SA’s mining story is one of the great paradoxes of modern economic policy. Beneath our soil lies extraordinary mineral wealth, yet above it the legal and bureaucratic structure intended to democratise that wealth has often achieved the opposite.
Many critics now argue that the Mineral and Petroleum Resources Development Act of 2002 (MPRDA) — conceived as an instrument of transformation — has instead created uncertainty, paralysis and a climate in which mining investment has steadily withered. The record of the past two decades, and the law itself, suggest that these concerns are largely justified.
The MPRDA’s defining feature is its declaration, in section 3(1), that the state is the “custodian” of SA’s mineral and petroleum resources “for the benefit of all South Africans.” This provision abolished private mineral ownership and vested all rights in the people, administered by the mineral resources & energy minister.
Sections 3 and 5 make clear that any prospecting or mining right granted under the act is not ownership but a limited real right — meaning a permission to extract minerals subject to state control. While that arrangement passed constitutional muster, it concentrated power within a single administrative gatekeeper.
Furthermore, under sections 17(1) and 23(1), the minister must grant a right if an applicant meets every listed requirement and must refuse if not. Those requirements include technical and financial capability, environmental compliance, a social and labour plan and alignment with empowerment goals under the Mining Charter of 2018.
Where deals die
Yet deciding whether an applicant “meets” those standards is inherently subjective. In practice these clauses created a wide band of administrative discretion at precisely the point where certainty matters most. The same logic extends to section 11, which forbids any transfer or encumbrance of a prospecting or mining right — or even a change in control of the company holding it — without the minister’s written consent.
Courts have confirmed that indirect changes of control also fall within section 11, meaning that every single merger, acquisition or financing transaction in the sector depends on ministerial approval. When approvals languish, deals die.
The MPRDA’s defining feature is its declaration that the state is the custodian of SA’s mineral and petroleum resources for the benefit of all South Africans.
The MPRDA gives the minister further levers under sections 47 and 49 to suspend, cancel or prohibit operations, in the public interest or for sustainability reasons. These powers, although legitimate, reinforce a structure in which the department of mineral resources and energy functions less as a regulator and more as a gatekeeper to the nation’s wealth. Section 9 was intended to ensure fairness through a “first-come-first-served” rule for applications, but in an opaque system queues quickly became tradable assets in themselves.
The courts have repeatedly grappled with the constitutional consequences of this system. In Agri SA v Minister for Minerals and Energy (2013), the Constitutional Court held that the extinction of old order mineral rights was a deprivation, but not an expropriation, because the state did not acquire the minerals for itself but held them in trust for the people.
The ruling upheld custodianship as compatible with section 25 of the constitution, while stressing that administration of those powers must still be lawful, reasonable and procedurally fair under section 33 and the Promotion of Administrative Justice Act of 2000. Later, in Bengwenyama Minerals v Genorah Resources (2010), the court set aside a prospecting right issued without proper consultation, calling the granting of such rights a “grave invasion” of affected parties’ interests. The message was clear: the MPRDA’s legitimacy depends not on its text, but on its faithful execution.
Samrad dysfunctional
Yet execution has been the weak link. The SA Mineral Resources Administration System (Samrad) electronic cadastre, introduced in 2011 to manage applications, was meant to bring transparency. Instead, it became synonymous with dysfunction — a system often offline, riddled with data errors and invisible to the public.
For years SA has been one of the few major mining jurisdictions without a live, publicly accessible map of mineral rights. Officials have promised a modern digital cadastre repeatedly, with the latest deadline this month. Meanwhile, thousands of licence applications remain outstanding and exploration capital continues to flow elsewhere.
The consequences have been measurable. SA once attracted about 5% of global exploration spending; today it receives less than 1%. The government’s own Critical Minerals & Metals Strategy 2025 recorded exploration outlays of just $117m in 2023 which is, shockingly, below 1% of the global total.
