South Africa Eases Free-Carry Rules in Final Mining Charter – by Sam Mkokeli and Felix Njini (Bloomberg News – September 20, 2018)

South Africa eased some of the more controversial provisions in a final version of its Mining Charter approved by the cabinet this week as the government seeks to provide policy certainty and ease investor concerns.

While holders of new mining rights must still give employees a 5 percent stake in the assets, they can choose to offset another 5 percent for nearby communities by investing in community development instead, Mineral Resources Minister Gwede Mantashe said Thursday.

Separately, the cabinet also approved a plan to withdraw the long-delayed Mineral and Petroleum Resources Development Amendment Bill, he said.

The Mining Charter is a set of rules aimed at distributing the industry’s wealth more widely among South Africans to make up for racial discrimination during apartheid.

The free carry — which was included in a June draft and means the respective groups don’t have to buy their shares or pay their way — was heavily criticized by the industry as likely to make new projects much tougher to finance.

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