South Africa’s mines minister may be seeking to increase the share of the country’s required Black ownership in mining assets to 30 percent, up from 26 percent, raising investment fears, according to Bloomberg News.
The news organization, citing two people familiar with the matter, reported May 25 that Mosebenzi Zwane, an ally of President Jacob Zuma, put forth the plan as part of a long-delayed draft mining charter to the economic policy committee of the country’s ruling party, the African National Congress, on May 13. The charter, it reported, was approved May 24 by the president’s cabinet but has not yet been released to the public.
The 30-percent Black ownership could potentially be composed of shares held by Black investors, employees and community groups, sources told Bloomberg.
Officials did not provide comment to news outlets about the matter, it said.
The mandatory Black ownership standard was initially implemented as one way to address the country’s legacy of apartheid, which prevented Black people from participating in key business sectors.
But talk of the move has some worried that such an increase could scare off potential investors. Minerals and metals account for a large part of South Africa’s exports.
The Chamber of Mines of South Africa reported earlier this year that mining production declined by 5 percent in 2016 compared to 2015, confirming fears. The country has been plagued by falling commodity prices and high unemployment. Zuma is expected to step down as party leader in December and as president in 2019.
The possible new ownership proposal would be a turnabout by the government, which in April 2016 said that it planned to keep Black mine ownership at 26 percent, Bloomberg reported.