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Errant DMR doing itself out of a job

20th January 2017

By: Martin Creamer

Creamer Media Editor

     

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The Department of Mineral Resources (DMR) is evoking increasing disappointment. Instead of doing South Africa proud, it is destroying this country’s reputation as an investment destination. It appears to have scant insight into the importance of economic growth, the need for foreign direct investment and the importance of export revenue.

As exposed in the Aquila court judgement just handed down, it is worsening as an irrational institution.

Judge NB Tuchten described it as one with a high degree of incompetence that obstructs rather than encourages mining investment, lacks the energy to resolve disputes and allows appeal processes to drag on for years.

No wonder the judge could not risk leaving it to the DMR to reaffirm the mineral rights of Aquila Steel South Africa; instead he saw fit to grant the rights to the resources company himself.

Yes, he did the DMR out of its own job, which should set South Africa thinking.

In countries like Chile, for instance, mineral rights are granted by the courts and not government, which minimises discretionary risk.

Sadly, in acting the way it did, the DMR maximised ill-advised discretion and even went against the very Mineral and Petroleum Resources Development Act (MPRDA) that democratic South Africa introduced in 1994.

Under the MPRDA, owners of minerals may no longer sterilise their exploitation by simply relying on their ownership.

But that is what the DMR grimly persisted in doing on behalf of the opaque government-controlled Pan African Mineral Development Company (PAMDC), which underlines the contention that the State cannot be player and referee.

A firm end has to be brought to the DMR’s stealthy approach. Transparency must be forced upon it.

According to the judgement, PAMDC never even applied for a prospecting right, yet it got one. “It is not in dispute that the registration of the right in the name of PAMDC was irregular and should never have been affected,” Tuchten said in his 63-page judgement.

Its linked concern, Ziza (the first two letters of Zimbabwe and Zambia), had neither the financial muscle nor the technical ability needed to carry out mineral exploration over the vast area given to it somewhat surreptitiously.

In contrast, Aquila’s quick and efficient drilling in no time delineated a 140-million tonne manganese resource worth many billions of rands.

Yet an internal appeal process was allowed to drag on, only coming to a head after Aquila took legal steps.

“In my view, Aquila has established a high degree of institutional incompetence on the part of government respondents and a lack of energy in resolving the issues which arose from that very incompetence.

“The DMR delayed its decision [on] whether to accept Ziza’s application and then concluded entirely irrationally that its delays had exempted Ziza from complying with the MPRDA,” the judge said in finding in favour of reaffirming Aquila’s prospecting and mining rights in the Kuruman area of the Northern Cape.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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