August 4, 2017 / 10:26 AM / a year ago

UPDATE 2-South Africa's mines minister withdraws plan to suspend rights

* Mines minister withdraws moratorium

* Thousands of mining jobs on the line

* Mineral Resources Department concerned about jobs (Adds minister, analyst quote, job cuts)

By Tanisha Heiberg

JOHANNESBURG, Aug 4 (Reuters) - South Africa’s mineral resources department has withdrawn its plan to suspend the issuance of new mining and prospecting rights, a move critics said could hamper growth and investment.

Mines Minister Mosebenzi Zwane also met with Sibanye Gold on Friday to express his concerns about layoffs at the company, which is restructuring its operations in a move that could affect 7,400 of its employees.

Rival AngloGold Ashanti and Anglo American Platinum have in recent weeks said a combined total of 18,000 jobs were on the line.

Unions have expressed concern over the job losses at a time when Africa’s most industrialised economy has sunk into recession and had its credit rating downgraded to junk by two of the three main credit rating agencies.

Unemployment is at a 14-year high of 27.7 percent and business confidence is sagging.

The minerals department said in a statement that it would not go ahead with its proposed the moratorium on new prospecting and mining rights, which Zwane had proposed last month.

The Chamber of Mines, which represents mining companies such as Anglo American and Sibanye Gold, had challenged the proposed moratorium in court.

It said the High Court had approved an agreement between the minerals department and the chamber preventing the moratorium.

The mining sector is beset by policy uncertainty after the government unveiled new black ownership rules while depressed metal prices and soaring costs has led to the spate of job cuts.

“We want to, as far as possible, ensure that we can keep the operations open, if they can be viably mined by other operators,” Zwane said after meeting with Sibanye executives.

The mining chamber is also at logger-heads with Zwane and has also filed a court challenge against a new mining charter that proposes to increase the required level of ownership of mining firms by black people.

Analysts said the charter contained proposals that are a concern for mining companies and investors, and were also contributing to the job layoffs.

“What we are seeing from the mining charter and threats like that are a concern for those companies and for that reason they coming out and saying they have got to cut back,” said Gryphon Asset Management chief investment officer Abri du Plessis. (Additional reporting by Wendell Roelf in Cape Town; Editing by James Macharia and David Evans)

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