Min­ing reg­u­la­tory en­vi­ron­ment ‘a mess’

The Star Early Edition - - NEWS - Di­neo Faku

THE TWO-day Ju­nior Min­ing Ind­aba which be­gan in Jo­han­nes­burg yes­ter­day high­lighted how South Africa’s de­te­ri­o­rat­ing reg­u­la­tory regime and neg­a­tive in­vest­ment sen­ti­ment was sti­fling growth for smaller houses.

The an­nual event is seen as an op­por­tu­nity for ju­nior min­ers to find so­lu­tions to prob­lems rang­ing from lack of funds, reg­u­la­tory un­cer­tainty to at­tract­ing in­vest­ment, de­spite the sub­dued global eco­nomic growth out­look.

How­ever, the ab­sence of gov­ern­ment of­fi­cials on the pro­gramme was the lat­est in­di­ca­tion of the trust deficit be­tween in­dus­try and the gov­ern­ment.

Del­e­gates heard how even with the im­mi­nent gazetting of the min­ing char­ter, the in­dus­try would not like­lyre­store its for­tunes.

Paul Miller, Min­ing Fi­nance, Cor­po­rate and In­vest­ment Bank­ing, Ned­bank Cap­i­tal, said it was go­ing to take more than gazetting the min­ing char­ter to bring sta­bil­ity to South Africa’s ail­ing min­ing in­dus­try. He told the more than 300 ex­plor­ers, de­vel­op­ers and in­vestors at the ind­aba that the reg­u­la­tion had been ham­strung by ac­tivist gov­ern­ment of­fi­cials who had po­lit­i­cal mo­tives when ap­ply­ing the law.

“The min­ing char­ter gives too much dis­cre­tion in the hands of of­fi­cials in the De­part­ment of Min­eral Re­sources (DMR) in the re­gional of­fices,” said Miller.

“The prob­lem with the char­ter is that of­fi­cials in re­gional of­fices in­ter­pret the rules dif­fer­ently and you can­not get rid of that,” Miller said, adding that South Africa had been over­taken by coun­tries like Tan­za­nia, and Botswana as favourite in­vest­ment des­ti­na­tions.

“South Africa is per­ceived as a no go area for projects be­cause in­vestors think their min­ing projects will be stolen be­cause of the reg­u­la­tory en­vi­ron­ment,” Miller said.

Jacinto Rocha, a di­rec­tor at the Min­eral In­vest­ment Ad­vi­sory Ser­vices and for­mer di­rec­tor-gen­eral of the DMR said that the reg­u­la­tory sys­tem was in­ef­fi­cient.

Hulme Sc­holes, a di­rec­tor at Malan Sc­holes, said that the reg­u­la­tory en­vi­ron­ment was a mess.

“We are sit­ting with a mess. We have reg­u­la­tion that cre­ates con­fu­sion. We have weak lead­er­ship which is not able to make de­ci­sions,” he said, re­fer­ring to the de­lay in the re­lease of the char­ter.

The Cham­ber of Mines, which rep­re­sents 90 per­cent of min­ing houses, has pre­vi­ously com­plained that the new ver­sion of the char­ter which is ex­pected to be made into law next week has un­re­al­is­tic tar­gets. It also said pre­vi­ously it would go to courts if the min­ing char­ter was not in line with ex­pec­ta­tions.

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