Pivotal moment for South African mining

South Africa is currently redrafting its Mining Charter, hopefully bringing to an end a long period of disagreement and uncertainty. The original Charter was passed in 2002 as part of the government’s black empowerment strategy, to overcome the historic economic imbalance in South Africa between black and white citizens that was cemented under Apartheid. The Charter previously required a minimum 26% equity ownership by historically disadvantaged South Africans, but this will now be restricted to black South Africans. In addition, at least 5% of the 26% must be equally distributed among black entrepreneurs, employees through share ownership schemes and communities through trusts. Companies will also be judged on their provision of housing and other services in mining villages, which are some of the most underdeveloped in the country. The redrafted Charter should become law by end-March. The Mineral and Petroleum Resource and Development Act, which is expected to give the state automatic 20% stakes in new projects, is scheduled for completion three months later. The Chamber of Mines is particularly concerned about the stipulation that mining firms must maintain 26% ownership by black South Africans even when the original investors sell their stakes to investors that don’t qualify as empowerment

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Source: CTRM Center

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