South Africa approves law that gives state a 20% of oil, mining firms
South Africa’s controversial Mineral and Petroleum Resources Development Amendment Bill became a law Tuesday, after the parliament voted in favour of the amendments, which include giving the state a stake of 20% in new gas and oil exploration and production ventures.
The new law also lets the state to acquire an unspecified additional share at an “agreed price,” giving the mines minister the right to dictate which minerals are strategic for South Africa and so force producers to process a portion of their output domestically instead of exported in raw form.
The ruling, reports Reuters, still needs to be signed into law by President Jacob Zuma before it actually becomes effective.
Mining and oil companies have warned the approved changes will discourage investment in the country as it violates international treaties. They have also say the new law would give the mines minister too much regulatory discretion, disregarding the constitutional provisions on property rights.
South Africa is the continent’s largest coal and gold producer and the world’s biggest supplier of platinum and chrome.