SMALL scale miners must be black-controlled in order to apply for a mining permit according to a proposed amendment to the Minerals & Petroleum Resources Development Act (MPRDA).
Some 57 proposed amendments to the MPRDA are currently being considered by the National Council of Provinces (NCOP), the upper house of the South African Parliament.
One of these amendments is that mining permits for properties of less than 1.5 hectares, and of no more than two years in duration, can only be awarded to applicants with a 50% plus one share black shareholding.
The amendment is thought to have particular relevance for the sands and quarrying, and the alluvial diamond mining sectors.
Quarrying and sands mining employed about 8,000 people in 2016, according to the Department of Mineral Resources (DMR).
However, James Lorimer, the shadow mines minister, thinks the proposal – if promulgated in the MPRDA – could be the thin end of the wedge if applied to the mining charter when it undergoes one of its five-year redrafts. The current redraft is thought to be nearing publication in the government gazette this month.
“We wil oppose it at the NCOP level and when it comes back to the National Assembly,” said Lorimer. “However, unless the ANC has a change of heart, they will include it in the final bill.
“My issue is that it will be seen as another bad sign. Mining majors know that that is the trending direction of government policy and will be asking how long it will be until that provision is extended to them too,” he said.
In a document last updated on November 24 and titled: ‘Table of Proposed Amendments to the Mineral and Petroleum Resources Development Amendment Bill’, it is suggested that certain applicants are a “… 50 + 1% black owned South African company”.
It is then explained in the proposed amendments that: “The purpose and objective of the proposal is to provide for reservation of mining permits for black owned and controlled companies”.
The notion of 50% plus 1 share control was used by Eskom in selecting new suppliers of coal, although Exxaro Resources has challenged this demand saying it is merely a policy adopted by Eskom but not set down in law.
“As the MPRDA is currently in the hands of the provincial legislatures [it] has made submissions and presentations on a number of occasions,” said the Chamber of Mines in a statement. “This process is continuing,” it said.
It added, however, that it had members who are not all black-owned or controlled. “Some Chamber members, including the quarrying members of the Aggregate and Sand Producers Association of SA, and South African Diamond Producers Association need to apply for mining permits on a regular basis.
“These operations typically have short (three-year) life spans and the relevant mining areas do not exceed five hectares, within the meaning of s27(1) of the MPRDA,” it said.
