Modelling Impact Of 'Free Carry' On Other Investors' Returns

Hi, I’m from South Africa, and we are expecting new mining legislation that empowers historically disadvantaged groups. We expect the legislation will require x% of ownership (equity) in mining companies to be ‘given’ to local communities i.e. these shares will be allocated to local communities on a ‘free carry’ basis (to my understanding they won’t pay for it). I’m trying to model what effect this will have on other shareholders over time i.e. to what extent do other shareholders bare the costs of this ‘free carry’ allocation, and what impact does this have on these shareholders’ ROI/ROCE? Do you have some tips/suggestions on how I can model this? Thanks so much. P.S. Your suggestions don’t have to be mining related. I imagine the principle would apply universally.

On the first level, it’s clearly an x% tax on all present and future earnings. However, future company returns to existing shareholders are probably going to decrease by less than x%, since there will be an incentive to use more debt than equity financing in the future.