Picture: ISTOCK
Picture: ISTOCK

Much rides on the Mining Charter and amendments to South African mining laws that new Mineral Resources Minister Gwede Mantashe is pushing hard to finalise.

Not only are the major companies awaiting the outcome, but junior miners and explorers are anxious for sensible laws to revive the moribund sector.

The exploration sector was dealt a devastating blow when the third version of the Mining Charter was gazetted by then mines minister Mosebenzi Zwane in June 2017.

It demanded 51% empowerment ownership of prospecting rights, arguably the riskiest and costliest segment in the mineral cycle.

That charter has been suspended while Mantashe, who took over the ministry in February, renegotiates a new document to steer racial transformation of SA’s mining sector.

Bernard Swanepoel, former Harmony Gold CEO and now a mining entrepreneur and the chairman of the Small Business Initiative, has said that the junior sector should be excluded from parts of the requirements of the charter because of cash and operating constraints.

These make it virtually impossible to comply with a document clearly aimed at larger operating mining companies.

Orion Minerals CEO Errol Smart — who was recently appointed as the representative of the Emerging Miners Leadership Forum of 200 small-scale miners to sit on the Minerals Council SA board, formerly the Chamber of Mines — agreed that there should be a special dispensation for junior miners.


Asked about the state of junior mining and exploration outside the Witwatersrand gold basin and the platinum- and chrome-bearing Bushveld Igneous Complex, his answer was simple: "nonexistent".

The most pressing problem for the sector, which has been in a state of malaise for decades, has been regulatory uncertainty. Smart said that in his experience in trying to raise capital abroad for Orion’s Prieska copper and zinc project in the Northern Cape there were deep concerns among offshore investors about sovereign risk in SA.

Working through the Minerals Council, the 200 junior miners had raised issues to be discussed in the formulation of the new charter, Smart said.

"We really need to foster the junior miners and exploration companies, because these are the green saplings coming up as the older, bigger trees start dying," Smart said.

But the problem was there were no statistics readily available to the council of how many junior miners there were.

This was highlighted by Mantashe at last week’s council annual meeting, when he said the online cadastre system of logging and tracking prospecting and mining rights had been collapsed to facilitate corruption in the Department of Mineral Resources.

Mantashe had committed to reviving the system and having stricter controls over the processing of applications.

When asked about the investor friendliness of the new charter, he said the department was in tough negotiations with the mining industry, labour and communities to formulate a new document that would encourage foreign investment in the sector.