ZIYANDA NTSHONA & ERNST MULLER | Partnership and legal certainty must be the foundations of mining reform

Mining in South Africa operates within a contested ecosystem where companies, the government and communities face overlapping challenges. Rising capital costs, extended timelines and ESG scrutiny weigh on companies. The government struggles with regulatory capacity, service delivery and spatial inequality. Communities bear direct impacts without sustained economic participation or trust in institutions. These tensions converge at the regulatory level, where ambiguity and fragmentation deter investment and development.

South Africa’s mineral wealth positions it as a strategic supplier to global value chains, particularly for the energy transition. Yet despite this endowment, the country underperforms as an investment destination. The 2026 Mining Indaba theme, “Stronger Together: Progress Through Partnerships”, underscores the need for deliberate legal and policy frameworks that enable credible partnerships between industry, the government and communities. Certainty, accountability and trust are prerequisites for a durable social licence to operate. Without clear frameworks, resistance grows, approvals stall and disputes migrate to courts, raising investor risk and reducing appetite for long-term capital.

The government’s role in this partnership is pivotal. When the state lacks coherence, mining companies are expected to fill the gap — an unsustainable outcome. The Mining Charter and the Mineral & Petroleum Resources Development Act (MPRDA) were designed to balance transformation with investment promotion, but persistent uncertainty around ownership, community participation and rights durability has undermined confidence. Reform must go beyond adjusting percentages or definitions, it must rethink how partnership is legally structured and sustained.

An effective public–private relationship requires a clear regulatory framework. Regulatory certainty is not a concession to industry but a prerequisite for responsible mining, long-term investment and shared value creation. Coherent, fair and predictable processes from beginning to end allow the sector to operate sustainably while driving growth. Without this, capital hesitates — with it, partnerships flourish.

Reform must go beyond adjusting percentages or definitions, it must rethink how partnership is legally structured and sustained.

Following the publication of the draft Mineral Resources Development Bill last year and a protracted public participation process, industry is anxiously waiting for the revised bill.

The much-needed reform of the MPRDA offers the government a unique opportunity to reset the regulatory environment by addressing concerns within the act’s framework. From an outsider’s perspective, the government appears to have been receptive to commentary on the bill. By incorporating industry submissions and addressing investment considerations, the government can strengthen trust, unlock capital and create a framework that promotes growth while ensuring mining is inclusive, responsible and responsive to community needs.

Streamlining application processes, removing uncertainty surrounding the transfer of prospecting and mining rights and clearly defining community rights are key examples of reforms where the government can achieve quick wins. This is how a government becomes a true catalyst for partnership, creating a foundation from which all stakeholders can work together to develop a thriving mining sector.

A central fault line lies in the treatment of communities. Policy often assumes communities are coherent entities capable of collective governance. In reality, they are internally differentiated, with contested leadership structures overlapping municipal authority, land claimant bodies and informal groupings. Authority and legitimacy are frequently disputed, creating material legal risk for companies. Agreements with unrepresentative structures entrench factionalism, destabilise projects and invite litigation.

Authority and legitimacy are frequently disputed, creating material legal risk for companies. Agreements with unrepresentative structures entrench factionalism, destabilise projects and invite litigation

This ambiguity directly affects Mining Charter reform. Ownership has long been positioned as the primary empowerment mechanism, yet traditional equity participation often fails to deliver social stability or sustainable development. The challenge is not to abandon community participation but to recalibrate how it is achieved. Legal frameworks must move beyond one-size-fits-all ownership models and allow differentiated, context-sensitive structures. Community trusts, non-profit companies, private entities, or hybrids each carry distinct governance implications. What matters is whether the structure delivers transparency, representivity and long-term benefit.

In practice, non-profit companies, where the community at large are beneficiaries, offer acceptable transparency and representivity. Directors drawn from traditional leaders, chiefs, business leaders and youth leaders provide balanced governance, while independent service providers manage implementation. Benefits derived from ownership should integrate with social and labour plans, which too often operate in silos disconnected from municipal and provincial strategies. Reform should align these instruments to reduce duplication and increase developmental impact.

For policymakers, the priority must be institutional quality rather than prescriptive detail. For investors, the signal lies in whether reforms genuinely address governance risk and legal uncertainty. For all stakeholders, partnership must be understood not as rhetoric but as a legal and institutional construct requiring careful design.

Progress through partnership is structural, not aspirational. Being stronger together requires trust, alignment, legal certainty, and courage to reimagine inclusive beneficiation. Only then can South Africa’s mining sector become competitive and sustainable in a rapidly changing global economy.

• Ntshona is a partner at Herbert Smith Freehills Kramer and Müller is a director

Business Times