The Chamber of Mines of South Africa said on Wednesday that R50 billion has been wiped off the market value of shares of listed mining companies since the publication of the contentious Mining Charter in June.
This is revealed in the Chambers 277-page founding affidavit submitted on Tuesday to the North Gauteng High Court in Pretoria for the application of a judicial review and setting aside of the 2017 Reviewed Mining Charter.
“The Reviewed Broad Based Black-Economic Empowerment Charter for the South African Mining and Minerals Industry” was published by the Minister of Mineral Resources Mosebenzi Zwane on 15 June.
The Charter sets new black ownership targets for the industry, including that new mining rights holders have 30 percent black ownership shared among employees, communities and black entrepreneurs.
The Chamber went to court to file an urgent interdict against implementation of the provisions of the Charter and challenged its content. That application will be heard between December 13 and 14 at the same court.
In its founding affidavit, the Chamber argues that the publication of the Charter has, and continues to have, a disastrous effect upon the mining industry as a whole, as well as investors, stakeholders and employees in that industry.
The Chamber further argues that the Charter has contributed to negative credit outlook for South Africa which may further hurt the country’s credit rating.
“The shock induced within all role players in the mining industry, including financial commentators, has been so profound that an amount in excess of R50 billion was wiped off the market value of shares in listed mining companies upon the publication thereof,” the Chamber said.
“The 2017 Charter is furthermore confusing and confuses, and so contradictory is its core provisions, that not only are the mining companies perplexed as to what they are required to do, but legal experts themselves confused and find themselves unable to provide clear advice to their mining and investment clients as to the meaning and effect of the 2017 Charter.
“In short, the publication of the 2017 Charter has been an unmitigated disaster both for the mining industry as a whole and for South Africa.”
The Chamber said that in publishing the 2017 Charter, Zwane had purported to exercise powers which reside exclusively with National Assembly and thus “plainly usurped the role of Parliament”.
Last month, Zwane agreed with the Chamber that he will not implement the Charter until judgement has been handed down in the Chamber’s court application for an urgent interdict.
– African News Agency (ANA)