Investors are ringing alarm bells after the new mining charter was released by Mineral Resources Mosebenzi Zwane.
The new mining charter, announced by mining minister Mosebenzi Zwane on Thursday, has resulted in backlash from stakeholders, including unions and investors, Business Day reported on Monday.
The mining sector is now being called “uninvestable”. The charter includes requirements for companies to increase empowerment ownership to 30% within 12 months.
According to Business Day, Investec, in a note to its clients, said the charter made “South African miners uninvestable to a large segment of the market and it will be very tough to attract fresh capital to an already unloved sector.”
Nicola Jackson from Fasken Martineau told Business Day: “It is highly arguable that this new top-up provision is constitutional as it attempts to impose retrospective obligations on already existing mining right holders.”
JP Morgan Cazenove reportedly said: “We believe a protracted and antagonistic time line is likely, which we expect will be negative to SA risk premia and corporate and institutional investment in SA’s mining sector.”
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