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State scrambles to amend mining clauses

Cape Town - The government has confirmed that eleventh-hour changes were made to an amendment to mining legislation that has alarmed the already embattled industry.

Mineral resources official Trevor Hattingh said a proclamation was published on Thursday negating provisions of the 2008 amendments to the Mineral and Petroleum Resources Development Act, which finally took effect on Friday.

"It is correct, but at this point we are not certain which provisions were held back," Hattingh said.

However, mining law expert Peter Leon from Webber Wentzel told Sapa two of the most problematic provisions of the law amendment have been excised, granting the industry a partial reprieve.

These were the prohibition of adding new areas to existing mining or prospecting rights, and the requirement of ministerial consent for changes in the shareholding of mining companies, both listed and unlisted.

"Obviously what was done later takes some of the sting out," he said but added that the law changes were still of concern to the industry.

Mining companies were now confronted with a new regulatory regime as per the amendment law, that would be in place until a 2012 amendment bill, which was due before parliament next month, became law.

"The industry has not had time to comply with it," Leon said of the 2008 law enacted on Thursday.

The 2008 amendments were widely regarded as flawed and not enacted for years. But last week President Jacob Zuma signed them into law on the advice of state legal advisers, because the new amendments had been written as if the earlier changes had in fact become law.

Fred Gona, the chairperson of parliament's mineral resources portfolio committee, said he was aware of the proclamation added at the last minute, and had requested a copy.

"We know it happened, but we still have to see the documents. We are not aware which aspects were changed."

Gona said the committee was in a peculiar position, because it had no influence on the 2008 legislation, which was drafted by the previous parliamentary dispensation.

Government is believed to have been spurred into damage control last week amid intense lobbying by industry representatives and warnings that the new law would exacerbate negative investment sentiment.

Mining experts said it was at odds with government's reassurances that it saw the need for stability in the industry.


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