South Africa’s currency and shares in miners active in the country jumped on Friday afternoon after the government agreed to suspend the implementation of controversial new rules for the mining sector.
The South African Chamber of Mines – the industry employers’ organisation – said on Friday that the minister of mineral resources had agreed not to implement its new mining charter “in any way” until judgement has been given in response to court action brought by the Chamber.
The Chamber of Mines, which represents major companies such as Anglo American, is seeking an “urgent interdict” to prevent the charter from coming into force.
Under the terms of the proposed charter, businesses would need to be at least 30 per cent owned by members of South Africa’s majority black population. The rules would apply even where previous black investors have sold down their stakes over the past 15 years, meaning companies including Anglo and Glencore would need to sell stakes in their local assets.
The government’s Department of Mineral Resources has requested “extra time to prepare its answering affidavit”, meaning a hearing that was scheduled to take place next Tuesday will be pushed back, most likely until September.
Roger Baxter, the Chamber of Mines’ chief executive, said “this is a satisfactory arrangement for the Chamber and the industry, whose primary objective through the interdict application remains to ensure that the DMR’s Charter does not come into effect”.
At publication time, the rand was 1.4 per cent stronger against the dollar for the day, at 13.0099 per dollar.
Shares in Anglo American rose to the top of the FTSE 100, up 3.2 per cent, while New York-listed shares in Barrick Gold climbed 2 per cent and Johannesberg-listed Harmony Gold rose 2.8 per cent.