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SA Deputy Minerals Minister defends MPRDA revision at PDAC
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5th March 2013
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TORONTO ( – South Africa’s Deputy Minister for Mineral Resources Godfrey Oliphant has defended the current review of the Mineral and Petroleum Resources Development Act (MPRDA), saying it did not affect investor confidence in the country’s mining industry, owing to not being policy yet.

The Deputy Minister responded to criticism from mining legal consultancy Webber Wentzel partner in the mining sector group Manus Booysen, who was addressing a MineAfrica seminar on ‘Navigating Africa’s mining terrain: Perceptions and reality’, on Sunday, when the Prospectors and Developers Association of Canada’s (PDAC's) yearly convention started.

Booysen pointed out that certain parts of the draft MPRDA Amendment Bill, published in December, were problematic in that it aimed to provide that certain activities in the mining industry require Ministerial approval.

Section 11 of the MPRDA Amendment Bill, which deals with asset and share transactions proposes that the Minister’s consent would be required for the sale of any shares on the stock market, which would, in effect, make public shares untradeable and could have disastrous consequences for the capital market.

Webber Wentzel partner and head of the mining sector group Peter Leon said, to the alarm of delegates, that the current Bill allows the Minister to prescribe a minimum target for minerals to be sold locally at prescribed prices, which he said is akin to export licensing, which is prohibited by the European Union (EU)/South African Trade Agreement.

This could be disastrous for South Africa’s relationship with the EU, which is a significant trade partner of the country, as it is the destination for up to one-third of the country’s exports.

Further, Leon pointed out that the MPRDA Amendment Bill had little relevance to the country’s prominent National Development Plan, which was unveiled in August last year, and that the Bill would exacerbate existing problems, while its stated aim was to remove ambiguity.

Oliphant told Mining Weekly Online in an interview on the sidelines of the seminar that South Africa has a “rock solid” regulatory framework for mineral resource development and has had since the MPRDA was launched in 2002.

“We have extensive experience in mining. The measures that we put in place ensure that we will be mining for the next hundred years-plus, while ensuring our people benefit from our resources,” he said.

“The [investment] climate is very welcoming. We agreed with industry to review the MPRDA in 2014, so there was never any uncertainty about this. We are doing what we promised we would. We are having debates, and that is exactly what it is – not policy.”

Oliphant stressed that the country’s objective to implement beneficiation at development prices would still be debated, but hinted that certain companies had already accepted that this would be the way forward.


Leon said South Africa could not afford to do more damage to its mining industry. Mining accounts for about 5% of the country’s gross domestic product, but for about 60% of its exports.

Mining, which was historically the backbone of the economy, had faced difficulties in recent months after being hit by wildcat strikes and the tragedy at Marikana mine, where 44 people were killed.

The tragedy had a huge knock-on effect with about 15 000 job losses and costing the country about R15-billion in lost revenue.

The country, in recent times, also suffered three investment ratings downgrades, with Moody’s citing a negative investment climate as the driving factor.

A recent public spat between mining major Anglo American and the South African government had also contributed to negative investor sentiment.

South Africa is weighed down by significant infrastructure challenges such as moving its resources to port, while the country is straining under exponentially increasing electricity costs.

Leon also pointed to the Department of Mineral Resources lacking capacity to process exploration and mining rights in a timely fashion, making it exceedingly difficult for miners to access foreign capital, owing to protracted application processing times.

Oliphant responded, saying government was working across all relevant State departments to promote regulatory certainty and reduce turnaround times, to alleviate the burden on investors.

South Africa is believed to be host to the world’s largest mineral endowment of about $2.5-trillion, as suggested by global bank CitiGroup.

Edited by: Creamer Media Reporter


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