Win­dows of op­por­tu­nity for min­ers

Finweek English Edition - - INSIDE -

The line from the min­ing sec­tor is that it is al­most in com­plete agree­ment with Govern­ment on pro­pos­als to amend the Min­er­als and Pe­tro­leum Re­sources De­vel­op­ment Act (MPRDA), the sec­tor’s cen­tre­piece leg­is­la­tion. The im­por­tant part of t hat state­ment is t he qual­i­fier, al­most.

Two clauses con­tinue to stick in the craw of the in­dus­try.

One is that any min­ing com­pany seek­ing to ex­port a ‘strate­gic min­eral’ – which can be iden­ti­fied at any time at the dis­cre­tion of the mines min­is­ter – must re­quest per­mis­sion to do so.

The se­cond clause is that the min­is­ter can then sub­ject that min­eral to a twotier pric­ing struc­ture such that do­mes­tic sales dis­counted to the go­ing mar­ket price.

Ac­cord­ing to Peter Leon, head of en­ergy and min­er­als at Web­ber Wentzel and per­haps one of the most out­spo­ken crit­ics of the leg­is­la­tion, these clauses are enough to switch off for­eign in­vest­ment . . . per­ma­nently.

How­ever, there are two op­por­tu­ni­ties to yet in­flu­ence the amend­ments. One is when the Min­er­als Port­fo­lio Com­mit­tee meets again. Ac­cord­ing to mines min­is­ter, Su­san Sha­bangu, the com­mit­tee met on 29 Jan­uary to ap­prove the bill’s draft and for­mally end the pub­lic con­sul­ta­tion phase of the pro­posed amend­ments.

For­tu­nately, at least for the amend­ment’s crit­ics, the com­mit­tee meet­ing was ad­journed and won’t recom­mence un­til 18 Fe­bru­ary. That gives the min­ing in­dus­try valu­able time to con­tinue lob­by­ing for changes to the amend­ment bill.

Then the mat­ter has to go to the Na­tional Coun­cil of Prov­inces, the up­per house of South Africa’s par­lia­ment. Ow­ing to an over­sight in the process of the amend­ment, the coun­cil was not given time to pick over the pro­pos­als.

Ac­cord­ing to Leon, that must still hap­pen, rais­ing the pos­si­bil­ity that the amend­ment bill won’t be pro­mul­gated be­fore na­tional elec­tions, sched­uled for 7 May. If that hap­pens, the bill may be in trou­ble and re­quire fresh vet­ting by the au­thor­i­ties.

Roger Bax­ter, COO of the Cham­ber of Mines, thinks that the bill will progress and doesn’t be­lieve ask­ing the min­is­ter to ex­port min­er­als is a prob­lem. “We do that with di­a­monds and pre­cious met­als al­ready; it’s just an ex­ten­sion of an ex­ist­ing reg­u­la­tion.”

The prob­lem is, how­ever, that Govern­ment isn’t try­ing to ex­ert con­trol over any of those min­ing in­dus­tries in quite the same way.

Ac­cord­ing to Paul Miller, a re­sources banker with Ned­bank Cap­i­tal, Govern­ment is try­ing to re-as­sert ‘ levers’ over the in­dus­try. “Govern­ment knows that it

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