MINERALS AND PETROLEUM
Radebe contradicts Mantashe on withdrawal of resources bill
Attempts by mineral resources minister Gwede Mantashe to provide certainty for investors in the beleaguered mining sector have hit a roadblock: one of his fellow ministers.
On August 29, Mantashe told investors at a mining conference in Australia that the controversial Mineral & Petroleum Resources Development Amendment Bill, which governs the mining and petroleum industries and has been in the works since 2012, has been withdrawn from parliament. Concerns about the bill include the designation of certain minerals for local beneficiation and the awarding of free stakes in oil and gas finds to government.
But last week, energy minister Jeff Radebe told investors the exact opposite at a conference in Cape Town — that his department wants the law passed as soon as possible and that parliament is expediting it. The conflicting statements add to the persistent cloud of policy uncertainty over SA’s mining, oil and gas industries, which has proved a major blockage for investment for almost six years.
"We want this act to be passed as soon as possible," Radebe said last week. "Any further delay … gives rise to this policy uncertainty and we require decisiveness and policy certainty. My understanding is that parliament is expediting it."
Olifile Sefako, chair of the National Council of Provinces’s select committee on land & mineral resources, said he had suspended further action on the bill. Final proposed changes were due to be sent to provinces for their final mandates. Sefako said his decision was informed by media reports that Mantashe intended to withdraw the bill and the minister has yet to initiate a formal process.
The bill falls within the remit of the mineral resources minister, but because aspects relating to oil and gas directly affect the department of energy, there was an understanding that the two ministers would share this piece of legislation.
Peter Leon, a partner and mining lawyer at Herbert Smith Freehills, said the conflicting comments show a clear dissonance between the ministries. However, the bill falls under mineral resources and it is ultimately Mantashe’s call.
"He is quite right to withdraw the bill," Leon said. He noted that if passed it would likely face constitutional challenge.
Of particular concern to the mining industry is a proposal that mining companies wanting to export apply for written consent from the mineral resources minister, who could apply conditions. Producers of designated minerals would also be required to offer a percentage of the minerals to local beneficiators.