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New charter could cause foreign capital flight - mines analyst

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Cape Town - The new mining charter could lead to the exit of foreign investors in the industry, lower dividend payments and further unemployment, according to Hurbey Geldenhuys, a mining analyst at Vunani Securities.

The new charter may negatively impact the economy on a number of fronts, he explained.

Mineral Resources Minister Mosebenzi Zwane announced a new stringent law that will force mining firms to restructure their ownership to ensure they have 30% black ownership within 12 months.
 
"The new ownership requirements will result in potential dilution of existing shareholders, which may prompt them to exit their investments. This will negatively impact the current account if those investors were foreign," cautioned Geldenhuys.

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