The outcome of the public hearings held by the Parliamentary portfolio committee on mineral resources as part of its review of the 2010 Mining Charter, as well as the Mineral and Petroleum Resources Development Amendment Bill, currently scheduled to be published in 2012 (the MPRDA Amend- ment Bill), and the African National Congress’s (ANC’s) nationalisation of mines report are expected to form an important part of the Department of Mineral Resources’ (DMR’s) deliverables during 2012, says the head of Webber Wentzel’s Africa mining and energy projects practice, Peter Leon.

Despite South Africa’s rich mineral resources, which financial services provider Citigroup in 2010 estimated at just under $2.5-trillion, the mining sector is currently in recession, having contracted during the first three quarters of 2011.

Leon explains that the decline can be linked to regu- latory uncertainty regarding mining legislation in South Africa, maladministration, a lack of a broad-based black economic-empowerment (BBBEE) policy, the debate on the nationalisation of mines and the establishment of a State-owned mining company.

“The Mining Charter review public hearings that were handled by Parliament’s port- folio committee on mineral resources last year, are expected to be made public by early February,” says Leon.

Further, he says the MPRDA Amendment Bill will seek to tackle licensing issues, regulatory delays and associated problems with the MPRDA. .

“Mineral Resources Minister Susan Shabangu has asserted that the DMR is committed to learning from best practice,” he adds.

Meanwhile, the 2012 release of the ANC’s research report on the nationalisation of mines will be eagerly awaited by the mining sector, as its decision to defer it from last year to this year, according to Leon, left a cloud of uncertainty hanging over the industry.

Further, he notes that there is an important link between the ANC Youth League’s demands to nationalise South Africa’s mines and the promotion of a narrow rather than a broad-based form of BEE under the Mining Charter.

Leon says the implementation of current BEE policies has become a catalyst for populist support in favour of the nationalisation of South Africa’s mines owing to the fact that they have benefited the well-connected few, as opposed to economically empowering workers and poor, marginalised black communities.

Further, he warns that a flawed BEE policy will con- tinue to fuel discontent among the historically underprivileged majority in South Africa.

A final decision on nationalisation will be taken at this year’s ANC elective conference in Mangaung, in December, preceded by its June 2012 policy conference.

Mining Weekly previously reported that Leon believes that the participation of the State as both player and referee in South Africa’s mining sector makes the creation of an independent mineral regulatory body essential.

The establishment of State-owned mining company African Exploration Mining & Finance Corporation raised concerns when the company benefited from a key regulatory exemption for nearly three years and was granted rights on this basis.

Leon highlights that the introduction of an independent mining regulator would ensure that the State-owned miner competes for rights on the same basis as the private sector and is not unfairly advantaged by taxpayer- funded subsidies.

However, he points out that the measures announced by Shabangu last year should improve South Africa’s mining regulatory environ- ment.

Among the DMR’s announced measures was the introduction of a seven-and-a-half month moratorium (which was extended in Mpumalanga) on all new prospecting right applications and the internal auditing of already granted licences.

Also introduced by the DMR was a new electronic mining cadastre system in April last year, which aimed to add greater transparency to the process of applying for prospecting rights, mining rights and permits.

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