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.
Mining companies operating in South Africa, including Anglo American (LON:AAL) and Sibanye Gold (JSE:SGL) (NYSE:SBGL), saw their stock collapse Thursday after the country’s government increased the minimum black ownership requirement for local mines and set a 12-month deadline for them to comply with the new rules.
Under the revised version of the country’s Mining Charter, companies now have to raise their black-owned stakes to 30%, from the previous 26%, to ensure more proceeds from the country’s natural resources flow to the black majority, Mineral Resources Minister Mosebenzi Zwane said, FT.com reported.
Companies operating in the country will have to raise their black-owned stakes to 30%, from the previous 26%.
Sibanye, South Africa’s largest gold producer, dropped 7.4% at 1:00PM in Johannesburg and it was 2.65% down in New York at 10:00AM ET, while AngloGold Ashanti (NYSE:AU) was 2.80% in New York at 10:04AM.
Kumba Iron Ore (JSE:KIO) was 5.7% lower in late afternoon trading. Anglo American fell 6% in London.
The South African rand fell as much as 2.1% against the dollar, the most since late March, as critics warned the charter would put off investors in a country that is already in recession.
The Chamber of Mines, which represents the majority of the miners operating in South Africa, said it would launch an immediate legal challenge to stop the regulations.
“The lack of meaningful engagement with the industry, and collective engagement with all stakeholders, has been most disappointing,” chamber president Mxolisi Mgojo said in a statement. He added that the charter contained a string of “red flashing lights” that would have “unintended consequences that go far beyond the mining sector.”
The original charter was introduced in 2002 in the world’s top platinum producer to increase black ownership in the mining sector, which accounts for roughly 7% of South Africa’s economic output.
The new rules include a requirement for miners to pay 1% of annual revenue to communities and give control to black owners of new prospecting rights.
Companies will also have to guarantee that at least 80% of their total spending goes to local firms, including a minimum of 65% of spending of services to black-owned suppliers.
9 Comments
Robert Mugabe
My African brothers to the south are finally deciding to use my highly successful policies for economic advancement. This will correct all the injustices of the white man and their imperialistic companies. In Zimbabwe these policies have lead to economic success beyond our wildest dreams. The South African leadership and the ANC are showing that they too can have a thriving economy like my country. This is great news.
Nasdaq7
The are going to dilute the shares, a stock market investment concept Mineral Resources Minister Mosebenzi Zwane is clearly not aware of, many companies will collapse. Investors won’t invest. Investment funds are about to leave with trillions of Rands of investment, the stock market will collapse and the Rand too. It’s called share holder dilution. Google it.
Thibo
I do not believe that its going to correct anything. BEE has never work. How do u think this thing will work? Look at tenders first before u can even start talking. I like when they take black ppl and expose them to higher position so that they/we can learn how to run a successful business and create generational wealth not this thing of taking from white ppl and giving to us without any hard work.
José Tangari
https://youtu.be/OhnQItl3jlg
JH
South Africa…this device in front of you is called .. “a toilet”.
You step into the middle of it,… yes its a bit difficult so just stand with your feet inside on the slope.
Ok, this thing is called .. “the chain”
Now pull the chain down and like magic …
…. western investors will be gone and be replaced by Chinese companies.
Eliminate Mercury
Great idea! Always worked in other African countries. Should be good for a few months before all companies leave. Many years ago Nigeria did the same for all companies and all went bankrupt within a year or left the country, the govt nationalized everything and of course every industry died. I’m confident this time is different.
Eliminate Mercury
Ps. 30% is the first step to 40% and then 50% and then 100%. Brilliant.
J. D. Baker
The Left is always promising a better tomorrow and more “free stuff”. The reality is of course entirely different as seen in Venezuela and Zimbabwe.
The empty promises, fantasies and illusion only lasts until the kleptocrats and their cronies have run out of others peoples money, destroyed productive citizens and businesses, and lowered the standard of living for everyone (except the kleptocrats and cronies of course).
Unfortunately, the lazy, ignorant, vulnerable and desperate are only too eager to believe the lies and impossible promises of the corrupt politicians who prey on their weakness and emotions.
This siren’s song of the Left will always lead to mass misery, unnecessary deaths and destruction. And, even then, the same pied pipers of the Left who caused the disaster will continue to blame everyone else and of course demand even more power, more stealing, less freedom, as they continue to destroy the economy and currency. The tendrils of corruption, rot and destruction spread like a deadly cancer, consuming the people and nation.
patentbs
This confirms it… you are nuts! The nation owns the resource and ‘rents’ the rights to miners. The nation sets the taxes and royalties and as such, controls much of the income of the miners. Then you can share the royalties with all of the black nationals you want to.
Of course that approach means less chance for corruption – so it is out!