Mineral Resources Minister Gwede Mantashe’s recommendation to withdraw the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill may have been motivated by government’s desire to remove regulatory uncertainty affecting the mining sector and, in so doing, foster a more attractive investor environment, says Hogan Lovells partner Nicholas Veltman.

“I believe [the mining] industry has welcomed the proposal to withdraw the Bill – it has been the subject of debate for a long time.”

Veltman notes that, since the Bill’s introduction in 2013, industry stakeholders have consistently ventilated the issues surrounding the MPRDA Amendment Bill, which include the export of certain minerals being subject to Ministerial consent, producers of certain minerals being required to offer a percentage of the minerals to local beneficiators, as well as the requirements regarding the transfer of, and shareholder interest in, mining rights.

The potential withdrawal of the Bill can only benefit the industry and provide more certainty, as mining companies can operate under the provisions stated in the current MPRDA. Veltman says that the main aim of the Bill was to include the petroleum sector, but that the Bill ultimately caused more confusion.

“Minister Mantashe commented that trying to include the petroleum sector into the minerals legislation further complicated the issue,” notes Veltman, adding that this decision seems to indicate that government has now reached the same conclusion as other stakeholders, which is to “keep the oil and gas legislation separate from minerals legislation”.

While Mantashe has made the call to withdraw the Bill, the decision ultimately rests with Cabinet.

“Cabinet will be the ultimate decision-maker and it will have to pass the relevant Cabinet resolution confirming the withdrawal. Generally, Cabinet would take into account the Minster's recommendation, as the matter falls within his portfolio.”

Veltman speculates that the reason for Mantashe’s call is that he was seemingly moved into his portfolio to rectify the prevailing uncertainty. “Minister Mantashe was brought into an industry that was extremely uncertain and, based on his actions so far, it appears that he has been man- dated to get rid of the uncertainty.”

As soon as he was appointed, the Minister restarted discussions and seemingly progressed the matter to a point where consensus and a final draft of the Mining Charter seemed imminent.

“The next issue would have been the MPRDA Amendment Bill, and probably the next . . . on his agenda . . . [will be] the environmental legislation impacting the mining sector. He would likely try to fix the elements that create uncertainty . . . to create an environment that attracts investment.”

While the current sticking point for Mantashe seems to be the need for clear and targeted petroleum legislation, Veltman expects that several elements will still fall under the ambit of the Department of Mineral Resources (DMR). He posits that elements pertaining to end-users or suppliers will likely be the responsibility of the Depart-ment of Energy, while licences and aspects relating to extraction will fall under the DMR.