South Africa has retained its 26 per cent black ownership target for mining companies in the country, it was confirmed yesterday (30th June).

Six years ago, the government unveiled a charter which required companies to sell 15 per cent of their assets to black investors by the end of 2009 and 26 per cent by 2014.

The move was designed to boost the roles within the mining industry of individuals disadvantaged by apartheid, which eventually came to an end in 1994.

Although there were suggestions that the 26 per cent target would be altered as part of a review of the charter, Mines Minister Susan Shabangu announced that it will remain the same.

She said: "The 15 per cent (black ownership) target for 2009 was missed and there is now an opportunity for the industry to make up for that. The 26 per cent target is confirmed for 2014.

"The process of the review (for the charter) has happened, so we will be releasing the results in August. The results will determine whether we amend or not."

Known as the Strategy for Sustainable Growth and Meaningful Transformation, the new document provides a number of reforms relating to black participation in the mining industry.

Black investors will be given full shareholder rights in all transactions, with deals taking place within agreed timeframes and incorporating the "prevailing market conditions".

Mining companies must ensure that at least 40 per cent of their board, executive committee, middle and junior management levels are occupied by previously disadvantaged people by 2014.

In addition, firms will be required to increase their spending on training to five per cent of their annual payroll, representing a sizeable rise from the previous target of three per cent.

Ms Shabangu noted that the government will aim to prevent black investors establishing firms simply to make a rapid profit rather than to exploit any of the country's minerals.

At the same time, there will be a requirement to ensure that black economic empowerment transactions are not formulated "merely for incorporating blacks as tokens", she added.

The new document also gives black investors voting rights and greater access to bank funding to improve their mines.

"A lot of the targets that were vague in the mining charter have become hard targets," Peter Leon, Chairman of the Mining Law Committee of the International Bar Association, told Bloomberg.

Mr Leon added that the commitment to revise the Mineral and Petroleum Resources Development Act will provide a "huge improvement".

South Africa is currently the world's largest producer of platinum and ferrochrome, and the fourth-largest gold-producing nation, behind China, Australia and the US.

Sources:

South Africa Maintains Its 26% Black Ownership Target for Mining Companies (30/06/10)

UPDATE 2-SAfrica retains black ownership target in mines (30/06/10)

© Adfero Ltd