Mantashe backtracks on prospecting empowerment rule in draft mining bill after outcry
Minister Gwede Mantashe has gazetted two corrections to the Draft Mineral Resources Development Bill.
Mineral Resources and Energy Minister Gwede Mantashe at the 2022 African Energy Week at the V&A Waterfront, in Cape Town on 18 October 2022. Picture: @GwedeMantashe1/Twitter
The Money Show's Stephen Grootes gets comment from mining expert Peter Leon, partner at Herbert Smith Freehills Kramer.
Two corrections to the Draft Mineral Resources Development Bill have been gazetted by Gwede Mantashe, Minister of Mineral and Petroleum Resources.
The two contentious clauses concern empowerment requirements for prospecting rights and the ministerial consent requirement for a change of control of listed companies.
Both had been criticised by the mining industry, specifically through the Minerals Council.
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The Council though, says the revised Bill still does not encourage or sustain the growth and investment that the mining industry needs.
Stephen Grootes gets input from mining expert Peter Leon, partner at global law firm Herbert Smith Freehills Kramer (Africa Group).
Leon agrees that Mantashe is likely bowing to 'the inevitable' in the case of the BEE requirements considering the backlash.
However, he does raise the alternative of the Minister simply not having read what was in the draft legislation and explains why this is possible
"After this Bill was published, he spoke at the Johannesburg Junior Mining Indaba and said that empowerment was not a requirement for prospecting rights which was actually completely contradictory to what was in the Bill that he himself had published."
Peter Leon, Partner - Herbert Smith Freehills Kramer (Africa Group)
"One would have thought he'd have read it, but this statement seems to indicate he believed prospecting did not require empowerment . That makes sense from his perspective because when the Mining Charter came out in 2018 when he'd just become minister, empowerment was removed... and he made it clear in that version of the Mining Charter that it would not apply."
Peter Leon, Partner - Herbert Smith Freehills Kramer (Africa Group)
Leon says the requirement for ministerial approval for a change of ownership in a mining company which has now been changed, would certainly have stifled investment.
"It would basically have made the Act operate territorially and also you would had the situation where a government minister could effectively interfere in transactions which are taking place on the stock exchange anywhere in the world, which makes no economic sense."
Peter Leon, Partner - Herbert Smith Freehills Kramer (Africa Group)
Scroll up to the audio player to listen to Leon's analysis