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South Africa may enforce law on black ownership of mines

South Africa may enforce law on black ownership of mines
South Africa’s Department of Mineral Resources has filed an application reportedly seeking to make the country’s laws on black ownership of mines stricter, by making black-owned stakes permanent.

Under the current legislation in the country’s mining charter, white owners of mining companies are obliged to sell at least 26 percent of their companies to new black owners.

However, there is a so-called “once empowered, always empowered” principle, under which a company which has sold a required stake to a black owner and then bought it back remains compliant with the charter, despite losing its black ownership due to such an exit.

The case has been mooted for several years but has recently been revived in South Africa. On April 4, the High Court in Pretoria ruled that the first two versions of the country’s mining charter do not oblige miners to top up black-shareholding levels if they previously met the 26 percent quota. In other words, the High Court ruled in favor of the ‘once empowered, always empowered’ principle.

But the Department of Mineral Resources wants to reverse the High Court decision and enforce the black ownership quota.

“The Chamber of Mines is currently reviewing the specified grounds of appeal, although the Department of Mineral Resources’s appeal appears to center on the majority judges obiter dictum comments about the legality of the 2010 charter and the enforceability of the charters,” the nation’s mining lobby said, as quoted by Bloomberg.

South Africa is said to boast the world’s largest reserves of platinum and manganese, and also has gold, iron-ore, coal, chrome and zinc in its deposits. Uncertainty about the mining charter and ownership levels have deterred investment in a sector that accounts for 8 percent of the country’s GDP.

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