• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 12 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 10 hours Europe: The Cracks Are Beginning To Show
  • 11 hours Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 45 mins Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 6 mins Hong Kong protesters appeal to Trump for support.
  • 58 mins Millennials: A boil on the butt of the work ethic
  • 27 mins A little something for all you Offshore swabbies
  • 7 hours Ban Fracking? What in the World Are Democrats Thinking?
  • 11 hours LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 9 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 2 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 2 hours Shale profitability
  • 10 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 20 hours Yawn... Parliament Poised to Force Brexit Delay Until Jan. 31
  • 7 hours Let's shut down dissent like The Conversation in Australia
Alt Text

Vanadium Spikes On New Chinese Regulations

A new regulatory measure in…

Alt Text

Chinese Rare Earth Exports Tumble As Trade War Accelerates

China, the world’s largest producer…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Mining Industry In South Africa Braces For New Regulations

It might be the biggest issue in mining you haven’t heard about. But events this week suggest that one “sleeper” problem may be about to leap to the main stage.

That’s the introduction of a new mining charter in key producing nation South Africa. Which the government said is going ahead this coming month — despite objections from miners, who say the new rules will have “dire consequences” for the industry.

The new charter has in fact been winding its way through political process for several months. But South Africa’s department of mineral resources said late last week that the deal is nearly done — with the new rules ready to be finalized for next month.

The charter as currently contemplated brings some critical changes for South Africa’s mining sector. For one, it will introduce new and additional taxes on mining companies — designed to fund a government body called the Mining Transformation and Development Agency.

The charter also introduces some stringent new requirements for black empowerment. Requiring boards of directors for mining companies to be 50% black persons — and senior management to be 60% black.

The rules also call for 20% of both boards and senior management to consist of black women.

One final contentious point is the so-called “once empowered, always empowered” issue. Springing from current rules that require mining companies to be 26% owned by black shareholders.

Mining companies have argued that if they sell 26% to black owners — and then those owners turn around and sell the shares — they should still be considered “empowered” even if black ownership then falls below 26%. Related: Why Mexico’s Oil Reform Is A Huge Opportunity For Investors

But the new charter says otherwise. Stating it is the responsibility of the company to ensure a constant 26% black shareholding now and in the future.

South Africa’s chamber of mines released a statement Thursday saying the new changes will be damaging to an industry that already lost $2.6 billion last year. Chamber representatives were particularly concerned about the proposed new taxes — which they say come at a time when mining companies can least afford the burden.

If the charter does go ahead over the coming month, it could push South African mining companies deeper into distress. Potentially affecting global markets for gold, platinum and coal. Watch for final ratification of the charter — and to see what the exact financial effects will be on miners in this key nation.

Here’s to battening down.

By Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Peter Dykes on November 30 2016 said:
    Remind me never to buy shares in a South African mining company!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play