Stricter transformation requirements a fair price to pay for mining policy certainty
If investors know the requirements and have more certainty they will not change in the foreseeable future, it will be a massive boost for the sector
SA’s controversial mining charter is being given top priority by new Mineral Resources Minister Gwede Mantashe, who has promised to finalise the reviewed charter by the end of May. We believe that while more stringent transformation requirements are likely, the negative effect could be outweighed by greater policy certainty, which may well incentivise fresh investment in the beleaguered mining sector. The much-maligned third version of the mining charter (Mining Charter 3) was published in June 2017. It was universally condemned by the industry, its critics arguing that in its current form, it would discourage any new mining investment in SA and pose a serious threat to the sustainability of existing investments. The Chamber of Mines responded by taking the Department of Mineral Resources to court in order to challenge the charter’s implementation. Recent developments Cyril Ramaphosa taking over as President, and the subsequent replacement of mineral resources minister Mosebenzi Zwa...
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