RANDFONTEIN, SOUTH AFRICA JANUARY 19: Mineral Resources Minister Mosebenzi Zwane addresses the media during the release of the 2016 health and safety statistics in the mining sector on January 19, 2017 in Randfontein, South Africa. Zwane said 73 fatalities were reported in 2016 compared to 77 during the previous year which translates to 5% […]
RANDFONTEIN, SOUTH AFRICA JANUARY 19: Mineral Resources Minister Mosebenzi Zwane addresses the media during the release of the 2016 health and safety statistics in the mining sector on January 19, 2017 in Randfontein, South Africa. Zwane said 73 fatalities were reported in 2016 compared to 77 during the previous year which translates to 5% […]
Tebello Chabana is a Senior Executive for the COM and has made the worrying claim in court papers filed in the High Court in Pretoria.
Back in June, Mineral Resources Minister Mosebenzi Zwane announced that 30% of companies in the mining industry must be under the control of black ownership.
The current percentage is at 26%, and forcing a reshuffle at the very top of 1 in 25 mining businesses is not perceived to be a helpful change.
Read: President Zuma reveals he and cabinet approved of widely-condemned mining reforms
The new legislation also insists mining prospecting rights need to have a 50% plus one share of black ownership, so it constantly keeps a majority.
The Chamber of Mines says this is playing with fire, and that the rapid destabilisation is taking billions off of the industry’s value:
“The shock induced in all role players within the mining industry has been so profound that an amount in excess of R50 billion was wiped off the market value of shares in listed mining companies.
“The effect of the 2017 charter has indeed been so profound that Moody’s, one of the top three sovereign rating agencies, characterised it as ‘credit negative’, implying that it may lead to a further cut in South Africa’s credit rating.”
Read: Chamber of Mines rejects 30% black ownership rule, markets in freefall
Zwane has set a deadline of 12 months for mining businesses to implement the structural change but has not yet decided whether firms must keep this new set-up permanently.
When the 2017 Charter was first announced, it caused economic chaos in South Africa; the rand lost 2% of its value and early predictions for the cost to mining stood at R30 billion. Somehow, the outlook has got even bleaker.
Minister Zwane has at least said he will not implement the ownership changes until the interdict application has been heard and ruled upon by the judge.
The COM’s application to block this move is expected to be heard in September.
