Lawyer hails Mantashe appointment, govt resolve to cooperate with mining
GEORG KAHLE Mantashe’s commitment to ensuring that an agreement on the charter is reached by June, should result in the legislature’s making the necessary amendments to the MPRDA
Recent political changes, not least the appointment of Gwede Mantashe as Mineral Resources Minister, combined with the Ramaphosa administration’s seeming resolve to collaborate with the mining industry, particularly with the Chamber of Mines (CoM), have resulted in a “cautious optimism” among mining stakeholders, says Norton Rose Fulbright director and mining head Georg Kahle.
“Industry has reacted positively to the new mining Minister – a seasoned politician who is very experienced in facilitating engagement among different stakeholders and who has had a successful career as a mining-sector-based trade unionist. “This has fed the positive perception of the country’s current political environment,” comments Kahle.
He notes that this perception stems, in the main, from Ramaphosa being seen as proindustry and promining, based on his mining background and understanding of the importance of the industry.
Further, Ramaphosa’s willingness to resolve the stalemate between the CoM and the Department of Mineral Resources (DMR) with regard to Mining Charter III is positive, says Kahle.
“Ramaphosa’s intervention to restore dialogue between the DMR and the chamber is a step in the right direction . . . I hope and believe that a negotiated settlement will be reached between industry and government, and that this settlement will assist in bridging the trust deficit in recent years.”
Kahle says that, once a settlement has been reached, it will have implications for the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill. “The charter and the MPRDA are interconnected . . . they are also the two major policy documents deterring investment.”
He notes that, “generally speaking”, the perception of the country’s political situation has improved dramatically, but “South Africa still ranks very poorly in terms of policy certainty and predictability from a legislative perspective”.
It is common knowledge that investors want legal certainty, and Kahle stresses that the uncertainty stemming from the charter and the MPRDA is a “huge inhibitor” to growth in the mining sector, “which desperately needs growth to create jobs and stimulate tax revenue and economic growth, in general”.
However, he believes that Mantashe’s commitment to ensuring that an agreement on the charter is reached by June, combined with the support of the Presidency, should result in the legislature making the necessary amendments to the MPRDA, thereby resulting in certainty for the mining sector for the first time in more than five years.
Battery Metals
Kahle notes that, ever since Ramaphosa was elected as African National Congress president in December, the prevailing sentiment has been that the country has reached “the start of a new dawn”.
He says this sentiment was palpable at the 2018 Mining Indaba, and that the renewed belief and interest in the sector have further been bolstered by the “new commodities boom”, specifically for battery materials such as lithium, nickel, cobalt, platinum and vanadium. Global developments pertaining to the use of electric vehicles, platinum fuel cells, renewable energy and electrical storage, have led to increased exploration and mining activity for the so-called energy metals – a trend acknowledged by the Indaba organisers, he adds.
Norton Rose Fulbright also tapped into the trend, having invited thought leaders from mineral exploration and beneficiation companies, the Department of Trade and Industry (DTI) and platinum fuel cell producers to participate in its Indaba panel discussion on ‘New Energy Revolution and the Role of the Mining Industry’.
Kahle, who acted as panel moderator, notes some of the resolutions: energy metals will play an increased role in mining activity; Chinese demand for electric vehicles, in response to massive air pollution, will push demand for battery metals; and there will likely be a combination of battery-operated vehicles and hydrogen-fuel-cell-operated vehicles, with the former being used for shorter trips in urban areas and the latter for longer distances and for heavier vehicles such as trucks. The panel’s consensus was that Africa would be a key beneficiary of this “revolution”.
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