Mining Charter has already wiped out R50bn

The proposed 2017 Mining Charter has already wiped out R50 billion of the market value of shares in listed mining companies in South Africa and could destroy the industry altogether, the Chamber of Mines has contended in court papers.

The chamber’s urgent application to stop the implementation of the charter was yesterday removed from the court roll in the High Court in Pretoria for the filing of further affidavits.

This was after the chamber accepted an undertaking by Mineral Resources Minister Mosebenzi Zwane that his department would not implement the charter in any way pending judgment in the interdict application.

It is expected that the application will be heard in September.

The chamber’s senior executive of public affairs and transformation, Tebello Chabana, said in court papers its members were fully committed to the transformational objects of the Mineral and Petroleum Resources Act, but the Mining Charter would, if implemented, destroy the very industry whose survival was necessary to give effect to the objects of the Act.

“The publication of the 2017 charter had, and continues to have, a disastrous effect upon the mining industry as a whole, as well as investors.

“The shock induced in all role players within the mining industry has been so profound that an amount in excess of R50 billion was wiped off the market value of shares in listed mining companies.

“The effect of the 2017 charter has indeed been so profound that Moody’s, one of the top three sovereign ratings agencies, characterised it as ‘credit negative’, implying that it may lead to a further cut in South Africa’s credit rating.”