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Mining companies operating in South Africa, including Anglo American (LON:AAL) and Sibanye Gold (JSE:SGL) (NYSE:SBGL), may soon have to increase their black-owned stakes to 30%, from a previous 26%, but the government is promising to deliver “policy certainty” in return.
Newly appointed Minister of Mineral Resources Gwede Mantashe said the key to regain investors and miners confidence in the South Africa’s mining sector was to finalize revised plans for black ownership in the industry by the end of May, Xinhua reports.
Questioned revisions to the Mining Chart include increasing the minimum threshold for black ownership of mining companies to 30% from 26%.
The Chamber of Mines, which represents the majority of the miners operating in the country, the world’s top platinum producer, has suspended a court challenge to the modified charter approved by Mantashe’s predecessor, Mosebenzi Zwane, which it says were imposed without consultation.
Together with an increased black ownership, those changes included a requirement for miners to pay 1% of annual revenue to communities and give control to black owners of new prospecting rights.
Companies were also to guarantee that at least 80% of their total spending would go to local firms, including a minimum of 65% of spending of services to black-owned suppliers.
Mantashe said his department was developing a program for including all stakeholders and communities on the revisions to the divisive mining ownership law, Eyewitness News reports.
“It is my wish that the final Charter is finalized and gazetted during the first half of this year,” he said.
South Africa holds the world’s biggest reserves of platinum, chrome and manganese, and the mining sector as a whole continues to be a major employer. Last year alone, the industry contributed 8% to gross domestic product and accounted for 25% of the country’s exports.