Reworked mining law must allow harsher sanctions for illegal mining

The Minerals Council SA says changes to the Mineral and Petroleum Resources Development Act should remove obstacles to mining investment and protect mineral resources from illegal mining activities.

On Wednesday, the council briefed reporters at the Investing in African Mining Indaba in Cape Town. This comes after mineral and petroleum resources minister Gwede Mantashe announced on the first day of the Indaba that the department was working on updating the act.

Minerals Council senior executive for public affairs and transformation Tebello Chabana said the council also hoped the updated act would include sharper definitions of illegal mining within the law so it could attract harsher sanctions.

“There’s got to be a lot more in terms of content and providing some kind of definition for and sanctioning of illegal mining. We need legislative support to enable the police to able to do their jobs.

“There’s [currently] no crime in mining or transporting a truckload of chrome, so to speak. We need to be more specific in defining some of the things we think are illegal and ensure criminal sanctions are attached to these kinds of crimes.”

He said arresting and prosecuting illegal miners for a minor offence such as trespassing was ineffective as this allowed criminals to post bail cheaply and easily.

Minerals Council CEO Mzila Mthenjane said: “There are issues with illicit trading, not only mining. There are issues from a border management perspective. All of that needs to be looked at in the legislation.”

Mthenjane told reporters the act’s provisions for permitting and BBBEE requirements required clarity. He said many ownership deals were vendor-funded and that that took away value for a shareholder.

“While that [loss of shareholder value] may be accepted, when you have a viable mine and it comes to exploration where it’s very risky, that’s where the big turn-off is. The minister has often said there’s no requirement for BEE ownership, at least not in the way we would do it through vendor financing.

“To the extent that it’s a commercial transaction on equal terms, it doesn’t prevent an investor from doing that. That language, in my view, needs to be translated into writing so it is clear to the administrators what the rules are when it comes to prospecting,” he said.

Mthenjane said there had not been sufficient reconciliation of the minister’s remarks in public and the law. He said the mining sector was upbeat about the potential for renewable energy projects to support Eskom’s existing power provision and provide electricity to the industry.

“We have 90 renewable energy projects in the pipeline at a potential cost of R275bn, and this will contribute close to 16GW of renewable energy. This will go a long way to take pressure off the grid and free the economy.”

Asked about Mantashe’s proposal for a commodity-linked electricity tariff increase for mining companies to protect mining companies against massive hikes, Mthenjane said the council would be open to having discussions with government on the matter.

“It’s not out of the ordinary. I think we’ve seen it with aluminium smelters, given their sensitivity to electricity. To the extent it is considered, particularly for chrome and manganese smelters, it is something that could ensure endurance.”

He said the mining industry was also keenly awaiting the arrival of a functional and efficient cadastral system to process licence applications with an iron-clad database, and urged government to develop interventions to make the earlier stages of mining investment easier.

“We also want government departments to be aligned and streamline aspects of approving prospects in mining applications. The creation of a one-stop shop for investors to expedite exploration in mining projects is critical.”

He said the industry had not yet seen sufficient progress in alignment between different departments to achieve the same goals set out by government to support the sector and the economy.

TimesLIVE