The government’s recently gazetted Mineral Resource Development Bill is turning out to be another point of contention between members of SA’s government of national unity as the DA rejects the draft bill.
In a statement on Wednesday, DA spokesperson James Lorimer said the bill was “almost wholly bad” and should be “jettisoned in its entirety”.
“It is possible that this is a replay of previous mining law where the ANC introduces unacceptable bills to condition the industry to accept a partial climbdown,” said Lorimer.
He argued that the proposed amendments would perpetuate regulatory uncertainty while scaring away foreign investment by reintroducing black empowerment mandates and granting excessive control to mineral & petroleum resources minister Gwede Mantashe.
“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,” he said.
The new framework proposes several policy interventions which Lorimer warned may worsen wait times and create more red tape, such as making a change of control of a listed company with a mining licence subject to ministerial approval.
The mining industry is too important to SA to be left in the hands of a minister whose serial mistakes are now crowned by one that would throw away the one industry that could power SA out of poverty.
— James Lorimer, DA spokesperson
It also required certain minerals to be “made available” for local beneficiation as part of the drive to capitalise on SA’s vast critical mineral reserves but failed to provide any clarity on how this would be implemented in practice.
Another key concern was the reintroduction of BEE requirements for prospecting companies, which “members of the mining industry say will end almost all mining exploration”, said Lorimer.
The Minerals Council SA warned against the proposal earlier this week, pointing out it ignored the council’s input and contradicted Mantashe’s many public comments on the matter.
The council said it had repeatedly urged the department of mineral & petroleum resources to exclude prospecting companies from empowerment requirements, which would impose an unnecessary burden on potential investors.
“Yet in this draft bill, none of that is included,” said Minerals Council CEO Mzila Mthenjane.
According to Lorimer, the draft bill would “effectively end the already tottering case for foreign investment in SA mining”.
Stats SA’s latest GDP data shows that capital expenditure in SA mining has plunged in recent years, with the Minerals Council calling last year’s fixed investment data a “horror show”.
The draft Mineral Resource Development Bill is an important step in reworking the local mining sector’s regulatory environment to be more attractive to foreign investors.
By eliminating regulatory uncertainty, particularly on prospecting rights, it was hoped that this reworked mineral law regime would promote exploration while the industry is struggling to attract investment.
In his scathing overview of the proposed amendments, Lorimer said the minister “has made a case for his own retirement”.
“The mining industry is too important to SA to be left in the hands of a minister whose serial mistakes are now crowned by one that would throw away the one industry that could power SA out of poverty.
“Judging by the mood of the mining industry in reaction to this bill, there will be no shortage of people who will challenge it in court,” he said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.