The main focus of Thursday was the Mining Charter, which weighed on resources and our market in general. The All Share Index was down 1.3%. It was a huge day on the market thanks to Derivatives Close-Out; $5.4bn (R69.5bn) traded. Naspers released a trading statement, core headline earnings per share will be up between 33-39%. Peregrine released results (we have a small allocation to the share in the Aggressive portfolio). Comair – which we put on as a trading idea last week – also released their trading statement, HEPS will be up at least 20%. Global markets closed in the green on Friday, so hopefully we’ll play catch up.
Basics of the Mining Charter:
Ownership Levels:
– 30% of mines must be black-owned within 12 months of the 2017 charter.
– a new mining right must have 30% black ownership.
– new prospecting rights must be 50% black-owned.
– 8% shareholding to mine communities / workers.
– separation of workers’ shareholding from entrepreneurs.
Minimum Employment Representation Levels:
– 50% of executive/top management level must be black.
– 50% of the board must be black, 25% of which must be black females.
– 60% of senior management must be black.
– 75% of middle management must be black, 38% of which must be black females.
– 88% of junior management must be black, 44% of which must be black females.
Procurement:
– all analysis of mineral samples must be done by SA-based companies.
– procurement of mining goods and 80% of services from BEE entities.
Other:
– 1% of turnover must be used for local communities.
– 5% of the leviable amount must be invested in essential skills development.
– the charter is now applicable to the Diamonds Act and the Precious Metals Act.