Loading ...South Africa mines dispute pits inequality against investors
A landmark South African court case that starts on Tuesday will ask a judge to rule whether the need to reduce racial inequality trumps shareholder rights.
The Chamber of Mines of South Africa is asking the High Court to back its view that the Mining Charter stipulates that companies should be credited with disposing of a minimum of 26% of their assets to black investors even if those stakes were later sold. The original charter agreed to by the government and the mining industry took effect in 2004. The Department of Mineral Resources updated it in 2010 to make the minimum requirement permanent.
“It is going to be huge — if the chamber loses, everybody who’s been disempowered will have to be re-empowered,” Andrew Mitchell, a partner at the Johannesburg-based legal firm Fasken Martineau, said by phone. “The shareholders are not going to like it because it means they’ll get rediluted again.”