JOHANNESBURG — South Africa has announced a “revolutionary” new mining code to force companies to give a 30-per-cent ownership stake to black partners, triggering a plunge in mining stocks and a swift threat of legal action by the industry.
Canadian companies such as Ivanhoe Mines Ltd., which is developing one of the world’s biggest platinum mines in South Africa, would be among those potentially affected by the new ownership rules. The new code would increase the minimum black ownership from 26 per cent to 30 per cent for mine owners, while also requiring companies to be majority black-owned if they want a prospecting licence.
Mining companies would have to give 1 per cent of their annual revenue to their black shareholders before paying dividends to any other shareholders. The new code would take effect in 12 months.
South Africa’s Mining Minister Mosebenzi Zwane called it a “revolutionary tool” and a “key instrument for radical change” to address inequalities in the mining sector and provide benefits for South Africa’s people.
But the Chamber of Mines, the leading industry group, called the new rules “unworkable” and “destructive.”
For the rest of this article, click here: https://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/new-mining-rules-in-south-africa-would-require-30-per-cent-black-ownership/article35318867/