Finance Minister Malusi Gigaba on Thursday acknowledged that the new Mining Charter had triggered a storm and said he hoped it would not weaken the recession-hit economy further.
He called on his Mineral Resources counterpart, Mosebenzi Zwane, to meet the sector as a matter of urgency and said National Treasury would ready to come to the table too.
“The finalisation of policy in mining is critical to unlock investment,” he told a briefing in Pretoria on steps to shore up the economy.
“The release of the Mining Charter is a welcome step but we note that there is already a reaction in the markets… there are a number of actions and concerns out there.
"We express the wish of National Treasury that the minister will engage with those sectors as a matter of urgency… to ensure that we do not have consequences that are going to weaken the economy further.
“National Treasury is prepared to participate in those sectors. We are interested parties in this regard we are ready to engage with all sectors to ensure we can find one another.”
The new charter raises the required black ownership of companies who seek to acquire new mining rights to 30 percent, with voting rights. The Chamber of Mines had threatened to challenge it in court, saying the targets were unworkable and raised fears of capital flight.
Gigaba called the media briefing to announce that ministers in the economic cluster would meet in a fortnight to devise a strategy to salvage the local economy, following confirmation that it had entered a recession and a fresh round of credit ratings downgrades.
Gigaba said key ministers were also called together on Wednesday night by President Jacob Zuma to discuss the economic crisis. Zwane attended that meeting.
Meanwhile, Chamber of Mines president Mxolisi Mgojo said on Thursday the mining industry was concerned about the new mining laws contained in the Reviewed Mining Charter, saying that these laws may result in capital flight from South Africa.
Speaking on the sidelines of the Chamber’s media briefing, Mgojo said the new laws were designed in a way that they had the potential of crippling the industry by driving investment away.
“There is no capital as we speak. People are trying to raise capital and capital is getting expensive. Our vice-president is abroad on an investor roadshow and he just called us today asking what is happening because investors are questioning him,” Mgojo said.
“Unfortunately, the situation we find ourselves in is that because of this uncertainty, and because of the environment becoming more difficult to operate in, capital is not going to come. Mines are not going to be developed, and jobs are going to be lost.”
The Chamber of Mines rejected the 2017 Mining Charter, saying it would approach the courts to stop the department of mineral resources (DMR) from implementing it.
The Chamber was responding to the gazetting of the charter by Mineral Resources Minister Mosebenzi Zwane on Thursday morning. The Charter sets new black ownership targets for the industry.
The targets included new mining rights, holders having 30 percent black ownership to be shared among employees, communities and black entrepreneurs. Mining rights holders who have complied with the previous target of 26 percent have to “top up” to 30 percent within 12 months.
Those applying for prospecting rights would be required to have a “minimum of 50 percent plus one black person shareholding”. These shareholders must have voting rights.
Asked what was behind the department’s lack of consultation, Mgojo said he was not quite sure what was happening and why the consultation process was abandoned, but only had 40 minutes to look at the Charter before it was presented to the public.
Mgojo said that relationship between the Chamber and the minister was strained as there has been no communication whatsoever with the DMR in the last two months.
“All I can say is that we are very saddened by the fact that a process that in the past has proved itself to have worked where difficult issues were able to be put on the table and resolutions which everybody could fully support, in this instance did not happen,” Mgojo said.
“We hope sense will prevail. We will try and reason with the Minister that the right process has to be taken to ensure that subsequent to consultation and negotiation resume.”