South Africa's latest Mining Charter is better than the previous document but is still "profoundly flawed" and a continuing choke on investment, the Institute of Race Relations (IRR) said on Friday.
The government last week gazetted the draft charter after abandoning implementation of one last year aimed at transforming the sector to encourage participation of non-whites, but which mining companies said would be damaging overall.
"Though the draft is better than its predecessor, it still falls far short of the regulatory framework required for a thriving mining sector capable of boosting economic growth and job creation," the IRR said on Friday.
Minerals Council South Africa, which represents mining firms and was previously known as the Chamber of Mines, has said it does not favour a requirement of 10% 'free carry' on new mining rights as part of the proposed 30% black economic empowerment ownership target, as it would render a significant proportion of potential new projects uneconomic.
Unlike the previous draft, the new charter, which is open for public comment for 30 days, scraps a 51% ownership requirement for new prospecting rights and slightly reduces earlier procurement and employment equity quotas.
It also scraps the 100% compliance requirement for skills development and mine community upliftment.
“However, the draft charter still greatly increases the regulatory burden on mining companies in South Africa," IRR head of policy research Dr Anthea Jeffery said.
"Its adoption of a 30% ownership target contradicts all the assurances earlier provided by the department of mineral resources that the (previous) 26% target was immutable and would not later be changed."