Mosebenzi Zwane. Picture: REUTERS
Mosebenzi Zwane. Picture: REUTERS

The imposition of a contentious new Mining Charter by Mineral Resources Minister Mosebenzi Zwane on Thursday slashed the value of JSE-listed mining stocks R50.69bn, making the sector “uninvestable” and subject to a spate of legal challenges.

Far from creating the sought-after certainty and investor-friendly policy document guiding racial transformation of the mining industry many had hoped for, the third version of the charter created anger, confusion and uncertainty, with foreign investors warning of repercussions and a potential exodus of companies from one of the world’s mineral treasure troves.

The charter, which includes the demand for companies to top up empowerment ownership holding to 30% within 12 months, from the 26% target for end-2014 among a host of controversial clauses, made “South African miners uninvestable to a large segment of the market and it will be very tough to attract fresh capital to an already unloved sector”, Investec said in a note to its clients.

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