Johannesburg - South African Mines Minister Mosebenzi Zwane has proposed raising the mandatory black ownership of mining assets to 30 percent from 26 percent, drawing opposition from some ruling-party officials who fear it will deter investment, two people familiar with the situation said.
The proposal is part of a long-delayed draft mining charter outlined by Zwane, an ally of President Jacob Zuma, to the African National Congress’ economic policy committee on May 13. Senior party policy officials warned of the potential negative consequences of his plans, said the people, who asked not to be identified because Zwane hasn’t formally proposed the changes for public comment before they become binding.
Zuma’s cabinet on Wednesday approved the draft mining charter, which will be released for public comment once it has been gazetted. ANC spokesman Zizi Kodwa didn’t answer calls seeking comment. It’s unclear whether the cabinet demanded changes.
South Africa’s Chamber of Mines said this week that the government needs to finalize its mining regulations if falling investment in the industry is to be reversed. Zuma, who’s due to step down as leader of the ANC in December and as the nation’s president in 2019, has called for “radical economic transformation” to more fairly distribute the benefits of South Africa’s economy among the black majority.
“The chamber has not had any sight of the proposed revised charter” and is unable to comment at this stage, Charmane Russell, a spokeswoman for the industry group, said in a text message.
The 30 percent black ownership can be made up of shares held by black investors, employees and community groups, the people said. Zwane didn’t answer calls made to his mobile phone.
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Metals and minerals account for about half of South Africa’s exports, with the country holding the biggest reserves of platinum, chrome and manganese. In 2010, Citigroup valued the mineral wealth at $2.5 trillion, the most of any nation. Mining companies including Anglo American, Glencore and AngloGold Ashanti operate in the country.
The proposed new charter has yet to be published more than a year after a draft version was made public, while the Mineral and Petroleum Resources Development Amendment Bill has also not been finalised after Zuma referred it back to parliament in early 2016.