Unpopular Mining Bill pushes South African mining industry further under the cosh – By Desné Masie
South Africa’s mining industry faces increased pressure from a new mining bill that is proving unpopular with the private sector in particular. South African miners have been under the cosh recently with a spate of top management changes and a wave of industrial action in the wake of the fatal shootings at the Lonmin-Marikana mine last year and fending off rumours of nationalisation to the international investment community. Now the proposed Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill 2013 is being met with considerable criticism from experts who say it would scare off investment, lessen exports, and further deteriorate an already sluggish economy.
South Africa’s opposition party, the Democratic Alliance, says that the Bill will lead to the loss of thousands of jobs as PoliticsWeb reports here. Engineering News writes here that lawyers from top firm Webber Wentzel warn the MPRDA Bill would “exacerbate the difficulties of the current mineral regulatory regime and damage investor confidence in the South African mining industry still further”.
Werksmans Attorneys in Johannesburg have said that while the Bill has many “salutary aspects” there are, however, “certain dramatic aspects … which potentially could have a major impact on stakeholders in the mining industry”. Werksmans identifies the main issues, particularly the potential conflicts between rights holders and the lack of clarity in the bill about who certain sections and definitions relate to and potential elements of price-setting and control which may be at odds with free-market principles.
Other important issues highlighted by Werksmans are that the concept of the Concentration of Rights could create a position of dominant and potentially anti-competitive outcomes, as well as restrictions on export that are unclear and provisions for fines that seem disproportionate.
South Africans have been invited to comment on the Bill this week, which sets out how mining licenses will be awarded, how the environment will be protected from mining activity and aims to increase social development. The debate is sure to be a lively one as mining reform is one of the country’s most contentious issues in business and labour.
Desné Masie manages the RAS business programme.