July 15 (Bloomberg) -- South African Mineral Resources Minister Ngoako Ramatlhodi said mining companies should maintain 26 percent black ownership of their assets in the country or risk losing their operating licenses.
The nation, which has the world’s biggest reserves of platinum, chrome ore and manganese, enacted a Mining Charter in 2004, compelling operators to sell 26 percent of their local assets to black South Africans by the end of this year as a way to compensate for discrimination during apartheid rule, which ended in 1994. A number of investors that acquired the so-called empowerment stakes at discounts subsequently sold them, diluting the companies’ black shareholding.
Ramatlhodi said he didn’t accept the “once-empowered, always-empowered” argument put forward by the mining companies, which had committed to a minimum black shareholding.
“I don’t subscribe to that because it defeats the spirit of transformation,” he told reporters in Cape Town today. “There are people who are historically excluded and these people happen to be a majority. They should have a say in what happens to their minerals.”
While a government-commissioned study from mid-2008 found just 9 percent of the industry was black-owned, its findings were rejected by the Chamber of Mines, which represents all the country’s main mining companies, including Anglo American Plc and BHP Billiton Ltd. A new analysis is under way to reassess compliance with the charter.
“Ultimately we do have as our whip the withdrawal of licenses and we will use that if needs arise,” Ramatlhodi said. “We will do everything possible to avoid that eventuality, but definitely, if it’s unavoidable, that should happen and will happen.”
About 79 percent of South Africa’s population is black, 9 percent white, 9 percent of mixed race and 2 percent Indian or of Asian origin, according to the government statistics agency.
“Just to be clear, at any given time companies must comply with 26 percent black economic empowerment,” Deputy Mineral Resources Minister Godfrey Oliphant told reporters. “Whatever they sell and whatever they do, 26 percent must remain in the hands of indigenous people. It’s in the interest of companies to comply.”
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