MICHEL PIREU: Despite mining-sector volatility, investors can still reap rewards
New Mining Charter will hurt the industry, but traders need to be patient and stay informed
Once the darling of the South African economy, the local mining sector seems to be digging itself deeper and deeper into a dark hole and the revised Mining Charter isn’t likely to do it any favours. Already shedding jobs faster than you can say "monopoly capital" (70,000 in the past five years) and, with more employment cuts (up to 8,500 at Anglo Gold alone) and mine closures looming, the chances of the sector resurfacing anytime soon grow slimmer each day. So, where to for the avid investor in mining stocks? "Believe it or not, there are still options," says Nilan Morar, head of trading at GT Private Broking who sent us his take on the situation, with some advice.Also, it requires 1% of mining companies’ revenue, a total of R5.7bn, to be paid into development projects over two years. Given that dividends paid by miners in 2016 amounted to R6bn, there won’t be much left for shareholders in future. Mining companies will have only 12 months to comply with the new charter’s objectives....
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