set the prices of some minerals and limit shipments abroad to secure domestic supplies. Retaining investor confidence is crucial for a country that relies on mining for more than half its exports.
Other proposed changes would allow the country to force mine operators to process some output locally and give the state stakes in new oil and gas projects. South Africa would be able to appoint two directors at companies with new energy projects and businesses would need the minister’s permission to transfer controlling stakes in unlisted mining companies. Proposals also include abolishing the petroleum regulator.
BHP Billiton Ltd., the world’s biggest mining company, said the implementation of the bill in its current form would have a “material impact” on its local operations, according to the transcript of an interview with its local Chairman Xolani Mkhwanazi in Johannesburg’s Financial Mail.
Anglo American Plc, which mines coal, iron ore and platinum in South Africa, also urged the government to stop changing the rules for mining, Business Day reported, citing Chief Executive Officer Mark Cutifani.
The bill will ease the process of applying for authorization to mine in South Africa, Shabangu said at the conference today, according to an e-mailed copy of her speech.
The Public Investment Corporation, the biggest South African investor, was right to vote against the executive pay of the nation’s largest gold and platinum mining companies in April and May this year, Shabangu said.
PIC, which manages public workers’ pensions, rejected pay plans at Anglo American Platinum Ltd., Gold Fields Ltd., AngloGold Ashanti., Sibanye Gold Ltd. and Royal Bafokeng Platinum Ltd. because the companies failed to track performance and as the remuneration was high relative to peers, the state-owned investor said in an Aug. 19 statement.
CEOs at some mining companies are being paid about 40 times the average salary of staff, Shabangu said. “This behavior perpetuates inequality and threatens the stability needed for long-term development of the industry.”
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