South Africa’s government and the mining industry are at loggerheads over rules about black ownership and investment in the sector.
It is claimed miners are too slow to meet rules that at least 26% of company shares should be under black ownership.
But the Chamber of Mines told the BBC the confusion was due to the government using a different measurement system.
The government revealed this week that only about 20% of firms met its black economic empowerment rules.
The mining industry had been given a decade – until 2014 – to increase the shareholdings of black investors to at least 26%.
On Thursday, Mines Minister Ngoako Ramatlhodi said that only a fifth of companies, based on the number of workers, had finalised the transfer of ownership.
Several firms failed to meet “the full requirements of meaningful economic participation,” he was reported as saying.
But, speaking to the BBC, Roger Baxter, the chief executive of the Chamber of Mines, the body that represents most of the industry, defended the sector’s efforts to meet the rules.
“Our view is that the industry is way beyond the ownership required by the charter,” he said.
If mining companies fail to meet the targets of having more black ownership the government can revoke their licences, so this is an issue that the industry could do without at a time when it is facing several challenges.
“It is indeed a challenging time for the industry, said Mr Baxter. “Obviously commodity prices have been weaker than they’ve been for some time, and we’ve had some domestic cost pressures feeding through.”
Shares in mining companies have been battered as the markets have reacted to falling prices of commodities such as platinum or iron ore, so this could be a good time for black investors to acquire stakes in the sector.
“This is a very good time for local investors to buy into the industry, when valuations are very low,” said John Meyer, a mining analyst at SP Angel, told the BBC World Service.
However, Mr Meyer also believes cheaper share values might actually deter investors, making it harder for mining companies to sell a stake to black people.
“Because mining companies are making less money than they were, it may be that indigenous investors have been more cautious, which would make it more difficult for mining companies to pull in more investors,” he said.
Africa continues to attract billions of dollars of foreign investment, but industries other than mining look more attractive to fund managers around the world.
“They’d rather invest in media and telecoms and this is a very difficult time in the cycle for mining investment,
” said SP Angel’s John Meyer, recognising the tremendous growth of the mobile phone industry across the continent.
Technology, media and telecoms are topping the charts for investment in Africa, but the banking industry also has a healthy future, according to Jalloul Ayed, a former finance minister in Tunisia.
“When I see what is happening today in the financial sector and the development of many African banks, from South Africa, Nigeria, Morocco and Tunisia, expanding their branch networks and their access platforms into Africa, I think that really bodes well,” he said.
In theory, it should be easy to calculate if a mining company had met the black economic empowerment rules.
However, confusion arises when rival parties ask if it should be calculated by taking the size of the workforce into account, or raise complex exceptions such as shares initially ceded to black investors, but then sold to other stakeholders.
The dispute between the government and the mining industry about which method to use when calculating share ownership is going to be decided by a court.
“The legal teams of the government and the industry, the Chamber, are still meeting and are still engaging on how the court process will unfold,” said Mr Baxter.
“I suppose it does show some degree of maturity on behalf of the stakeholders, other than yesterday, when we agreed on a joint process,” he added.