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Vol 56 No 6

Published 20th March 2015

South Africa

BEE worsens mining outlook

The mineral sector is already weak but intricate deals for ANC favourites are also sapping foreign enthusiasm for investment

Black Economic Empowerment (BEE) mining deals are becoming more lavish and opaque, skirting the law and enriching insiders, industry observers say. The arrangements also carry reputational risks for international mining companies and that is taking its toll on confidence. Investors see the willingness of the governing African National Congress to intervene in the market, and the increasing cost and volatility of labour, as further risks. The net result is that many are deferring investment or quietly leaving the country.

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