AMN - South Africa mining legislation will take long time to settle - comment by Yolanda Torrisi

Peter Leon, who has been a guest speaker and attendee at The African Mining Network, always provides valuable insights into the mining industry. Here he provides insights into the Minerals Petroleum and Resources Development Act.

South Africa’s mining legislation is taking a long time to settle and there are concerns that the amendments on the table may discourage foreign investors.

Peter Leon, who now is at Herbert Smith Freehills, says the very fact that the mining act has taken this long to be passed is as much a deterrent to investors as the content of the act itself.

In recent media Peter Leon was reported saying: “It is open to discretion and unclear rules make it very difficult to invest with that level of uncertainty and that is the long and short of it.”

The reports continued: The lawyers say the sticking points of the amendments include too much discretionary power given to ministers that should be left with Parliament. They also point out that an amendment to create so called ‘strategic minerals’ could also cause problems. Minerals likely to be designated as strategic - like iron and coal needed for South Africa's steel industry - could be subject to price controls and export restrictions from the state. This could lead to complaints to the World Trade Organisation that free trade is being threatened.

Earlier this year South Africa's President Jacob Zuma sent the bill back through the legislature because of these concerns and fears that the amendments may infringe upon the Constitution.

One of the developments that came out of this, described as very positive by the mining lawyers, came from the lips of the national council of traditional leaders. They recommended that the mining rights be regulated and issued not by government, nor private business, but by an independent body.

- Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com