State delays mine royalty decision

South Africa’s mine ministry has yet to ask a court whether operators may claim to meet black-ownership rules even after shareholders have sold their stake in assets, missing an April deadline to obtain finality on the matter.

Mineral Resources Minister Ngoako Ramatlhodi said in March the ministry wants a court judgment by April on the requirements of the 2004 Mining Charter, which compelled companies to sell 26 percent of their assets to black South Africans by the end of 2014 as a way to narrow economic disparities created by apartheid rule.

Some investors that acquired the so-called empowerment stakes at attractive terms and subsequently sold them, diluted the producers’ black shareholding.

The ministry was still finalising its application even though the matter remained “urgent,” Mahlodi Muofhe, a spokesman for Ramatlhodi, said yesterday. “We don’t want to waste the court’s time by fi ling papers which are not well-cooked.”

Mining companies in South Africa risk losing permits for non-compliance to the charter, which also includes requirements on housing provision and training. Some political parties, such as the Economic Freedom Fighters, want mines to be nationalised to speed up economic reform in a country that has the world’s biggest reserves of platinum and manganese.

“Key to the implementation of the charter is the understanding” of its provisions, Muofhe said. “The minister wishes to implement the Mining Charter as soon as possible; it is regrettable this misunderstanding of the interpretation is basically keeping things on hold.” – Bloomberg