DA declare war on ‘flawed, poisonous’ MPRDA

James Lorimer, shadow mines minister

[miningmx.com] – THE Democratic Alliance (DA) will do everything in its power to ensure that amendments to the already “deeply flawed’ Mineral and Petroleum Resources Development Act (MPRDA) will not see the light of day.

Dubbed the “job-killing mining bill’ the DA’s Parliamentary leader, Lindiwe Mazibuko, and James Lorimer, the party’s shadow minister of Mineral Resources, yesterday briefed journalists ahead of tomorrow’s first anniversary of the Marikana tragedy where 44 people lost their lives in mining unrest.

Lorimer and Mazibuko pointed out that the MPRDA Amendment Bill will not, as government claims, bring about a better regulated mining sector, but will further fuel the “poisonous relationship’ that exists between the ANC, big business, big unions and government.

“Remember, some of the ANC’s National Executive Committee (NEC) members are on the boards of big mining companies,’ Mazibuko said.

“The ANC has facilitated the relationship between big business, big unions and government by making sure its interests are protected in all three. What this legislation will do is to intensify the cronyism and cherry-picking of winners based on who is closest to whom.’

The amended MPRDA if accepted in its current form will among other things change the way mining and prospecting rights are allocated.

Currently mining rights are awarded on a first come, first serve basis, but the Department of Mineral Resources (DMR) wants to replace it with a bidding system where mining rights are auctioned off to companies which truly have the capital and expertise for mining operations.

Lorimer believes this will fuel cronyism. He referred to the Imperial Crown Trading (ICT) and Kumba Iron Ore saga in 2009 when government granted ICT, a company with no mining experience, a prospecting right over a stake in Kumba’s Sishen mine.

“Those rights were snatched in dubious circumstances by a company which had no experience or operations in mining,’ Lorimer said, “but what it did have was connections to the names called Motlanthe, Mandela and Zuma,. [A new system of licence awarding] will cast at the very least a cloud of suspicion.’

The DA also fears that the MPRDA Amendment Bill could deal a fatal blow to South Africa’s energy industry – specifically oil and gas.

“For the first time ever all of South Africa’s exploration blocks in our 200km exclusive economic zone have been allocated to major oil companies – people like Total, Shell and Exxon,’ Lorimer said.

“They’ve come into South Africa with the understanding of a certain legislative framework, but that is all going to change dramatically because oil and gas are now going to be subject to the MPRDA.’

Under the MPRDA Amendment Bill, the BEE compliance for the oil and gas industry will change. Previously it resorted under the Liquid Fuels Charter that requires the industry to be 10% BEE compliant. However, henceforth it will fall under the Mining Charter which requires 26% BEE compliance.

Another concern, Lorimer said, is the provision that the state could earn an open-ended free carried interest. “What could be a huge energy industry – an employer of thousands of people and the supplier of massive amounts of foreign exchange – could disappear before it gets properly off the ground,’ he added.

Public hearings on the MPRDA Amendment Bill are set to take place during September, but Lorimer said the sessions will be very subdued.

“I can predict that any criticism (against the MPRDA) will be muted and couched and spun in a way so that it’s as positive as possible. We’ll never have a completely free debate because of the fear that these companies will be disadvantaged.

“All that will happen,’ Lorimer said, “is the power of the minister and her officials will increase. It’s going to get worse. If you annoy the minister, you won’t get your mining right.’

As a first step, the DA intends to call for the MPRDA Amendment Bill in its current form to be abandoned. It will also request the DMR to table all the 80 submissions on the Bill to be tabled before Parliament’s Portfolio Committee on Mineral Resources so MPs can see whether the DMR has taken cognisance of input from stakeholders.

“The DA will vote against the MPRDA Bill in its current form and will only reconsider it if the fatal flaws are adequately addressed,’ the party said.