The new mining charter, announced by mining minister Mosebenzi Zwane on Thursday, has resulted in backlash from stakeholders, including unions and investors, Business Day reported on Monday.
The mining sector is now being called "uninvestable".
The charter includes requirements for companies to increase empowerment ownership to 30% within 12 months.
According to Business Day, Investec, in a note to its clients, said the charter made "South African miners uninvestable to a large segment of the market and it will be very tough to attract fresh capital to an already unloved sector."
Nicola Jackson from Fasken Martineau told Business Day: "It is highly arguable that this new top-up provision is constitutional as it attempts to impose retrospective obligations on already existing mining right holders."
JP Morgan Cazenove reportedly said: "We believe a protracted and antagonistic time line is likely, which we expect will be negative to SA risk premia and corporate and institutional investment in SA's mining sector."
According to Business Day, the Chamber of Mines is going to court in an attempt to stop the charter from being implemented. It reportedly reacted with "fury" to the charter, saying none of its submissions were included in the document. The Chamber reportedly wants to interdict the implementation of the charter until a judicial review of the document is launched.
The chamber is prepared to take the matter to the Constitutional Court, its president, Mxolisi Mgojo told Business Day.
The National Union of Mineworkers broadly welcomed the charter, but lamented that it did not increase economic benefits for mineworkers and communities.
"We do nonetheless appreciate the increase from the initial 26percent to the 30percent minimum BEE shareholding in the industry," NUM said.
NUM said it was however disappointed that Mineral Resources Minister Mosebenzi Zwane had not increased economic benefits for mineworkers and mining communities to 10percent.
According to IOL, the union said: "Unfortunately and to our disappointment on this aspect the minister (has) limited employees' and communities' ownership to 8percent each on the designated 30percent BEE ownership in mining companies, thus BEE entrepreneurs and current institutional owners remain with 84percent (with a minimum of 14percent in the hands of black entrepreneurs)."
The ANC has requested an urgent meeting with Zwane, News24 reported.
ANC spokesperson Zizi Kodwa reportedly said: "We wanted the Minister to report back on these and clarify the points raised. The ANC is very concerned about the impact legislation could have in terms of employment, given that the mining sector lost 60,000 jobs over the last five years. So, if there's 30% black ownership it mustn't lead to a jobs bloodbath."Suggest a correction