Mining Sector |

Years of Gridlock Face South Africa as Rules Paralyze Mining

JOHANNESBURG (Capital Markets in Africa) – Executives from Sibanye Gold Ltd., South Africa’s biggest gold miner, were in Los Angeles in the final stages of a roadshow with U.S. bond fund managers last month when a bombshell hit from back home. The government had introduced shock new rules requiring local mines to be 30 percent black-owned in perpetuity, toughening existing requirements and implying hefty dilution for shareholders. South African stocks tumbled and bond yields rose that day. The…

Kenya Reviews Mining Laws as Industry Struggles to Grow

Posted on by The Editorial Team

NAIROBI (Capital Markets in Africa) – Kenya is reviewing its mining code, a year after enacting new legislation, as it seeks to attract investment into an industry that’s barely grown over the past five years. The government is working with the U.K. Department for International Development-funded Extractives Hub to come up with a revised law that balances investor returns with government-revenue needs and international best practice, Mines Secretary Dan Kazungu said. The review is expected to be…

South African Miners Apply to Court to Block Government Charter

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JOHANNESBURGH (Capital Markets in Africa) – Johannesburg South Africa’s mining companies have applied to the High Court in Pretoria to block the government’s Mining Charter, arguing that the new rules would destroy the industry. The Chamber of Mines, which represents mining companies, has applied for an urgent interdict that would halt the implementation of the charter, published by the Department of Mineral Resources on June 15, it said in an emailed statement Monday. The group plans…

Banks Balk at Risk of Funding South Africa Mining Charter Deals

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JOHANNESBURGH (Capital Markets in Africa) – South Africa’s plan to force mining companies to give the black majority a bigger stake in the nation’s mineral wealth faces a major obstacle: convincing banks to back billions of dollars of fresh deals in an industry in decline. Mineral Resources Minister Mosebenzi Zwane said on June 15 that local mines should be at least 30 percent owned by black people, up from the previous requirement of 26 percent. The mining companies need banks to…

Miners Frozen Out as South Africa Readies Empowerment Rules

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JOHANNESBURG (Capital Markets in Africa) – Mining companies in South Africa have been frozen out of consultation over regulatory changes that could dilute shareholders, raise costs and impose new levies to fund community development. South Africa’s Cabinet last week approved a new draft of the country’s Mining Charter and Mining Minister Mosebenzi Zwane has promised it will be gazetted within weeks. Yet while labor leaders have been consulted on the long-delayed new rules, the Chamber of Mines,…

South Africa Miners Seek Policy Clarity to Boost Spending

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JOHANNESBURG (Capital Markets in Africa) – South Africa needs to finalize its long-delayed mining regulations if falling investment in the sector is to be reversed, according to the Chamber of Mines, which represents producers. Fixed investment in mining dropped in each of the past two years after growing at an average annual rate of 12 percent from 2001 to 2008 and 2 percent from 2009 to 2014, Chamber Chief Executive Officer Roger Baxter told reporters in Johannesburg on…

Impala Platinum Plunges on $400 Million Bond Refinance

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JOHANNESBURG (Capital Markets in Africa) – Impala Platinum Holdings Ltd., the world’s second-largest producer of the precious metal, plunged in Johannesburg trading after saying it will refinance about $400 million of convertible bonds, which could dilute existing shareholders. The existing bonds had an equity conversion price more than four times higher than yesterday’s closing price of 41.46 rand a share. The new bonds will convert to equity at a much lower level of 30 to…

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