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Minerals bill: More delays expected

Cape Town – Legal and mining experts warned that amendments to the Mineral and Petroleum Resources Development Act (MPRDA) are still not in line with the Constitution, which could delay its implementation once again.

The National Council of Provinces (NCOP) hosted public hearings in Parliament on Wednesday to give interested parties an opportunity to give input on the amendments.

Representations were made by the Chamber of Mines, the Institute of Race Relations (IRR), legal firm Webber Wentzel and the National Union of Mineworkers (NUM) among others.

Michael Dale, director at Norton Rose Fulbright, who made a representation on behalf of the Chamber of Mines, warned that certain sections of the Bill as they currently stand are still in contravention of the Constitution, particularly the provision that allows the mines minister to control the export of minerals by designating certain minerals for beneficiation.

The Chamber of Mines noted that the National Assembly’s portfolio committee on mineral resources passed the MPRDA without attending to the president’s reservations about the constitutionality.

“But the Chamber agrees with the President that these issues need to have been addressed,” Dale said. Not giving effect to them could mean that the President could go to the Constitutional Court for a declaratory order, which could lead to further delays.”

Another concern that the Chamber highlighted was the provision in the MPRDA that would elevate the Mining Charter to legislation.  “It offends the separation of powers between the legislature (Parliament) and the minister,” Dale said. “It means a minister could make, amend or repeal legislation.”

He pointed out that Zuma also raised concerns about the MPRDA’s inconsistency with international trade obligations if the minister has the power to restrict the quantity of minerals available for exports. International trade agreements, such as the General Agreement on Tariffs and Trade (GATT) and a number of World Trade Organisation measures will be contravened if this provision is passed.

Anthea Jeffery, who made a submission on behalf of the IRR, also raised alarm over the inclusion of the Mining Charter in the MPRDA Bill, pointing out that it goes against the separation of powers.

She also pointed to other constitutional concerns, which are not keeping with the rule of law.

“There are clauses in the Bill that are too vague and give too few guidelines to the minister, such as too much discretion in decision about designating minerals,” she said.

The new offences clauses in the Bill are also worrying, stating that companies can be fined 10% of annual turnover and its directors may be imprisoned for up to four years if the company fails to promote optimal economic growth or fail to promote the development of downstream beneficiation industries.

Manus Booysen, partner and head of the mining, energy and natural resources practice at Webber Wentzel, said in his submission that the only way to lure investment is to create a regulatory framework that is conducive to investment.

He warned that prospecting is pivotal to growth in the mining industry and that prospectors need to be incentivised for taking the risk by being allowed to progress to a mining right.

The tender system proposed in the MPRDA amendments on which prospecting rights will be granted will eliminate that incentive for prospectors and junior miners which is a major concern, Booysen said.

He agreed with the Chamber of Mines and the IRR that the mines minister’s powers to decide over beneficiation are too wide. “It would interfere with the fundamental economic principles,” Booysen said.

The MPRDA Bill was passed in the National Assembly on November 1 2016 and was then referred to the NCOP for further deliberations and consultations with communities at provincial level.

The Bill was initially passed by Parliament in 2014, but President Jacob Zuma declined to sign it into law and referred it back to Parliament, citing concerns about the Bill’s ability to pass constitutional muster.

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