Cape Town - South Africa's government wants the black economic empowerment legal battle settled outside the courts, the mining minister said on Monday, to end uncertainty over a policy meant to spread economic wealth to the black majority.
Empowerment goals set by the mining charter a more than a decade ago to redress the absence of South Africans excluded from the mining industry, required that black partners own 26 percent of companies by 2014.
Data from South Africa's Department of Mineral Resources, published in May, showed that the mining industry had failed to meet those targets. This was challenged by the Chamber of Mines, which took the government to court.
“We believe that they will withdraw and give the process a chance to unfold out of court,” Mosebenzi Zwane, the Minister of Mineral Resources, told a media briefing.
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Regulatory uncertainty is a key concern for miners in Africa's most industrialised but struggling economy, which has been hard hit by job cuts due to weakening global commodities prices for its platinum, gold, iron ore and coal exports.
The government wants to enforce a requirement that 26 percent of all mining companies be in black hands by 2014.
The state disqualified any transactions where black owners had sold out their shares in the companies, taking down the average empowerment level to 20 percent.
The Chamber of Mines however argues that once a company has sold 26 percent of its stake it had already met the empowerment principle even if shareholders subsequently sold of their stake.
“We have taken a stance as government, that working together with the primary right holders, let's deal with this matter out of court. It is in the interest of all parties,” Zwane said.
The Chamber of Mines said it preferred to reach a “negotiated settlement”, but for now the court case was continuing.
“The application has not and will not be withdrawn until we reach a negotiated settlement,” Charmane Russell, a spokeswoman for the chamber told Reuters.
REUTERS