Mining Charter: Mining new ways to capture the state?

South Africa's mining sector has been thrown into disarray following the release of the revised mining charter. The charter, which requires mining companies to pay 1% of their turnover to Black Empowerment Partners, has raised concerns among industry players and investors alike. The Chamber of Mines has expressed significant unease about the new regulations, with CEO Roger Baxter highlighting the challenges they present. One of the main points of contention is the fast-tracked transformation targets, which now stand at 30% within 12 months, up from the previous 26% target set in 2002. The lack of recognition for historical transactions and the financial burden placed on mining companies have also raised red flags. Peter Leon, Partner at Herbert Smith Freehills and former chair of the International Bar Association's Mining Law Committee, has criticized the charter for its poor drafting and potential legal issues. He believes the charter's requirements could lead to expropriation and deter much-needed foreign investment in the industry. The Chamber of Mines has taken the Department of Mineral Resources to court, seeking an urgent interdict to halt the implementation of the charter. However, legal proceedings could drag on for years, further unsettling the investment climate in South Africa. The controversial clause allowing naturalized individuals to be classified as previously disadvantaged has also raised eyebrows, with questions being raised about the influence of the Gupta family on mining policy decisions. The uncertain future of the mining sector in light of the revised charter has left many wondering about the long-term implications for South Africa's economy and its attractiveness to investors.