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Reuters (File photo) / Mosebenzi Zwane, South Africa's Minister of Mineral Resources, speaks at the Investing in African Mining Indaba in Cape Town, South Africa, February 8, 2016.
South Africa intends to suspend the granting of applications for prospecting and mining rights as well as any renewals pending a court case to review new mining laws, the Mineral Resources Minister Mosebenzi Zwane said on Thursday.
Such a move could seriously hamper growth and investment in South Africa’s mining sector, already beset by policy uncertainty, depressed prices, soaring costs and often social and labour strife.
“The moratorium would ensure that any applications … are concluded in terms of the 2017 Mining Charter,” Zwane said in a statement.
The Chamber of Mines applied to the high court to prevent implementation of the mining charter, which includes raising the level of shares blacks should own in mining firms.
A spokeswoman for the Chamber of Mines, which has complained that mining companies were not properly consulted about the revisions to the charter, said it would respond to Zwane’s comments later in the day.
The Mining Charter was introduced in 2002 to increase black ownership in the mining industry, which accounts for about 7 percent of South Africa’s economic output.
Mining shares fell to more than one-year lows after Zwane released the revised mining charter in June, giving resource firms 12 months to meet a new 30 percent minimum for black ownership, up from 26 percent.
Mining companies in the world’s top platinum producer are also concerned by other rules in the new charter, including a requirement that they procure 70 percent of goods and 80 percent of services from black-owned companies.Source: Reuters