CAPE TOWN (Business Day) -- The South African mining industry was on track to complete the conversion of old- order mineral rights to new-order mineral rights by 2009, Minerals and Energy Director-General Sandile Nogxina said yesterday.
AngloGold Ashanti [NYSE:AU], Harmony Gold [NYSE:HMY] and Aquarius Platinum [AIM:AQP] have converted all, or part of their old order mining rights to new order mining rights.
"These are the first conversions and through these conversions we are laying an administration precedent," Nogxina said.
Gold Fields [NYSE:GFI], Anglo Platinum [JSE:ANANP] and AngloCoal had made applications for conversions from old- to new-order mining rights, Nogxina said.
"The conversion process is going well and I'm convinced that by the time we reach 2009, we would have converted most of the old-order rights into new-order rights," Nogxina said on the sidelines of the Investing in African Mining conference in Cape Town.
"We have reached a point where there is a common understanding about what is required by the companies to comply with the provisions of the act.
"We are now starting to apply a common interpretation of the law and the requirements of the charter," he said.
The Minerals and Petroleum Resources Development Act, which came into effect on May 1 2004, requires that by May 2009 the mining industry be 15% held by empowerment concerns and that by May 2014 it has a 26% ownership by empowerment companies.
The mining charter requires the mining industry to make several changes, including human resource development, increasing the proportion of women employed in the industry to 10%, increasing the number of black people in management positions to 40% and undertaking community development.
The adversarial relationship that had existed between government and the mining industry was now gone, Nogxina said.
The minerals and energy department was planning a mining summit with all the major stakeholders present, he said.
It aimed to identify measures that could spur economic growth in the mining industry as part of the government's Accelerated Shared Growth Initiative.
After two years of implementing the act, the summit could look at improvements that might need to be made to the regulatory environment in the mining industry.
The issuing of new-order prospecting rights was going well.
An area of concern for the minerals and energy department was the sustainability of the empowerment companies formed as a result of the mining charter, he said.
Some empowerment companies existed only up to the point of conversion and after the conversion, the companies disappeared.
Nogxina said this phenomenon was largely a function of the funding of the empowerment companies, which usually bought their stakes in established companies by taking on big debts.
