South Africa mines nationalization talk may cut output
Bloomberg reports South Africa risks cutting the mine output that contributes 8.8% of the economy as calls from within the governing political party for a state takeover of the industry deter investors, Impala Platinum Holdings said.
Mine operators in South Africa are compelled by law to sell 26% of their assets to black investors by 2014 and boost numbers of black managers to help make up for discrimination during apartheid. Some companies had missed targets for 2009, the mines minister said at the time, adding that the industry had “not lived up to the spirit and intent” of the law.
“Investors, the traditional suppliers of risk capital to this industry, are getting cold feet,” David Brown, 48, chief executive officer of Impala, said yesterday in a speech in Johannesburg. “The risk associated with future investment in South African mining has increased considerably as seen from the outside world” because of dangers including nationalization.