South Africa has recently declared a ground-breaking new mining code so as to force companies for the sake of offering 30% ownership prize for black partners. This is mainly to activate drop in terms of mining stocks as well as to offer the instant threat of lawful action against that industry. Moreover, Canadian companies like Ivanhoe Mines Ltd are leaders in developing the largest platinum mines in the country of SA. This company is one among those which is hypothetically affected through new ownership rules.
This least black ownership seems to augment from 26% to 30% for all mine owners through this new code. Through this scheme majority of the companies will be black-owners especially if they wish for prospecting license as well. Moreover, the mining industries have to provide 1 per cent share in their annual income to the black shareholders prior to paying bonuses to other shareholders. Furthermore, this new type of code will provide a good effect in twelve months’ time.
Mosebenzi Zwane who is a mining minister of South Africa is known famously as a revolutionary tool as well as a primary tool for radical change so as to solve inequalities in the sector of mining as well as offer enormous advantages to the people of South Africa. “Chamber of Mines” which is well-renowned as top-most industry group says that the new codes on mining industries seem to be destructive and unworkable. There will be some court process included against this new code. There is also a complaint that there is no discussion taking place with the government prior to the announcement.
The shares of many topmost mining companies decrease exactly on the stock exchange of Johannesburg next to the announcement made on Thursday but some will be recovered later as well. The economic wealth of South Africa has been fallen into formal recession and it is also feared that whether new mining code will further create damages to the investment made. The new mining code seems to be declared during the time of ruling party of South Africa (African National Congress) seems to fight with declining popularity and corruption scandals. It has been answered with the campaign and democratic gestures against white monopoly capital. Moreover, the economy also controlled largely by the white-owned businesses, irrespective that end of apartheid takes place in the year 1994.
Many of the critics declare that the new rules are envisioned to confuse South African from sleaze scandals thereby employing the business sector as accused. The mining charter proposed by the ANC government that they wish to create insiders and cronies richer as a result they opened up wonderful chances to receive mining deals. He also declares that these rules would be considered as a disaster for the industry of mining and hence offers a tremendous giveaway for the mine values. The mining code must necessitate about 50 percent of the board members in addition to the top managers has to be black. Furthermore, there should be at least 25 percent of them must be women. And hence, 80% of mining services and 70% of mining procurement must be directed towards the black-owned companies as well.