SEC Probes Gold Fields on South African Black-Ownership DealKevin Crowley
Gold Fields Ltd. said the U.S. Securities Exchange Commission is investigating an ownership deal that helped the South African producer of the metal secure a mining license. The shares fell to the lowest in a month.
The SEC is probing the transaction associated with the grant of the mining permit for the South Deep operation near Westonaria, 55 kilometers (34 miles) southwest of Johannesburg, Gold Fields said today in a statement.
In 2010, Gold Fields agreed to issue 600,000 shares to a black-owned group and allowed it to buy 10 percent of South Deep. South African law requires mining companies to sell at least 26 percent of their local operations to black citizens, with transactions that benefit workers, communities near sites and trusts for the poor being favored. Last year, the company denied a news report by Johannesburg-based Carte Blanche that the deal benefited influential people who helped it win the license needed to continue operating the mine.
“Given the early stage of this investigation, it is not possible to estimate reliably what effect the outcome this investigation any regulatory findings and any related developments may have on the company,” Gold Fields said.
The stock dropped for a seventh day, losing as much as 2.4 percent to the lowest intraday level since Aug. 8 and trading 0.6 percent lower at 51.95 rand by 2:06 p.m. in Johannesburg. Before the announcement, the shares had gained as much as 1.2 percent.
Gold Fields’ primary listing is on the Johannesburg Stock Exchange. U.S investors can trade the stock through American depositary receipts.