South Africa to Meet Mines on Disputed Black-Ownership Rules

  • Minister seeks two-day meeting over draft Mining Charter
  • Court process `doesn't preclude' legislating, minister says

South African Mineral Resources Minister Mosebenzi Zwane will hold a two-day meeting with mining-industry executives to debate a draft plan to compel mines to ensure that black people hold at least 26 percent of their shares at all times.

In the reviewed Mining Charter published for comment on Friday, his department stated that mine-right holders must ensure their empowerment credentials are “consistent with the amended 2016 Mining Charter,” which states that producers “must achieve a minimum target of 26 percent ownership per mining right to enable meaningful economic participation of black people.”

The department and the Chamber of Mines, which represents the largest producers in the country, including Anglo American Plc and Glencore Plc, have gone to court over their interpretation of a previous version of the charter, with the companies saying that they have still met the rules to hold licenses even after black investors sold their stakes. The department says companies should maintain shareholdings by non-whites above the threshold at all times.

“Whether or not the mining charter is before a court does not preclude us from legislating,” Zwane told reporters in Cape Town on Tuesday, without providing dates for the meeting. “We released the charter so as to engage in robust debate. That is how the final Mining Charter will come about -- as a result of the engagements we have with stakeholders.”

Apartheid Legacy

South Africa’s push for increased black ownership of the mining industry, which accounts for almost half of the country’s exports, is part of an effort to address the legacy of apartheid that locked the black majority out of key industries. The charter also sets targets for companies to boost the number of black people in management and improve training and benefits for communities near mines.

The 26 percent provision could have been higher, Zwane said.

“If we wanted to we could have made ownership 35 percent or 40 percent as the wealth of South Africa belongs equally to all.”

Anglo American, which is scaling back its operations in the country, called the decision to publish the plan “premature” without first seeking the input of industry. “The current draft review of the charter represents solely the view of the DMR and needs to be comprehensively reconsidered,” the company said in an e-mailed statement. DMR refers to the country’s Department of Mineral Resources.

Sibanye Gold Ltd., the biggest producer of the metal from South African mines, criticized the revised charter, saying some aspects of the legislation are “not acceptable” in their current form and that existing investors’ stakes will be continually diluted.

Mining companies have 30 days from April 15 to comment on the review.

The draft “will cause a tragic loss of jobs if implemented,” James Lorimer, a spokesman for the Democratic Alliance, the official opposition to the ruling African National Congress, said in an e-mailed statement.

“New mining investment is already almost non-existent; this will ensure that it disappears altogether,” he said. “South Africa needs more incisive policy that will aggressively tackle inequality and unemployment, unfortunately the current proposals of the revised Mining Charter fail to achieve this.”

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