DRAFT amendments to legislation which have shocked South Africa’s mining industry are likely to wind up in the courtroom after the Minerals Council SA told mines minister Gwede Mantashe of a looming confrontation. “We are coming,” said Paul Dunne – the council’s newly elected President.
The Minerals Council expressed its dismay on Tuesday that the Minerals and Petroleum Resources Development Bill (MPRD), aimed at overhauling the 2002 Act, would discourage new investment in mining and set the industry back by years.
It also said the department of mineral and petroleum resources ignored its recommendations on the proposed amendments. The council – which represents 90% of South African mining by production value – objected to amendments calling for increased beneficiation, and a requirement for empowerment for prospecting rights. The bill is open for public comment until August 13.
Speaking at the Minerals Council AGM on Wednesday Dunne said that while his organisation was “a very considered professional advocacy body” it would engage “very, very robustly with the DMPR”.
He added: “The minister knows us very well. We are very tough, and Minister, we are coming” – a clear indication that the council intended to renew hostilities with the DMPR in court. The last time the sides faced off legally was in 2021 when the High Court ruled against changes for new empowerment in the Mining Charter.
Even before Dunne spoke, Mantashe raised the likelihood of renewed legal hostilities. In an address at the AGM, Mantashe said that while he didn’t trust the council’s view that its views on the amendments were not taken on board, he added: “I know the industry will take us to court. I know it”.
Mantashe described the High Court ruling that found in favour of the Minerals Council’s “once empowered, always empowered” principle a “false victory”.
“The industry celebrated, but I called it a false victory,” he said. “I don’t know about other people but empowerment to me is the production of black capitalists.”
However, Mantashe confused attendees at the AGM by appearing to be unaware of an amendment in the MPRD insisting on exploration companies to meet with empowerment conditions before receiving a prospecting right.
“One thing I have not explained is that now and in the future, there is no problem on exploration because for exploration you are looking for the quality and quantity of deposits. You are not creating value so we are not expecting you to look for an equity partner for exploration,” he said.
“So major companies must remember that. They must do exploration for themselves. But once you get into production, we expect you to have a BEE partner.”
After the meeting a mining executive said this probably indicated the Minister was open to negotiation on this point, rather than expressing ignorance of his own department’s amendments to the MPRDA.
Another executive, however, was more forthright on the broad import of the proposed amendments. “It’s just more crap like we had the last time”.
Attorneys at Herbert Smith Freehills said on Tuesday were withering about the proposed amendments. “It is problematic because it doesn’t, I don’t think, achieve its stated objectives,” said Peter Leon, partner and Africa chair at Herbert Smith Freehills. “It may well promote more regulatory uncertainty and unpredictability.”
