AEMA, coalition launch legal challenge to BLM Conservation and Landscape Health Rule
The American Exploration & Mining Association was joined by a coalition in filing a challenge last Friday in the US District Court for the District of Wyoming.
South Africa has suspended the implementation of a divisive mining ownership law pending a judgement in an urgent interdict application by mining companies, the country’s Chamber of Mines said.
The industry body, which represents the majority of the miners operating in South Africa, had applied in July for an urgent high court injunction to prevent the implementation of the new rules, announced in June.
Among the changes, the fresh directive increased the minimum black ownership requirement for local mines to 30%, from the previous 26%, and set a 12-month deadline for them to comply with the new rules.
Revised charter had increased the minimum threshold for black ownership of mining companies to 30% from 26%. It also established that firms must pay 1% of turnover to their black empowerment partners.
It also established that mining companies must pay 1% of turnover to their black empowerment partners, which if in effect last year it would have consumed 95% of the 6 billion rand (about $460 million at today’s rates) paid in total dividends by the industry last year, the chamber said.
The revised mining charter not only raised costs and imposed new levies to fund community development, but it has also put at risk some major deals recently announcement. Among them, is Sibanye Gold’s (JSE:SGL) (NYSE:SBGL) $2.2 billion acquisition of US-based Stillwater Mining, the biggest foreign takeover by a South African mining company in 16 years.
“We had to hold back the financing, find out what the charter meant, and rebrief all our potential investors,” Sibanye’s chief executive officer Neal Froneman recently told Bloomberg. “A number of institutional investors pulled out of the bond process saying the risks in South Africa were just too high and it’s becoming uninvestable.”
South Africa holds the world’s biggest reserves of platinum, chrome and manganese, but investment in the sector has dropped in each of the past two years as a result of legal uncertainty and labour disputes.
Shares in most mining companies operating in the country, including Anglo American (LON:AAL), Glencore (LON:GLEN), and AngloGold Ashanti (JSE:ANG) were up on the news.
Sibanye, South Africa’s largest gold producer, was trading 3% higher in New York at 10:06 AM and moderately high in in Johannesburg (o.32%) in late afternoon.
Shares in AngloGold Ashanti (NYSE:AU) jumped more than 2% in New York at 10:08AM, while Anglo American was trading 2.6% higher in London to 1,122.50 at 3:10PM local time.
3 Comments
Steven Walker
So they are saying..come on in the water is fine? Only problem is …the water is FULL of GOVERNMENT SHARKS and corruption…..”UNINVESTABLE” is the correct term for South Africa.
potevan
“Among the changes, the fresh directive increased the minimum black ownership requirement for local mines to 30%, from the previous 26%, and set a 12-month deadline for them to comply with the new rules.”
What this article leaves out is that these percentages (30%) needs to be maintained in perpetuity, meaning that the shareholde base gets diluted constantly as black shareholders sell thir shares…so what investor is going to be that stupid…
patentbs
Don’t wait for the goose to drop the eggs. I have a better idea, let’s kill it now!
The dumbest thing possible. What do you do, stamp the certificates ” cannot be transferred to a non black holder”?
Not much wonder this will always be a ‘developing’ continent.