IN May 2024, then Orion Minerals CEO Errol Smart gushed: “I’m coming off an all-time high on hearing this news.” A day earlier, the South African government had signed an agreement with a Canadian-led consortium to install a tailor-made minerals licensing system to replace its crumbling forerunner, SAMRAD. The industry rejoiced, even though it had taken the government years to take action.
Two years later the mood is completely different. “I feel we’ve been sold a false dawn,” Smart said in an interview last week.
The mining industry’s worst fear is that the new software might not be working. It’s impossible to know for sure, however. The Minerals Council South Africa is yet to attend an interactive demonstration of it, though the department of mineral & petroleum resources (DMPR) began rolling out the system in October, starting in the Western Cape, where ownership of the country’s minerals is the least contested.
“The longer it’s taking to be delivered, the less confident we become in terms of what the final product will look like,” said Minerals Council CEO Mzila Mthenjane at its annual general meeting on 27 May. “And unfortunately, the longer it takes, the more speculation we hear about the reason it’s not being delivered on time.”
DMPR director-general Jacob Mbele says the rollout is progressing. “There’s been extensive workshopping and training on the live system with licensees across the Western Cape,” he says in an online reply to questions. He has promised to “touch base” with the Minerals Council in the wake of comments made at the AGM.
The industry’s major concern is that the Canadian software adopted by the DMPR has been a technical mismatch from the outset. The structure of South Africa’s mineral rights ownership is based on irregular farm boundaries, a legacy of the country’s 150-year history as a mining hub.
“The new system works only with blocks,” says an industry source, speaking on condition of anonymity. “The DMPR is now selling this concept as ‘international best practice’, but the problem seems to be a limitation of the vendor’s software. Its methodology is popular in Canada, but it’s unsuited to South Africa.”
The vendor, PMG Consortium, is led by Pacific GeoTech Systems, a reputed company with more than 23 years’ experience. It has successfully provided resource management systems in British Columbia, Manitoba, Ontario and Yukon, as well as in Colombia and Greenland.
“The fact that the new system is not going to use surveyed farm boundaries — South Africa’s cadastral standard for everything from voting districts to provincial boundaries to all mining rights issued since 2004 — is likely a disaster,” says a UK mining financier, who asked not to be named as he does business in South Africa.
“The very fabric of South Africa’s landscape – from power lines and rows of trees to roads and fences – follows these boundaries. But … future mining rights are going to require a professional surveyor to work out their boundaries,” he says.
Smart disagrees with this assessment. “Internationally, that problem has been dealt with, and I think the software could take it into account,” he says. “It’s the same as the small square pixels on a TV screen — if you have enough of them you can make up any shape you like. So it can be done.”
However, one point on which Smart and industry sources can agree is to ask why the DMPR opted for this software despite having viable alternatives within South Africa. Smart says Egypt, where he’s consulting, uses Landfolio, previously FlexiCadastre, developed by Cape Town-based Spatial Dimension. Landfolio is also used by South African mining companies. “But it was ignored by the government. That raises the question: why?”
A source says: “The more sinister view is that the DMPR jumped at the opportunity to create additional delays and obfuscate ownership matters further, while seemingly doing the right thing.”
Spatial Dimension CEO Bill Feast declined to comment when approached by Miningmx. But the company has previously identified where it differs from some international rivals. In a white paper published in 2017, the company stated: “Many countries are updating their mining laws and regulations, and a common theme in some of the new laws is the implementation of a cadastral grid to regularise the shape of mineral rights.
“It is our experience that migrating licences to a cadastral grid can create a negative return on investment in terms of time, money and goodwill.”
Says Smart: “My assumption is that there are too many powerful players involved who benefit economically.”
Unwanted bedfellows
A bungled cadastre system is probably the last thing South Africa’s mining sector needs right now. A 2025 perception survey published in February by Canada’s Fraser Institute ranks South Africa’s mining sector 64th out of 68 mining districts in terms of mining policy alone — just above Guinea, Burkina Faso and Mali.
Add to this the lure of geology — in other words, the extent to which mineral resources either offer an incentive or, in South Africa’s case, offset government policy — and the outcome is little changed.
One of South Africa’s stablemates in the Fraser Institute ranking is Burkina Faso, the West African nation that is beset by jihadist terrorism and whose military ruler, Ibrahim Traoré, said in April the country “must forget about democracy”.
Critics of the Fraser survey say its data pool is pitiably small; the 2025 findings were based on 256 responses out of 2,304 individuals polled. But the institute’s findings on perceptions about South Africa are reflected in the country’s data.
Stats SA numbers show that South Africa’s real exploration expenditure was R738m in 2025 (R781m in 2024), down from R6.2bn in 2006. This is less than 1% of global exploration spend, far below the 5% of spend that mineral & petroleum resources minister Gwede Mantashe has said his department is targeting.
Girding for a “surprise”
A substandard cadastre system would be a body blow to future investment in the sector, but it is minor compared with the potential damage of proposed amendments to the Mineral & Petroleum Resources Development Act. Passed in 2002, the act has guided a generation of empowerment action in the mining sector to the extent that every JSE-listed miner is compliant. However, a bill gazetted in parliament last year may set down new rules for compliance that threaten to damage the sector, now and in the near future.
Mthenjane tells Miningmx that meetings with the DMPR about the amendments have been positive. “We feel heard,” he says. The concern, however, is that the sector will eventually be ignored. Minerals Council president Paul Dunne says: “What is still at the back of our minds and worries us is that we may end up with the surprise of the second draft of the amendment bill not fully or completely representing those engagements.”
Changes to the act could impose new empowerment targets on mining companies where there is a change of control. Miners could also be asked to embark on a new round of deals about tailings deposits that didn’t fall under the aegis of the 2002 act.
Hulme Scholes, a partner at Malan Scholes Attorneys, says: “I have no doubt that the council will be surprised by the second draft on the amendment bill and by their comments not being taken into account. That’s how it works with the government.”
Despite these factors, there are signs of goodwill in the country’s minerals development. After years of setbacks, Orion Minerals, which is listed on the JSE and in Australia, is expected to complete a R5bn fundraising for brownfield copper projects in the Northern Cape soon. BHP, the world’s largest miner, has said it will consider exploring here again, and another diversified miner, Anglo American, has pledged R600m to the Council of Geoscience’s exploration fund, taking the total amount of the funds raised to R1bn.
Imagine, though, how well South Africa could fare were conditions for investment better?
“It still feels as if we are talking past each other,” says former Anglo American CEO Mark Cutifani of the relationship between the government and investors. “Expectations about how quickly change could take place didn’t take into account the sensitivity and needs of capital,” he adds. “If we could reframe the policy by building a foundation off the needs of capital and investment, the issues of transformation should be dealt with as a subset of a much more tailored approach.”
As Cutifani warns, “the sides will remain at loggerheads, which hurts the industry, transformation and South Africa”.
A version of this article first appeared in the Financial Mail.
