Move to increase stakes held by black shareholders put on hold
Johannesburg – South Africa’s government has suspended a contentious new charter for the country’s beleaguered mining industry, less than a month after it was introduced.
Mosebenzi Zwane, mining minister, agreed to stop implementation of the charter while South Africa’s chamber of mines, an industry body, seeks an “urgent interdict” on its provisions in the courts, the chamber said on Friday.
The mining charter would have required miners operating in South Africa, including Anglo American and Glencore, to permanently increase stakes held by black shareholders to 30 per cent or more within a year in order to redress post-apartheid inequality in the industry.
An earlier charter set this level at 26 per cent, but the latest version would have required miners to raise stakes up to the new limit even after previous black investors have sold out.
Companies fear that maintaining the stakes at 30 per cent would force them to dilute existing shareholders many times given a small base of black capital able to buy shareholdings.
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