The regulatory regime in South Africa is not more difficult to negotiate for mining and exploration companies than in many other jurisdictions around the world, First Uranium CEO Gordon Miller said in Toronto last week.

Permitting for mining in the country is often seen as an obstacle or deterrent by international investors, but “there is a well-defined process; it just takes time and one needs to be patient,” he said in a speech at a breakfast hosted by the Canada-South Africa Chamber of Commerce.

First Uranium mines gold and uranium from two operations in South Africa, and has a primary listing on the Toronto Stock Exchange.

Miller is also the CEO of JSE-listed Simmer & Jack Mines.

He pointed out that, in North America there are even some jurisdictions, like British Columbia and Newfoundland, which have effectively banned uranium in the near term.

“By comparison, with these provinces, permitting in South Africa is relatively easy,” he quipped.

First Uranium is, however, continuing to look for near-development uranium acquisition opportunities in North America, executive vice president of corporate development Jim Fisher told Mining Weekly Online.

Fisher moved to Toronto last year with the express purpose of evaluating potential targets, in a bid to grow the firm's production profile and eliminate the one-country risk that comes from having all its eggs in South Africa, so to speak.

The financial crisis has increased the number of potential opportunities, as distressed juniors run out of money for exploration, he said.

SA'S OWN CREDIT CRUNCH

Meanwhile, Miller also commented that, although both Simmers and First Uranium have successfully complied with the black economic empowerment (BEE) requirements of South Africa's mineral legislation and received all the necessary approvals, there remain some “outstanding” issues with the system .

There is a “lack of understanding” because of disparities in certain definitions, he said, and it makes strategic planning difficult when there is no certainty on how different government departments will interpret the requirements.

Further, the global financial crisis has had its own implications for BEE.

“For example, a number of initial BEE shareholding positions have been sold early and/or used as collateral for loans,” Miller commented.

“And some of those loans have defaulted, with the underlying shares no longer backing up the loans, thus creating South Africa’s own credit crunch.”

If these difficulties could be resolved, it would go a long way to improve the economic reality of BEE investments and alter international perceptions of the BEE equity ownership requirements, Miller said.
Edited by: Liezel Hill

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