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South Africa’s Department of Mineral Resources has published a draft Mining Charter that seeks to raise black ownership of mining companies operating in the country to 30% from the existing 26% within five years.

The new draft charter comes after negotiations were conducted with mining communities and organisations across the country.

The ministry has invited members of the public to submit their responses to the draft charter before 27th July this year, following which a finalised draft will be subjected to the government’s Socio-Economic Impact Assessment System (SEIAS), and then submitted to Cabinet for approval.

“Publishing of the Charter moves us a step forward in terms of ensuring regulatory and policy certainty for the industry.”

A previous version of the charter was considered by various industry stakeholders as detrimental to investment prospects in the country.

Under the new draft charter, the government proposes to extend the time for permit-holding companies to meet the new black ownership requirement from one year to five years.

South African Minister of Mineral Resources Gwede Mantashe said: “Publishing of the Charter moves us a step forward in terms of ensuring regulatory and policy certainty for the industry.

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“We urge members of the public to submit their comments, views and ideas in order to shape the Charter.”

The new charter also proposes a 50% reservation for black South Africans on the boards of mining companies, as well as payment of 1% of profit earned by new mining rights holders to employees and communities.

The Minerals Council, a prominent group lobbying on behalf of the mining industry, stated that some elements of the draft charter do not promote competitiveness, which would result in limited investment in new exploration and mining.

In a statement, The Minerals Council said: “Given South Africa’s mature mining sector, a 10% total free carried interest on new mining rights will materially undermine investment, by pushing up investment hurdle rates and ensuring that many potentially new projects become unviable.”

Last year, the government suspended the implementation of a previous version of the mining charter following a court battle with the industry.