‘No need to change mining act’
Mineral resources minister Gwede Mantashe’s plan to scrap the Mineral and Petroleum Resources Development Amendment Bill has been strongly endorsed by those involved with the industry.
The bill, which has been in the legislative process since 2013, has been stuck in the National Council of Provinces (NCOP) for months and has been a cause of considerable uncertainty in the mining industry.
Of particular concern is a proposal empowering the minister of mineral resources to designate any mineral to be offered at discounted prices to domestic beneficiators, failing which it may not be exported without his prior consent.
"It is excellent news as much as a very sensible move by Mantashe," said Herbert Smith Freehills partner and mine law expert Peter Leon. "It is also good news for the oil and gas industry, provided this can be done quickly. The committee’s decision to fast-track the bill would have been susceptible to constitutional challenge."
DA mining spokesperson James Lorimer also welcomed the good news on the possible withdrawal of the bill saying there would be "a lot of relief" in the industry.
According to Leon, the bill would remove almost all of the statutory time limits fixed for departmental decision-making and leave them to ministerial regulation; give the minister full and unfettered legislative power over empowerment matters by elevating the mining charter to a binding law; and require prior ministerial approval for the transfer of a controlling interest in a listed company, as well as any interest in an unlisted company that holds any interest in a prospecting or mining right.
Additional amendments were introduced to benefit the oil and gas sector in November 2016. These gave the government a free share in all upstream petroleum ventures.
Mantashe told parliament’s mineral resources portfolio committee on Wednesday that his view and that of his department was that the bill should be withdrawn, allowing the mining industry to be governed by the Mineral and Petroleum Resources Development Act in its present form. There was nothing in the act that inhibited the sector, he said.
"We want to remove the uncertainties that emanate from our sector," Mantashe told MPs.
The particular needs of the petroleum sector could be dealt with in a dedicated, directly targeted legislative framework for the sector. This was better than trying to squeeze the petroleum sector into the act. He plans to meet representatives of the petroleum sector this week to discuss the way forward. He stressed that his plan would have to be taken to the cabinet.
Mantashe said there was "nothing to be proud of" in terms of the progress of the bill in the NCOP. Several meetings — the last one two days ago — had been held with the select committee on land and mineral resources dealing with the bill.
The problem seemed to be a combination of a lack of understanding and the pursuit of narrow interests. Each of the provinces was adhering to their own particular mandates.
Dealing with the mining charter, Mantashe said he hoped to have finalised it — including its presentation to the cabinet and publication in the government gazette — before the investment summit in November.
"This will remove a great deal of uncertainty," he told MPs.
The bill was sent back to parliament by former president Jacob Zuma in 2015 partly on the grounds that proper consultation processes were not followed in the NCOP.