Minerals law opposed by Exxon, BHP adopted in South Africa

|About: Exxon Mobil Corporation (XOM)|By:, SA News Editor

South Africa’s ruling African National Congress has used its parliamentary majority to push through changes to minerals laws that companies such as Exxon Mobil (XOM) and BHP Billiton (BHP) say will hurt investment.

The new law will secure for the state a free 20% stake in all new energy ventures and enable it to buy an unspecified additional share at an "agreed price,” and it enable the mines minister to declare some minerals strategic and force companies processing them to sell some output to local manufacturers.

Rules for energy companies were made more onerous after lawmakers scrapped a 50% cap on the size of the stake the state may demand in new projects, which would have “a chilling effect" on investment, according to a trade association whose members include XOM, BHP, Anadarko (APC) and Total (TOT).