South Africa’s Chamber of Mines has decided to take the government to court over its decision to raise the threshold for black ownership. Its President Mxolisi Mgojo says the chamber, which represents 90 per cent of the industry in the country, needs to “protect the mining industry and take all critical steps” to do so.

“We are taking the matter to court to try and bring the industry and the Department of Mineral Resources back to the negotiation table,” said Mgojo.

The Mining Charter, which applies with immediate effect, was released on Thursday without consultation and many of its aspects have not been seen by the Chamber of Mines,. It was only given a copy of the charter after it was released.

Roger Baxter, Chamber of Mines CEO, says it will not be signing the charter as “it is not its charter”.

Mining shares were trashed on the JSE following the release of the charter. Baxter warned that this charter is going to scare investment. It will have a significant impact on the sector, he added.

The charter raised the minimum threshold for black ownership of mining companies to 30 per cent from 26 per cent but has not decided if firms must retain that structure permanently, Mines Minister Mosebenzi Zwane said. The charter also requires mining companies to pay 1 per cent of turnover to their black empowerment partners.

Zwane said companies had 12 months to meet the new 30 percent target. 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.

The Chamber of Mines, an industry body, has taken the government to court over the interpretation of the ownership rules, which it put on hold in good faith. The government has said companies must keep to black ownership targets even if black shareholders sell their stakes. The chamber will not again approach the courts to reopen the matter.

Uncertainty about the government policy remained, however, as Zwane said “we have not dealt with that” issue.

The Chamber of Mines, which represents companies such as Anglo American and Sibanye Gold, did not take part in the launch because of what it said was a lack of consultation in drawing up the charter.

(Additional Reporting by Tanisha Heiberg; writing by Ed Stoddard; editing by James Macharia and David Clarke)

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