South African Miners Apply to Block Minister’s Rights Freeze

JOHANNESBURG (Capital Markets in Africa) – South Africa’s Chamber of Mines, which represents the industry, made a court application to block a proposal by the mines minister to freeze granting and renewing mining rights, intensifying a legal clash between the two sides.

The lobby group applied to the Pretoria High Court “to review and set aside the notice and to interdict the minister from taking any decision or issuing any directive contemplated in the notice,” it said in a statement Tuesday.

The legal battle began after Mines Minister Mosebenzi Zwane last month published a new Mining Charter, which would require mining assets in South Africa to be 30 percent black-owned, up from 26 percent. Moreover previous deals from which black investors have since sold out are not given full credit, raising concerns about dilution for existing shareholders. The chamber moved to block the charter in a case due to be heard in September.

Zwane has said a rights freeze proposed last week is necessary to ensure that no rights are approved without being subject to the new charter regulations, which he has agreed to suspend pending an initial court judgment. The public has until Aug. 4 to respond to the moratorium notice.

“The minister has not yet received the interdict referred to,” Ayanda Shezi, a spokeswoman for the department of mineral resources, said in an email. “A response will be provided once the minister has received” it, she said.

The lobby group said it has been advised that the separate moratorium notice is unlawful because it would damage the mining sector and exceeds the minister’s powers. The urgent application to set the notice aside will be heard on the deadline for public comment.

Source: Bloomberg Business News


Leave a Comment