February 18, 2018 / 4:36 PM / 3 months ago

South Africa government, mining group agree to postpone court challenge

JOHANNESBURG, Feb 18 (Reuters) - A South African industry group representing mining companies has agreed to postpone a court challenge against new regulations that included a requirement for more black ownership of mines, to allow for negotiations with new President Cyril Ramaphosa.

The uncertainty around the new rules has deterred investment into a sector that accounts for 8 percent of South Africa’s economic output.

Mining companies have said many of the new rules are unaffordable while they grapple with depressed prices and rising costs. Rating agencies have also cited the policy as a concern, because it might hinder South Africa’s economic growth.

Supporters of the rule changes, proposed under former President Jacob Zuma who resigned last week, say they are necessary to improve conditions at the mines and more equitably share profits.

“The Presidency has been in discussion with the Chamber of Mines to resolve the impasse over the mining charter and to facilitate a process of developing a New Mining Charter that all stakeholders can support and defend,” Ramaphosa’s office said in a statement on Sunday.

The mining group had agreed to postpone its High Court challenge to the new rules, set for Feb. 19-21.

“The postponement serves to allow parties the space to engage and find an amicable solution,” the presidency said.

In an address to parliament on Friday and his first as president, Ramaphosa said he was committed to “policy certainty and consistency”, in contrast to his Zuma, who was criticised for policy shifts and unpredictable cabinet changes.

“We welcome the President’s intervention, and his commitment to engaging meaningfully with stakeholders in the industry – and others – on a New Mining Charter,” said Chamber of Mines president Mxolisi Mgojo.

South Africa is one of the world’s top exporters of gold and platinum metals and is heavily reliant on the industry for jobs and tax revenues. (Reporting by Mfuneko Toyana; Editing by Peter Graff)

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