Windows of opportunity for miners
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