Dear Editor
Minerals and Petroleum resources Minister Gwede Mantashe has issued “corrections” on his new Mineral Resources Amendment Bill. He has removed a requirement for BEE participation in applications for Prospecting Rights and has dropped a provision for Ministerial approval for change of control in listed companies that own Mining Rights.
Both these requirements were patently ridiculous. The ANC had flirted with the requirements for BEE for Prospecting Rights previously, before Mantashe definitively promised they would not ben needed. One wonders whether he read this version of the new Bill before he tabled it, or whether he simply forgot that he had already acknowledged this was a bad idea.
The dropping of Ministerial consent for listed companies changing ownership has left the position of unlisted companies unclear. As it stands, it seems that the selling of even a minority interest in an unlisted company will require Ministerial consent. The delay, administrative burden and frankly opportunity for corrupt rent-extraction will remain high.
Most of all though, the Minister has not begun to get to grips with some of the worst aspects of his Bill:
- It is the fifth time since the MPRD Act came into effect that the government has introduced or tried to introduce a tightening of the BEE requirements for applications for Mining Rights. As each tightening threatens profitability, it doesn’t just add to uncertainty, it creates the certain expectation that laws will continue to change and that the trend will be for investments to become less profitable and therefore less desirable.
- The Mining Charter appears to have been scrapped (ironically a demand of the DA) but it seems to have been replaced by the Codes of Good Practice which were promulgated during April 2009, but which are erratically and inconsistently applied by the Government. Furthermore, the Bill makes mining subject to the Broad Based Black Economic Empowerment Act for the first time. It would open the way for the concept of “once empowered always empowered” to be thrown out and for continuous empowerment to become a requirement.
- The Bill expropriates movable historic mine dumps and forces those processing them to apply for Mining Rights to continue to operate failing which those movable tailings dumps will be forfeited to the State. This is a grotesque piece of legislative chicanery that serves to legalise theft.
The mining industry has already passed its verdict: that this Bill will not sustain the growth and investment that the mining industry needs. It will not turn around the ANC’s record of shrinking the mining industry and forgoing the massive boost to economic growth and employment that would be delivered by an investor-friendly legislative system.
Unless there are major changes to this Bill, the DA will continue to oppose it.
Regards
James Lorimer MP
DA Spokesperson on Mineral and Petroleum Resources