Reducing regulatory burden remains critical
When comparing the legislative environments of different mining regimes on the African continent, law firm Webber Wentzel notes that the two highest ranked countries in terms of the 2019 Fraser Institute Survey – South Africa and Guinea – have similarities.
“South Africa is a mature mining jurisdiction; however, there is some policy uncertainty. Guinea has improved greatly as a mining jurisdiction. Similar to South Africa, Guinea has a good set of laws governing mining,” says Webber Wentzel mining head Jonathan Veeran.
He notes that Guinea’s higher ranking is primarily because it has shown improvement year-on-year.
“Guinea has a proactive government. This government has cleaned up corruption and cancelled concessions that were not awarded fairly. These concessions were re-awarded.”
“There have been legislative changes related to health and safety regulations, and changes to occupational regulations, these, along with other legislation, are unlikely to change in the near future. The pandemic has not lasted long enough for us to see differences or demand additional changes to legislation. I don’t think there are likely to be any significant regime, administrative or royalty changes owing to Covid-19,” he explains.
Further, when considering the impact on foreign investment, it is important to remember that demand is a key factor, adds Veeran.
“For example, when Zimbabwe instituted its indigenisation law, which states that 51% of all mining must be Zimbabwean-owned, there was still investor interest, owing to the demand for the minerals produced.”
However, if a mining environment is overregulated, investors will be hesitant, he says.
Veeran notes it is difficult to say how mining jurisdictions will need to adapt policies to encourage investment after Covid-19, but many are planning to go on roadshows.
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