Criticism of South Africa's new Mineral Resources Bill: A disaster in the making?
Image: Reuters
Sharp criticisms have emerged over the structure of the new Mineral Resources Bill that was gazetted for public comment last week by Minister of Mineral and Petroleum Resources Gwede Mantashe with the DA on Wednesday saying, "The new minerals bill is a disaster in the making."
This comes hot on the heels of the Minerals Council on Tuesday saying its contributions were not incorporated.
Mantashe and other government officials hope that the Mineral Resources Development Bill and the Critical Minerals and Metals Strategy blueprint will help to shore up mineral exploration, spearhead SA's production of critical minerals and attract international investment into the mining sector.
'The bill is poorly thought out. It is contradictory and unclear in several places. It grants new powers to the Minister to rule the industry according to his own whim,' said James Lorimer, the DA's spokesperson on mining issues. He further said the bill will 'end the already tottering case for foreign investment' in the mining sector.
Among the stipulations that the DA is opposed to is a provision requiring ministerial approval for the change of control of any listed company holding a mining licence. Lorimer also voiced out concerns over a 'vague requirement that certain minerals would have to be made available for local beneficiation' adding that there was no clarity over 'who would do the beneficiation or at what price' mines would have to make the minerals available.
Mzila Mthenjane, the CEO of the Minerals Council, said the published bill 'does not reflect inputs' from the grouping of SA's mining sector players.
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'The draft bill is not altogether optimal,' said Mthenjane, adding that an industry preference seeking that the legislation 'specifically exclude prospecting companies from empowerment' had not been included.
'Exploration is the highest risk part of the mineral value chain and imposes an unnecessary burden on prospectors who must sink every rand into drilling and data interpretation. Yet in this draft bill, none of that is included,' he explained.
Lili Nupen, a mining policy expert who founded Johannesburg-based NSDV, told Business Report though that the bill's effectiveness will be hinged on how it is implemented.
'NSDV Law is of the view that the South African mining industry stands to benefit from the implementation of the Mineral Resources Development Bill and the Critical Minerals Strategy, if they are executed effectively and supported by consistent policy implementation,' said Nupen.
She added that the Mineral Resources Bill was supposed to be representative of the South African government's recognition of investor concerns and, therefore, should be a mechanism of reforming the legal framework that governs the mining sector to address concerns.
'For example, the alignment of the mining and environmental regulatory timeframes and processes, as well as their acceleration, is directly aimed at addressing current concerns regarding the backlog of the processing and authorisation of mining projects. Similarly, the Critical Minerals Strategy provides much-needed clarity on South Africa's mineral priorities, which could guide investment decisions and support coordinated development efforts.'
South Africa, a major mining hub in the region, has identified platinum, manganese, iron ore, coal, and chrome ore as 'high-critical minerals' under the new Critical Minerals and Metals Strategy.
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