South Africa Withdraws Plan for Moratorium on Mining Rights

(Bloomberg) -- South Africa's Department of Minerals backed down on plans to freeze the granting and renewing of mining rights and will explore other measures to ensure companies are compliant with new industry rules.

The decision, announced after 9 p.m. on Thursday on the department's Twitter account, came before a High Court hearing Friday in which the main industry lobby group sought a court order blocking Minister Mosebenzi Zwane's July notice about the planned moratorium.

Friday's court application has been postponed indefinitely after Zwane agreed not to pursue the moratorium, but the minister was criticized by Judge Ramarumo Monama for failing to file a responding affidavit and ordered him to explain his actions in the matter.

Zwane's conduct “is blemishing the brand” of the country at a time when thousands of jobs are being lost in mining, a crucial sector in the economy, he said. The judge also criticized the department's late-night communication of policy on Twitter, which he likened to postings by U.S. President Donald Trump.

The legal battle began after Zwane in June published a new Mining Charter, which requires more black ownership of assets and imposes a series of extra levies on the industry. Zwane had originally said the proposed license freeze, announced last month, was necessary to ensure that no rights are approved without being subject to the new charter regulations, which he agreed to suspend pending an initial court judgment after the industry moved to challenge them.

The public had until Friday to respond to the moratorium notice. Views submitted to the department about the potential impact of the freeze, particularly from junior miners, suggested that alternative means must be explored to ensure companies are compliant with the industry charter, the department said its Twitter posts Thursday.

“Based on the reasoned submissions made, the department will not pursue the moratorium,” it said.

An agreement on the moratorium between Zwane and the Chamber of Mines has been made an order of the court, Chamber chief negotiator Elize Strydom said in an interview after Friday's proceedings. Zwane has yet to file a responding affidavit in the Mining Charter case, which is due to be heard next month, she said.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net.

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill, Paul Richardson