The haste at which South Africa’s mining minister, Musebenzi Zwane, is pushing for the implementation of contentious changes to the Mining Charter has caused an atmosphere of uncertainty in the country’s mining sector.
Zwane has announced that the amended version of the Mining Charter is to be gazetted next week.
Two weeks ago, during the presentation of the Department of Mineral Resources’ budget, Zwane pronounced that the Mining Charter would be the tool to “drive growth and transformation in the sector”.
The South Africa’s Chamber of Mines, which serves the interests of big mining companies, some of them listed on the Johannesburg Stock Exchange (JSE), has been unequivocal vocal in its condemnation of the move.
There has been concerns that when discussions of the amendment to the Charter were being made, mining companies whose operations the changes would impact on were not adequately concerned.
The Chamber of Mines has yet to reach a consensus with the Department of Mineral Resources and the Department Trade and Industry over the criteria which is used to determine compliance.
The revised Mining Charter has raised the threshold of a 30% minimum of black ownership of mining companies purportedly with the aim of transferring mineral wealth, which is said to be concentrated in the hands of white to black. Strangely enough, under first Charter most mining companies could not meet the minimum of 26% black ownership.
Commentators have repeatedly questioned the timing of the Revised Mining Charter as mining companies are facing effects of low commodity prices. The contribution of the country’s mining sector to the Gross Domestic Product (GDP) has shrunk significantly since 2001.