black ownership17 May 2015 07:48
South Africa's government and the mining industry are at loggerheads over rules about black ownership and investment in the sector.
It is claimed miners are too slow to meet rules that at least 26% of company shares should be under black ownership.
But the Chamber of Mines told the BBC the confusion was due to the government using a different measurement system.
The government revealed this week that only about 20% of firms met its black economic empowerment rules.
The mining industry had been given a decade - until 2014 - to increase the shareholdings of black investors to at least
South Africa's mining industry is at loggerheads with the government over levels of share ownership under black economic empowerment
On Thursday, Mines Minister Ngoako Ramatlhodi said that only a fifth of companies, based on the number of workers, had finalised the transfer of ownership. Several firms failed to meet "the full requirements of meaningful economic participation," he was reported as saying.
But, speaking to the BBC, Roger Baxter, the chief executive of the Chamber of Mines, the body that represents most of the industry, defended the sector's efforts to meet the rules.
"Our view is that the industry is way beyond the ownership required by the charter," he said.
Licences
If mining companies fail to meet the targets of having more black ownership the government can revoke their licences, so this is an issue that the industry could do without at a time when it is facing several challenges.
"It is indeed a challenging time for the industry, said Mr Baxter. "Obviously commodity prices have been weaker than they've been for some time, and we've had some domestic cost pressures feeding through."
Shares in mining companies have been battered as the markets have reacted to falling prices of commodities such as platinum or iron ore, so this could be a good time for black investors to acquire stakes in the sector.
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