Law firm Bowman Gilfillan partner practising in min- ing, regulatory and environ- mental law Claire Tucker says there are a fair amount of new acquisitions and foreign investors acquiring interests in the South African mineral sector.

The Mineral and Petroleum Resources Development Act (MPRDA) of 2004 has allowed foreign investors more oppor- tunities in the sector, which has led to increased foreign activity.

“The minerals regime used to be property based, but it has now become an administrative law-based regime, which has led to an increase in the disputes of the decisions that the Department of Minerals and Energy (DME) takes,” says Tucker.

She comments that there is also more litigation than previously, mostly because of the new regime brought about by the MPRDA. Tucker says the system has resulted in more judicial reviews of the department’s decisions.

She adds that there is also increased activity within the sector, including more transactional work, and increased movement within the market. Tucker explains that this has resulted from the ‘use it or lose it’ principle in the MPRDA and the manner in which the new regime has changed to free up many unused mineral rights.

Fundamental changes in the way things are dealt with in the economy and the change in transactions include the increased entrance of foreigners into the market, as well as the increased number of new entrants owing to black economic empowerment (BEE).

Aligning the new Mining Charter for 2009 with the Codes of Good Practice published in terms of the BEE Act will be an excellent development, comments Tucker, as the current Mining Charter is an early version of BEE and updating is requi-red.

“A fair amount of the Charter is uncertain and unclear, leaving a great deal to the DME’s discretion, which makes it uncertain how transactions that are taking place will be inter- preted by decision-makers. It would be better if there was more certainty in the sector, and it will be to everyone’s advantage if the Charter is aligned to the BEE codes,” says Tucker.

Another difficulty in the mining sector is the lack of an adequate mineral rights register. Tucker says that legislation provides that there will be a register, but currently the DME requires that a Promotion of Access to Information Act request is carried out each time access to information is required.

It often takes months to receive information on whether someone owns mining rights and confirmation that there are no mortgage bonds registered over those rights. Tucker says this creates problems for financing and acquisition transactions where title confirmation is often required urgently.

The months it takes to acquire the information on mineral rights ownership is time that clients do not have when a commercial transaction is taking place, especially if rights need to be offered as security to banks for loans. She says that clients expect to acquire the information in the same period it takes to find out whether somebody owns a piece of real estate.

Tucker emphasises the importance of the need for a proper register that is completely accessi- ble to the public and can be searched as any other real estate register.

She concludes that Bowman Gilfillan, which offers a full range of mining legal services, plans to continue with the mining legal services it offers, as it has a good team within the department and sees a prosperous future in this type of work.