Mining industry needs more carrot and less stick

Scrap the Mining and
Petroleum Resources
Development
Act (MPRDA)
Amendment Bill and start
again.
This is the advice from
Peter Leon, a partner at
Herbert Smith Freehills, to the
minister of mineral resources,
Mosebenzi Zwane.
He said
going ahead
with the act
as well as the
publication
of Mining
Charter Three
in its current
format would
be a mistake.
Industry has
yet to reach
consensus with
government over the contents of
the two documents, with many
believing the new legislation
and the mining charter will
not attract investors to South
Africa’s mining industry.
“I want to say to Minister
Zwane: Let’s have a fresh start,”
said Leon. “At the moment it
is all stick and no carrot for
mining in South
Africa. The
problem in South
Africa is that
the discussions
are not correctly
framed.”
He said
government
continued to
make more and
more demands
on industry.
“Commodity prices have been
declining and mining has been
under pressure. Government is
taking but not giving.”
Leon said the lack of
regulatory certainty and
predictability was at the heart
of the crisis in South Africa.
“Chile is one of the best
mining examples in the
world. Thanks to mining
it is no longer a developing
country,” he said, attributing
the growth in its mining
sector and economy to
the fact that the Chilean
government had taken a clear
approach.
“The mining code is
straightforward and clear.
It is set in stone and is
extremely predictable.
There is no uncertainty for
companies mining in Chile.
At the same time the mining
jurisdiction and the awarding
of mining licences is not in
the hands of bureaucrats
or politicians but lies in the
hands of the court. With that
the conditions to get a licence
are clear.”
While Zwane has said that
the legislation and mining
charter will be finalised by
June at the latest, there is
scepticism.
“Last year at the Mining
Indaba he said they were
in the process of finalising
the MPRDA as a matter of
urgency. It is a year later and
it is still stuck in parliament.
My view is that the bill
should be withdrawn as there
is no way it can be amended.”
IINSERT
Government is
taking but not
giving.
– Peter Leon