Mining Charter sees bloodbath resume on JSE

Cape Town – The bloodbath resumed on the JSE following Mineral Resources Minister Mosebenzi Zwane's announcement of stringent new laws in the mining sector on Thursday.

The mining firms lost over R50bn in market value last week, following the announcement of the Mining Charter, which was gazetted without any input from the Chamber of Mines, which represents 90% of South Africa’s mining firms.

READ: Markets bloodbath as Zwane shocks mining sector

With the JSE closed on Friday due to the public holiday, the markets were in limbo while opposition to the gazetted Mining Charter grew.

However, the 09:00 opening bell saw the mining sector rout continue. Shares dropped on most mining companies: Harmony Gold [JSE:HAR] lost 7.76%, Sibanye [JSE:SGL] lost 5.7%, AngloGold Ashanti [JSE:ANG] lost 5.9%, Gold Fields [JSE:GFI] lost 4.33% and Impala Platinum [JSE:IMP] lost 3.67% by 10:00. This caused the JSE Gold Mining Index to drop 4.57% by 10:30.

The rand also dropped quickly as the JSE opened for business, but by 10:30 it had returned to its previous position of R12.80 to the dollar.

RMB analyst John Cairns said the release of the Mining Charter will put a stop to rand gains. "Mining stocks shed up to 10% last week and USD/ZAR lost 2% in response," he said on Monday in a note to investors.

"The strong dollar, combined with continued media headlines related to the Mining Charter, makes us believe the rand is biased for weakness."

READ: JSE bruised as mining stocks hit by new charter

The Mining Charter will force mining firms to restructure their ownership to ensure they have 30% black ownership within 12 months. It will also require a 51% black shareholding in all new prospecting licences.

The Chamber of Mines said it will serve an interdict on the minerals department to force it to immediately suspend the implementation of the charter. It will also take the charter on review.

The ANC’s economic transformation committee also raised a number of concerns about the new charter, specifically about the impact the raised level of black ownership to 30% could have on jobs in the sector. It has called Zwane to an urgent meeting.

One veteran black mining executive told City Press that the department of mineral resources may have wilfully plunged itself into months, or possibly years, of lawfare “because by doing so, they think they will be seen to be doing radical economic transformation”.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders