Rushing the Mineral and Petroleum Resources Development Act (MPRDA) amendment bill will have severe consequences for the country’s mining sector, according to Barrisford Petersen, managing director at BBP Law.
“This bill in its current format has significant and complex economic implications for the country,” he said.
The bill, first introduced to the public in December 2012, has yet to be promulgated into law after it was referred back to Parliament by President Jacob Zuma in 2015. In March this year it was referred to the House of Traditional Leaders.
Petersen said uncertainty continued to reign over the current status of the bill and even what draft was being used.
“It is a matter of grave concern as the draft last seen by industry will have a negative impact on the mining industry as it does not introduce regulatory certainty – a prerequisite for investment by mining houses.”
He said it was highly unlikely that changes called for by industry would be made to the bill as the current minister of mineral resources, Mosebenzi Zwane, was on record saying that no wholesale changes would be made and that he disagreed with statements that multinationals were leaving the country because of it.
The bill has been the source of much criticism as analysts, lawyers and mining houses alike have maintained it introduces regulatory uncertainty which is not advisable in a time of low commodity prices.
“How many mining houses are looking at South Africa and not investing because of this bill,” he asked. “We have a country that is under-explored. We need companies to be looking at South Africa as an option, but this will not happen if this bill is passed.”
Petersen said a number of changes would have to be made to the bill if it was going to attract investors into the mining sector which at present includes oil and gas, an industry identified by government through its operation Phakisa initiative as a priority.
“It is critically important that we re-examine the legislation.”
