* Charter will seek to address racial inequality
* Industry concerned about impact on profitability
* ANC under pressure to retain black support base
* Separate minerals, petroleum law ready by June
(Adds Chamber of Mines, analyst)
By Wendell Roelf
CAPE TOWN, Feb 6 South Africa will publish its
revised Mining Charter by next month, a minister said on Monday,
bringing closer legislation meant to redress racial economic
inequality but which has concerned companies struggling with
lower commodity prices.
A separate Mineral and Petroleum Resources Development Act
will be finalised by June, proposing to give the state a 20
percent free stake in new energy projects and the ability to buy
The Mining Charter was introduced in 2002 to increase black
ownership of the mining industry, which accounts for around 7
percent of South Africa's economic output.
However, industry body the Chamber of Mines, has taken the
government to court over ownership interpretations in the latest
draft, which requires companies to keep black ownership at 26
percent even if black shareholders sell their stakes.
"We are not challenging the charter. We are fully supportive
of the entire transformation journey, but we just need the rules
to be absolutely clear to make sure we don't end up making
targets that are unobtainable but are pragmatic and realistic,"
said Roger Baxter, chief executive of the Chamber of Mines.
In a separate court case, a local law firm is challenging
the entire Mining Charter, arguing it is unconstitutional.
The new charter, which was revised in 2010 as part of a
consultative approach to regulations, also requires companies to
provide housing and other amenities in mining communities, many
of which are mired in poverty and neglect.
"If government goes ahead and implements the charter in its
current form it will be very unfortunate, because it would have
a pretty dramatic effect on investment in mining in South
Africa," said Peter Leon, a partner at law firm Herbert Smith
Freehills African practice.
South Africa is the world's top platinum producer and has a
significant gold industry but firms are struggling with
depressed prices, rising costs and bouts of labour unrest.
"For investors, it goes without saying that regulatory
certainty and the sanctity of private ownership under the
constitution is paramount," Anglo American Chief
Executive Mark Cutifani told delegates at a mining summit in
Mining companies say they were not consulted in the latest
draft but Minister of Mineral Resources Mosebenzi Zwane denied
this and sought to reassure investors.
"We have consulted extensively with stakeholders," Zwane
said in a speech at the opening of the summit.
"We call upon investors to come to South Africa and engage
us frankly as we move towards transformation of our economy. We
will continue to have an open door policy."
With rising unemployment, the ruling African National
Congress is under increasing pressure to address gaping
inequality that persists 23 years after the end of apartheid.
Black South Africans make up 80 percent of the 54 million
population, yet most of the economy in terms of ownership of
land and companies remains in the hands of white people, who
account for around 8 percent of the population.
(Additional reporting by Zandi Shabalala, Ed Stoddard and
Barbara Lewis; Writing by Joe Brock; Editing by James Macharia
and Susan Thomas)