Johannesburg, South Africa — MININGREVIEW.COM — 28 January 2010 – Gold Fields Limited “’ Africa’s second- biggest producer of the metal “’ says any changes to South African mining law to encourage black investor participation should be “sustainable” to avoid damaging the country’s industry.
“I hope that sanity prevails,” Gold Fields CEO Nick Holland said in an interview with Bloomberg News at the company headquarters here. “Don’t kill the goose that laid the golden egg,” he added.
The government, mining companies and labour unions will review South African legislation at a meeting in March. Minister of mineral resources Susan Shabangu is on record as saying that the industry has missed targets to increase black investment.
Bloomberg reports that shares of companies that mine in South Africa plunged in 2002 when laws compelling them to sell assets to black owners were first reported. The ruling African National Congress party passed legislation in 2004 compelling miners to sell 15% of their assets to black investors by 2009 and 26% by 2014. The measures are aimed at compensating for discrimination against blacks during apartheid, which ended in 1994.
“Are we in for an unpleasant surprise that’s going to cause another wave of investor fatigue and investor retreat?” Holland asked. “That’s the risk.”
Department of Mineral Resources spokesman Jeremy Michaels declined to comment.
“The real concern in the industry is whether the goalposts are going to be moved,” said chairman of the Mining Law Committee of the International Bar Association Peter Leon in a telephone interview from Cape Town. “It’s up to government to allay those concerns as best they can,” he told Bloomberg.
“If new measures are introduced following the March meeting, the government has to be ‘realistic and reasonable’ on how long it will take to implement them,” Holland said. “Measures put in place over a short period would be a recipe for disaster,” he insisted.