Tebello Chabana, Senior Executive for the Chamber of Mines made the worrying claim in court papers filed in the High Court in Pretoria, which urge government to halt the implementation of the charter until it is properly revised.
Chabana said, “The shock induced in all role players within the mining industry has been so profound that an amount in excess of R50 billion was wiped off the market value of shares in listed mining companies.
“The effect of the 2017 charter has indeed been so profound that Moody’s, one of the top three sovereign ratings agencies, characterised it as ‘credit negative’, implying that it may lead to a further cut in South Africa’s credit rating.”
Chabana stated that the Chamber’s members were fully committed to the transformational objects of the Mineral and Petroleum Resources Act, but the Mining Charter would, if implemented, destroy the very industry whose survival was necessary to give effect to the objects of the Act.
“The publication of the 2017 charter had, and continues to have, a disastrous effect upon the mining industry as a whole, as well as investors,” he added.
When the 2017 Charter was first announced, it caused economic chaos in South Africa; the rand lost 2% of its value and early predictions for the cost to mining stood at R30 billion. Somehow, the outlook has got even bleaker.
Mineral Resources Minister, Mosebenzi Zwane has at least said he will not implement the ownership changes until the interdict application has been heard and ruled upon by the judge.
The proposals keep coming
Meanwhile, Zwane has gazetted a proposal to restrict the granting of new mining and permitting rights as well as the transfer of mineral rights between companies.
In a government gazette, Zwane said that, “having regard to the national interest and the need to promote the sustainable development of the nation’s mineral resources”, he invited interested parties to make representations on his proposal.
“The intended restriction shall not be applicable to applications received and accepted before the date of publication of this notice, subject to the condition that such application, if granted, shall not immediately upon granting subject the right holder to the requirements of the Mining Charter 2017,” Zwane said.