Years of gridlock face SA as new mining charter paralyses industry
Executives from Sibanye Gold, SA’s biggest gold miner, were in Los Angeles in the final stages of a roadshow with US bond fund managers last month when a bombshell hit from back home. The government had introduced shock new rules requiring local mines be 30% black-owned in perpetuity, toughening existing requirements and implying hefty dilution for shareholders. South African stocks tumbled and bond yields rose that day. The measures, called Mining Charter 3, put at risk funding for Sibanye’s $2.2bn acquisition of Stillwater Mining Company of the US, the biggest foreign takeover by a South African mining company in 16 years. "We had to hold back the financing, find out what the charter meant, and rebrief all our potential investors," CEO Neal Froneman said by phone. "A number of institutional investors pulled out of the bond process saying the risks in SA were just too high and it’s becoming uninvestable." Companies and investors say the new rules and uncertainty will starve the ind...
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