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On the Fraser Institute’s Policy Perception Index, SA ranked 53 out of 62 jurisdictions in 2022, with investors citing “onerous ownership requirements” and the lack of a transparent cadastre as primary deterrents. Despite world-class geology, the country’s policy environment now ranks near the bottom globally.
When licensing backlogs run into the thousands and ministerial approvals can take years, capital simply migrates to jurisdictions where rights are secure and timelines predictable.
At home, the economic footprint of mining has contracted in parallel. Mining contributed roughly 21% of GDP in 1980, about 15%-20% in the early 1990s and only 8% by 2016. That figure remains unchanged today. This decline has multiple causes: ageing deposits, rising energy costs, labour unrest and weak infrastructure. Yet regulatory risk is the common thread identified by investors and the Minerals Council SA alike. When licensing backlogs run into the thousands and ministerial approvals can take years, capital simply migrates to jurisdictions where rights are secure and timelines predictable.
The Sishen Iron Ore saga remains the most striking example of administrative failure. After ArcelorMittal SA failed to convert its old-order right, Kumba Iron Ore applied for the remaining interest in the Sishen mine — only to discover that a politically connected newcomer, Imperial Crown Trading (ICT), had been awarded overlapping rights to the same property. In 2011 the High Court struck down ICT’s right, finding it legally baseless. But the episode — in which critical documents reportedly “went missing” and competing rights overlapped — damaged confidence irreparably. Losing your file, it turned out, could mean losing your mine.
Noble intentions cannot excuse poor administration
None of this means the MPRDA is unconstitutional or that its transformation aims were misguided. The act was conceived to ensure that the benefits of mining reach all South Africans, to rectify the racial exclusions of the past and to embed environmental and social responsibility in a historically exploitative industry. Section 3(3) and section 49, together with the later “One Environmental System”, advance the constitutional right in section 24 of the constitution to an environment that is not harmful and to sustainable development. In law, those objectives remain unimpeachable. But noble intentions cannot excuse poor administration. A system that depends so heavily on discretion demands impeccable governance, and that has too often been lacking.
Comparisons with peer jurisdictions underline the point. Canada and Australia, where the state also owns the minerals, operate transparent online cadastres and rule-based licensing. Applications are processed automatically on a first-in-time basis; once granted, rights enjoy strong tenure security and predictable renewal. Botswana, closer to home, ranks fourth worldwide for mining policy perception, owing to its efficient cadastre and consistent regulation. SA, by contrast, has coupled state ownership with bureaucratic opacity, losing the confidence of explorers and financiers who once regarded Johannesburg as the mining capital of the world.
The evidence therefore supports what many in the industry have long maintained: that the MPRDA’s structure and its administration have undermined predictability and competitiveness in SA mining. The Act’s key mechanisms — state custodianship under section 3, ministerial control over granting and transferring rights under sections 17, 23 and 11 and the suspension and prohibition powers in sections 47 and 49 — created a framework that is constitutional but administratively fragile. Its implementation through a dysfunctional cadastre, chronic backlogs and discretionary bottlenecks has turned that fragility into a systemic handicap. The data, like a mining GDP share halved since the early 1990s, less than 1% of global exploration expenditure and near-bottom policy rankings confirms the scale of the damage.
What, then, is the way forward? Reform requires aligning the existing principle of custodianship with international best practices. SA needs a live, public and time-stamped cadastre accessible to all, and clear, consistently applied criteria that narrow discretion and prevent arbitrary delay. These are not ideological adjustments. If anything, they are administrative necessities.
The MPRDA’s promise was that mineral wealth would serve the people of SA. To fulfil that promise the law must work as efficiently as the mines it regulates. After two decades of uncertainty, it is time to restore the transparency and fairness that once made this country the world’s mining benchmark. If we get that right, the ground beneath our feet can once again be a source not of frustration, but of economic confidence.
•Joosub is manager: constitutional advancement at the FW de Klerk Foundation.
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