Gold mining companies on Thursday lauded the empowerment provisions of the new mining charter while the market reacted neutrally.
The JSE mining index lost 0,5 percent by Thursday afternoon, in line with the 0,5 percent dip in the allshare index. The charter, provided for by the Mineral and Petroleum Resources Development Act, states that 26% of existing South African mines should be owned by historically disadvantaged people in 10 years.
Outlining the latest draft to reporters in Pretoria on Wednesday, Minerals and Energy Minister Phumzile Mlambo-Ngcuka said the charter set a 15% target for the first five years. The mining industry had agreed to raise R100-billion over the same period to assist new entrants.
Said AngloGold CEO Bobby Godsell on Thursday: ”AngloGold has completed a number of sales of assets in the past four years which have shown how it is possible to craft viable transactions which expand empowerment with no significant loss of value and which will be credited by the charter. We have no doubt that the 15% target can be realistically met.”
Godsell said AngloGold was considering the implementation of an employee share ownership plan. Gold miner Harmony’s chief executive Bernard Swanepoel also expressed his support for the Act. While the charter prescribed some very demanding conditions, Harmony was well positioned to meet them well ahead of the targeted date.
Swanepoel said: ”We support the mining charter which in addition focuses on other important issues, such as the development of our people and the communities around our mines, as well as beneficiation.
”We remain committed to the beneficiation of the gold we produce, thereby enabling a broader sharing in the benefits of gold mining.”
Standard Bank group economist Dr Iraj Abedian said the charter represented a giant leap towards the reduction of investment risk in South Africa.
”The mining charter marks another significant step towards the normalisation of the South African socio-economic environment.”
The impact of the charter was likely to go beyond the mining sector and could well form the foundation for other sectoral charters, Abedian said.
Abedian said that a well-functioning market economy required policy predictability and a credible operational framework.
”In this regard, the mining charter is a pragmatic foundation for the resolution of some critical and competing imperatives.”
The fact that the charter enjoyed the full support of the mining houses, the government and the labour unions was vital for its credibility.
AngloGold’s shares rose by two percent to R520,00 by Thursday afternoon while Harmony’s JSE counter dropped by 0,3% to R155,50. – Sapa