DRDGold, the 122-year-old South African gold producer, will no longer apply for mining licences because of Mining Charter III, CEO Niel Pretorius said Tuesday, calling it "a shambles."
"We will not be applying for mining licences in this country any more because of the new mining rules. We do have mining licences to last us for 10 to 15 years, but there won't be any more applications," Pretorius said.
In Mining Charter III, unveiled June 15, the South African government is seeking a range of new measures including: 50% black membership in the boardroom; up to 1% of turnover to be paid in dividends to the 30% black shareholding, before other shareholders are paid; 70% black ownership for suppliers, when it comes to procurement, and 50% plus one share for the securing of prospecting rights.
The charter is backed by amendments to the Minerals Petroleum and Development Act 2002.
"Very little in this document is right, it is a shambles...I don't think it can be executed," Pretorius said.
DRDGold, listed on both the New York Stock Exchange and Johannesburg Stock Exchange, pulled out of deep level mining in 2012 with the sale of its Blyvoor operation.
It produces more than 140,000 oz of gold/year from its Ergo tailings operation at Brakpan, east of Johannesburg, for which it has mining rights.
DRDGold believes that the 70% black ownership requirement may be against GATT international trade rules.
The Chamber of Mines plans to challenge Mining Charter III in the North Gauteng High Court in July in a bid to obtain an interdict before getting the amendments to the mining codes set aside.
Martin Madlala, the spokesman for the Department of Mineral Resources, was unavailable for comment.
