Global mining stocks found themselves in a hole Thursday, June 15, after South Africa's government said that at least 30% of domestic mining assets should be black-owned even if previous black owners sell their stakes.
South African-exposed mining companies fell sharply in the wake of the announcement. London-listed Anglo American plc (AAUKF) tumbled 4.4% to 1,013 pence ($23.87) a share, South32 Ltd fell 4% to 158 pence, BHP Billiton plc (BHP) was down 2% to 1,155 pence, Rio Tinto (RIO) fell 2% to 3,079 pence and Glencore plc (GLNCY) fell 2.6% to 279.2 pence.
Mines Minister Mosebenzi Zwane announced the changes on Thursday as part of a new mining charter, that seeks to funnel more of the nation's mineral wealth back to black communities. The new regulations will also reserve 1% of mine turnover for local community investment. A draft version of the charter, released in April, had proposed that 26% of domestic mining assets be owned by black investors, black employees or black community groups.
South Africa's black-ownership laws aim to improve the economic situation of its majority-black population by redressing imbalances in ownership that have their roots in the country's apartheid past. The government "is not blind to (the) current economic climate," Zwane told reporters at a press conference on Thursday to announce the new rules.