Re­sources hit in the wake of re­vised min­ing char­ter

Weekend Argus (Saturday Edition) - - FRONT PAGE -

RE­SOURCES com­pa­nies weak­ened ahead of the long week­end af­ter the min­i­mum thresh­old for black own­er­ship of min­ing firms was raised to 30%, drag­ging an in­dex of the stocks to a 13-month low.

Min­eral Re­sources Min­is­ter Mosebenzi Zwane re­leased the de­tails of the much- con­tested re­vised min­ing char­ter on Thurs­day, rais­ing the thresh­old from 26%.

South Africa’s min­ing in­dus­try said it would chal­lenge the new char­ter in court, ar­gu­ing that it had not been duly con­sulted and it is los­ing in­vest­ment as a re­sult.

Cham­ber of Mines pres­i­dent Mx­olisi Mgojo said the in­dus­try was con­cerned about the reviewed char­ter, say­ing the new laws were de­signed in a way that had the po­ten­tial to crip­ple the in­dus­try by driv­ing in­vest­ment away.

“There is no cap­i­tal as we speak. Peo­ple are try­ing to raise cap­i­tal and cap­i­tal is get­ting ex­pen­sive,” Mgojo said.

“Un­for­tu­nately, the sit­u­a­tion we find our­selves in is that be­cause of this un­cer­tainty, and be­cause of the en­vi­ron­ment be­com­ing more dif­fi­cult to op­er­ate in, cap­i­tal is not go­ing to come.

“Mines are not go­ing to be de­vel­oped, and jobs are go­ing to be lost.”

The char­ter sets new black own­er­ship tar­gets for the in­dus­try, which in­clude new min­ing rights, hold­ers hav­ing 30% black own­er­ship to be shared among em­ploy­ees, com­mu­ni­ties and black en­trepreneurs. Min­ing rights hold­ers who have com­plied with the pre­vi­ous target of 26% have to “top up” within 12 months.

Those ap­ply­ing for prospect­ing rights would be re­quired to have a “min­i­mum of 50% plus one black per­son share­hold­ing”. These share­hold­ers must have vot­ing rights.

Mgojo said he was un­sure why the con­sul­ta­tion process was aban­doned, adding that the re­la­tion­ship be­tween the cham­ber and Zwane was strained.

“All I can say is that we are very sad­dened by the fact that a process that in the past has proved it­self to have worked … in this in­stance did not hap­pen,” he said.

“We hope sense will pre­vail. We will try and rea­son with the min­is­ter that the right process has to be taken…”

By close of busi­ness on Thurs­day, di­ver­si­fied min­ing com­pany Sibanye Gold had dropped 3.52% to R16.15, An­gloGold Ashanti de­clined 6.08% to R138.31 and An­glo Amer­i­can Plat­inum re­treated 7.18% to R281.31. – ANA & REUTERS

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