• 25 mins ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 5 hours Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 9 hours Saudis To Award Nuclear Power Contracts In December
  • 12 hours Shell Approves Its First North Sea Oil Project In Six Years
  • 13 hours China Unlikely To Maintain Record Oil Product Exports
  • 14 hours Australia Solar Power Additions Hit Record In 2017
  • 15 hours Morocco Prepares $4.6B Gas Project Tender
  • 18 hours Iranian Oil Tanker Sinks After Second Explosion
  • 3 days Russia To Discuss Possible Exit From OPEC Deal
  • 3 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 3 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 3 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 4 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 4 days Falling Chinese Oil Imports Weigh On Prices
  • 4 days Shell Considers Buying Dutch Green Energy Supplier
  • 4 days Wind And Solar Prices Continue To Fall
  • 4 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 4 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 5 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
  • 5 days Saudis Shortlist New York, London, Hong Kong For Aramco IPO
  • 5 days Rigid EU Rules Makes ICE Move 245 Oil Futures Contracts To U.S.
  • 5 days Norway Reports Record Gas Sales To Europe In 2017
  • 5 days Trump’s Plan Makes 65 Billion BOE Available For Drilling
  • 5 days PetroChina’s Biggest Refinery Doubles Russian Pipeline Oil Intake
  • 5 days NYC Sues Five Oil Majors For Contributing To Climate Change
  • 6 days Saudi Aramco Looks To Secure $6B In Cheap Loans Before IPO
  • 6 days Shell Sells Stake In Iraqi Oil Field To Japan’s Itochu
  • 6 days Iranian Oil Tanker Explodes, Could Continue To Burn For A Month
  • 6 days Florida Gets An Oil Drilling Pass
  • 6 days Oil Prices Rise After API Reports Staggering Crude Oil Draw
  • 6 days Tesla Begins Mass Production Of Solar Shingles
  • 7 days EIA Boosts World Oil Demand Forecast For 2018 By 100,000 Bpd
  • 7 days Businessman Seeks Sale Of $5.2B Stake In Kazakhstan Oil Field
  • 7 days Exxon Accuses California Of Climate Change Hypocrisy
  • 7 days Norway’s Recovering Oil Industry Resumes Hiring
  • 7 days $2.3 Million Seized Following Singapore Oil Heist
  • 7 days China Nears 2016 Carbon Emissions Target
  • 7 days Oil Companies Respond Slow To New U.S. Lease Plan
  • 7 days Maduro To Issue First 100 Million Petros Despite Skeptics
  • 8 days Iraq Bans Kurdish Firm From Operating Kirkuk Oil Fields
Alt Text

Aramco’s “Acquisition Hit List”

As Saudi Arabia prepares for…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

South African Miners Disgruntled After Changes In Mining Code

South African Miners Disgruntled After Changes In Mining Code

The mining sector in one of the world’s most important platinum, gold and coal nations is in an uproar this week. After the government surprised the industry with some controversial changes Friday.

The place is South Africa. Where the national government published a draft of a new Mining Charter for the country’s industry late last week — containing some unexpected proposed measures. Related: This Is How Oilfield Services Are Surviving Low Oil Prices

One of the biggest surprises was new rules for Black Economic Empowerment (BEE) requirements. With the government making a decisive declaration on the so-called “once empowered, always empowered” issue.

Here’s the crux. Mining enterprises in South Africa are currently required to sell 26 percent of ownership to local BEE groups. But there’s been a lot of confusion about what happens after that.

For example, what if the black empowerment group then turns around and sells its share of the mining business to a non-BEE shareholder? Is it the responsibility of the mining company to go out and sell additional percentages to new BEE groups, in order to get back above the 26 percent threshold?

Miners have argued no — saying that if they met the 26 percent requirement, things are out of their hands if the BEE partner sells. One empowered, always empowered. Related: 200M Barrels Of Oil Sit In Idle Tankers Waiting To Unload At Chinese Ports 

But the proposed new mining charter disagrees. Here’s what the new text prescribes:

“Where a BEE partner or partners have exited, BEE contract has lapsed or the previous BEE partner has transferred shares to a non-BEE company, the mining right holder must within the three years transitional period from the date of publication of the charter review its empowerment credentials consistent with the amended 2016 mining charter.”

Such a rule would put miners on the treadmill — having to constantly replace BEE shareholders if old ones exit. And that’s not the only change the new rules are proposing.

The draft charter also makes new stipulations on where the 26 percent BEE ownership must go. With the new rules specifying that 5 percent overall ownership must go to mine workers (through a trust), while another 5 percent must be owned by a local community trust. Related: Will China's Slowing Economy Stall The Silk Road Project?

The new rules also increase targets for black representation in management to between 60 percent and 88 percent, from a former 40 percent. And raise requirements for sourcing capital goods from local black interests.

South African mining leaders such as Sibanye Gold immediately said that elements in the new proposal are “unacceptable”. With the country’s Chamber of Mines saying it will engage with the government during the 30-day comment period for the draft rules, to see what can be changed.

Watch for more developments on the acceptance or rejection of this critical document, in one of the world’s most important mining centers.

Here’s to BEEing prudent

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News