* Black ownership to rise 30 pct from 26 pct
* Chamber says not consulted, to mount court challenge
* Industry body says rules herald uncertainty in sector
(Adds closing prices, analyst, details)
By Tanisha Heiberg and Ed Stoddard
PRETORIA/JOHANNESBURG, June 15 South Africa has
raised the minimum threshold for black ownership of mining
companies to 30 percent from 26 percent, the government said on
Thursday, though an industry body said it would try to block it
and other regulatory changes in court.
Mining firms in the world's top platinum producer have
complained about a lack of consultation over revisions to an
industry charter that sets targets for black ownership and
participation in the powerful sector.
The charter is part of a wider empowerment drive across
Africa's most industrialised economy designed to rectify the
disparities of apartheid that persist more than two decades
since the end of white minority rule in 1994.
The Chamber of Mines, which represents mining firms, said it
would take the government to court over the charter because it
had not been consulted sufficiently and feared the new rules
would create regulatory uncertainty and scare off investors.
Announcing the new rules on Thursday, Mines Minister
Mosebenzi Zwane said companies had 12 months to meet the new 30
The rand fell 2 percent after Zwane announced
details of the revisions. Johannesburg's Mining Index
ended the day more than 3 percent lower, underscoring investor
concerns about the charter and the uncertainties it raises.
"The value destruction is hard to quantify and the
uncertainty will persist. What is certain is that South Africa
continues to be a terrible destination for mining investment and
assets in South Africa will continue to trade at a discount,"
said Ben Davis, an analyst at London-based Liberum Capital.
The government has said in the past that companies must
stick to ownership targets even if black shareholders sell their
stakes but Zwane said it had not yet decided whether mining
firms must maintain the threshold permanently.
The Chamber of Mines said it would also take this issue back
to courts. It argues that a company should only be obliged to
meet its black ownership targets once.
The Mining Charter was introduced in 2002 to increase black
ownership of the mining industry, which accounts for about 7
percent of South Africa's economic output.
Black South Africans make up 80 percent of the 54 million
population, yet most of the economy in terms of ownership of
land and companies remains in the hands of whites, who account
for about 8 percent of the population.
"NOT OUR CHARTER"
Zwane told a news conference in the capital Pretoria that he
had consulted widely with businesses.
"We will engage with business going forward in a respectable
manner. We will never take them to court," he said.
The new charter stipulates that mining firms must pay 1
percent of their annual turnover to the Mining Transformation
and Development Agency, which helps black communities.
Under the new rules, prospecting rights must be 50 percent
black owned and mining rights should be 30 percent black owned.
Mining firms are required to procure 70 percent of goods and 80
percent of services from black-owned companies.
This could prove difficult for many companies, as much of
the expensive and sophisticated equipment used on South Africa's
increasingly mechanised mines is imported from foreign
The new rules also state that half of the members of mining
company boards must be black, and a quarter of the overall board
must be women.
Officials at the Chamber of Mines said they hoped legal
action would force the government back to the negotiating table.
"We will not sign this charter because it is not our
charter," Chamber of Mines CEO Roger Baxter told a news
conference in Johannesburg.
The chamber, which represents companies such as Anglo
American and Sibanye Gold, did not
take part in the launch of the new charter because of what it
said was a lack of prior consultation.
(Additional reporting by Mfuneko Toyana in Johannesburg and
Zandi Shabalala in London; Writing by James Macharia; Editing by
David Clarke and Mark Potter)