A major figure in the South African government has expressed concerns about the impact of the economic downturn on the country's black economic empowerment (BEE) drive.

The African National Congress ruled in 2004 that black ownership of mining companies needed to be increased, with miners selling 15 per cent of their assets by 2009 and 26 per cent by 2014.

However, Department of Minerals and Energy Director General Sandile Nogxina suggested yesterday (October 28th) that the move is being hit as black investors are struggling to secure credit as the market flounders.

He said: "If even the biggest companies are now struggling, how much more are black economic empowerment companies suffering?''

African Rainbow Minerals Ltd has claimed that around 15 of the 27 companies currently operating exploration projects will be unable to build mines in the current climate, according to a Bloomberg report.

Many of those are black-owned, such as the established Incwala Resources, whose Chief Executive Officer Ronnie Ntuli also told the news provider that "even we aren't out of the woods".

However, Patrice Rassou, who manages around $29 billion at the Cape Town-based Sanlam Investment Managers, has suggested that the situation has not yet become irreversible.

He said: "It's probably too early to say this whole experiment has failed. With the predicament we are in with funding, it's going to be a while before we see wholly black-owned companies emerging.''

The price of platinum has fallen by around 65 per cent since the record high of $2,225.50 per oz achieved on May 22nd.



Source:

South Africa Says Black Mine Ownership Drive Stalls (Update1) (27/10/08)
http://www.bloomberg.com/apps/news?pid=20601116&sid=aIQgr0JK8Zow&refer=africa