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Mining companies operating in South Africa, including Anglo American (LON:AAL) and Sibanye Gold (JSE:SGL) (NYSE:SBGL), saw their stock collapse Thursday after the country’s goverment increased the minimum black ownership requirement for local mines and set a 12-month deadline for them to comply with the new rules.
Companies operating in the country will have to raise their black-owned stakes to 30%, from the previous 26%.
Under the revised version of the country’s Mining Charter, companies now have to raise their black-owned stakes to 30%, from the previous 26%, to ensure more proceeds from the country’s natural resources flow to the black majority, Mineral Resources Minister Mosebenzi Zwane said, FT.com reported.
Sibanye, South Africa’s largest gold producer, dropped 7.4% at 1:00PM in Johannesburg and it was 2.65% down in New York at 10:00AM ET, while AngloGold Ashanti (NYSE:AU) was 2.80% in New York at 10:04AM.
Kumba Iron Ore (JSE:KIO) was 5.7% lower in late afternoon trading. Anglo American fell 6% in London.
The charter was introduced in 2002 in the world’s top platinum producer to increase black ownership in the mining sector, which accounts for roughly 7% of South Africa’s economic output.
The new rules include a requirement for miners to pay 1% of annual revenue to communities and give control to black owners of new prospecting rights.
Companies will also have to guarantee that at least 80% of their total spending goes to local firms, including a minimum of 65% of spending of services to black-owned suppliers.
More to come…
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Source:: Infomine
The post South Africa just hiked black ownership rules, miners getting crushed appeared first on Junior Mining Analyst.