Charter changes to lift SA’s score
If SA’s efforts to deliver an improved Mining Charter in coming weeks are successful, Business Monitor International, a unit of FitchGroup, will upgrade the country’s low score on the regulatory sub-Saharan mining risk/reward index.
If SA’s efforts to deliver an improved Mining Charter in coming weeks are successful, Business Monitor International (BMI), a unit of FitchGroup, will upgrade the country’s low score on the regulatory sub-Saharan mining risk/reward index.
Since February, SA’s mining industry has taken up the offer from President Cyril Ramaphosa to postpone a court application to review and set aside an unpopular and controversial third version of the Mining Charter in favour of talks with newly appointed Mineral Resources Minister Gwede Mantashe, an industry veteran.
Mantashe has indicated that work on a new version of the third charter is 80% complete and a new document to guide the industry through racial transformation will be gazetted in May, while he is pushing the National Council of Provinces to speed up work on amendments to the Mineral and Petroleum Resources Development Act.
SA is not the only country in the region experiencing regulatory and policy upheaval. The Democratic Republic of Congo and Tanzania are also going through much the same.
“Sub-Saharan Africa’s mining sector will remain the riskiest in the world over the coming quarters as regulatory uncertainty rises in various markets across the region,” BMI commented in a note. SA, which scores 50 on the overall risk/reward index, is placed third among 16 African mining countries, which have an average score of 39. Globally, SA is placed 34th, behind Botswana (23) and Ghana (24).
In measuring SA’s regulatory environment, the country fell to 40.2 against an average of 37.5. This puts SA on a par with Angola and Mauritania but less than half of Botswana’s score of 96.7.
“We view the recent change of government in SA as an upside risk to the country’s poor regulatory score as the new government and local mining industry representatives begin negotiations over the final content of the new mining charter,” BMI said.
“If negotiations do lead to an agreement that is acceptable to all parties in the coming months, we will upgrade the country’s regulatory score,” it said.
Participants in the talks have committed to confidentiality agreements, so details are scarce about progress.
Trade union Solidarity’s general secretary, Gideon du Plessis, said on Tuesday, after the latest round of talks, that good progress was being made and a lot of the damaging clauses in the now-suspended third charter were under review and were being changed.
SA IS NOT THE ONLY SUB-SAHARAN COUNTRY EXPERIENCING POLICY UPHEAVAL