Investor uncertainty looms over South Africa's mining sector despite new regulations
Image: GCIS
South Africa's mining sector remains engulfed in investor uncertainty despite the recent gazetting of the Draft Minerals Resources Development Bill of 2025.
The government aims to enhance mineral exploration and bolster international investment through this initiative, but experts have voiced concerns about the existing complexity and lack of clarity that may hinder progress.
South Africa, a major mining hub in the region, has identified platinum, manganese, iron ore, coal, and chrome ore as 'high-critical minerals' under the new Critical Minerals and Metals Strategy.
It has also classified commodities such as gold, vanadium, palladium, rhodium, and rare earth elements as minerals with moderate to high criticality while copper, cobalt, lithium, graphite, nickel, titanium, phosphate, fluorspar, zirconium, uranium, and aluminium were identified as minerals with moderate criticality.
While the Minerals Council on Wednesday said it was in the process of reviewing the new Bill and the new Critical Minerals Strategy, South African mining experts have said there was still investor uncertainty pervading the industry.
'There's still a lot of investor uncertainty, which will only likely be cleared when the actual regulations come,' independent mining policy expert, Sandra Gore, told Business Report on Thursday.
'The mines are highly burdened with obtaining multiple permits across the board and, you know, are often duplicate the approvals needed from separate departments.'
Under the proposed Bill, local beneficiation will be spearheaded by the Minister of Minerals and Petroleum Resources. This was likely to cause some tension with some investors given the large amounts of capital required to set up local beneficiation facilities.
Gore said the issue of local beneficiation was a double edged sword as there was also need for local empowerment and upliftment of communities.
'You don't want the government hauling you in a free markets as to how much you must beneficiate locally,' said Gore.
'But at the same time, you don't want your minerals going overseas to international smelters and this has been also just delegated to regulation levels, so there's no answers on that yet.'
Other experts explained that the new amendments included provisions that aimed to promote local beneficiation by requiring mineral producers to make minerals available for local beneficiation, which in the current state 'is vague and provides too much administrative discretion'.
Partners and consultants at Webber Wentzel said Minister Gwede Mantashe's proposed amendments had dropped references to petroleum and the regulation of the exploration and production of petroleum products.
This was in alignment with the Upstream Resources Development Act 23 of 2024, which, although not yet in force, aims to provide separate regulation of the petroleum industry.
'The Bill includes a somewhat unhelpful definition of 'controlling interest', requiring ministerial consent in terms of section 11 for a change of control in listed and unlisted companies,' said Jonathan Veeran and other experts at Webber Wentzel in a note.
'This requirement could prove impractical for listed companies as stock market transactions are fluid and subject to their own rules and regulations, potentially leading to compliance conflicts.'
They further noted that to address tailing dumps and associated issues that had resulted in the Jagersfontein disaster the new mining Bill was introducing the concept of 'historic residue stockpiles'.
Under this, transitional provisions give mine owners two years to either include the dump/stockpile in its mine works programme by way of an amendment in terms of section 102 or apply for a right insofar as the material is situated outside an existing mining area.
Failure to apply for a right will result in the dump/stockpile reverting to the State. To close the regulatory loopholes associated with old mine dumps, similar amendments have been proposed to the National Environmental Management Act (NEMA).
Visit: www.businessreport.co.za
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
9 hours ago
- Daily Maverick
After the Bell — the strange and ancient enmity between the mining industry and the ministry
When something happens that involves private companies and the government, I'm always interested in what went on behind the scenes. Who was doing what, how did the real negotiation happen and were their drinks hot or cold at the time? Once, many years ago, I happened to find myself in a rather well-appointed lodge somewhere in Mpumalanga. Someone pointed to a particular point at the bar and suggested, almost in hushed tones, that that was where a particular breakthrough happened between the government and the mining industry way back when. I'm not sure, but I suspect the drinks involved had more ice than froth. A lot has happened since then. And I'm sure you remember, as I do, how strange and strained relations between the government and business have been over the years. For a long time, I would go to press conference after press conference, and just get the sense that business was too scared to speak up. In early 2011, fewer than two years after this publication started, a younger and less-thoughtful version of myself even published what I rather grandly called 'A capitalist's letter to Bobby Godsell'. Basically, I felt that business clearly believed it did not have to be a part of the national debate. And since the national debate was changing, I felt it needed to raise its voice. But business is diverse. And a year later, the Black Business Council, under Sandile Zungu at the time, was lobbying the ANC for the creation of a Ministry of Small Business Development. They got their wish. Even if Zungu recently admitted that its performance has been a disappointment. Perhaps the worst point in the relationship between business and government was towards the end of the Jacob Zuma period. According to legend, there was a meeting at some point in 2017 during which business organisations really laid into Zuma – while he had to watch them do it. I have no idea what really happened, and I obviously wasn't in the room. But it does seem that business has lost its innocence. It realised it had to get into the battle, into the court of public opinion. Now, of course, the relationship between business and the government has never been better. We see all sorts of meetings and gatherings and launches. Which is why it's so strange that the ancient enmity between the mining industry and the Mineral Resources Ministry still flares up. Yesterday (Monday, 18 August), the Minerals Council confirmed that it wanted to talk to the Mineral Resources Minister about the new proposals to change the Mineral Resources Development Bill. The council's first reaction had been a lot angrier. And considering that some of the suggestions in this draft bill were clearly ludicrous, it was easy to see why. Even the minister, Gwede Mantashe, realised the idea of forcing companies to have a BEE partner just to qualify for a prospecting right (when there is no guarantee of any money coming to anyone at the end of it) was madness. He withdrew that proposal days after first publishing it. I can understand some of this. It makes sense to me that mining would always be quite difficult politically. This industry, and the economy it created, was possibly second only to the theft of land during the colonial era in creating the racialised inequality we have now. It's kind of hard to forget that. But I find the position of the Minerals Council – that the main aim of the bill should be to incentivise investment – quite compelling. It makes sense to me that we should want our mining sector to grow as much as possible, and basically to create jobs. From what I can see, that is not the priority of the ministry. Now, with the obvious exception of the Health Ministry, it seems the rest of the government is pretty keen on working with business at the moment. And it's obvious that the more jobs are created in the next three years, the better for the ANC in future elections. I know I might get another angry phone call from him for saying this, but I can't help but wonder if this is all about Mantashe. That perhaps he hasn't changed as much as the rest of the ANC is clearly changing. I'm intensely curious about how this is going to go from here. I think the Minerals Council is right about the two big things: we want investment, and they must talk. And they are in a stronger position than business was back in 2011. The power of the ANC has been greatly weakened, people are desperate for jobs, and there are other officials in government who might well give the industry a hearing. Perhaps more importantly, public opinion probably matters more than ever before. I suspect that any breakthroughs this time will not come in a bar in a lodge, the location of which I can no longer remember. I think they might happen in public. And put to bed some of my questions about who met whom, and whether their drinks were hot or cold. DM
IOL News
16 hours ago
- IOL News
Labour inspectors to regain powers to enforce pension fund contributions
Minister of Employment and Labour Nomakhosazana Meth says although the Pension Funds Act required employers to pay contributions within seven days and criminalise non-compliance, many employers continued to default. Image: GCIS Employment and Labour Minister Nomakhosazana Meth said she will restore labour inspectors' powers to enforce compliance by employers to pay pension fund contributions within seven days of deduction from employees' salaries. Meth was responding to parliamentary questions from EFF MP Omphile Maotwe. Maotwe noted that the report by the Financial Sector Conduct Authority (FSCA) revealed that approximately 7,770 employers, including a large number of municipalities and companies in the security and cleaning sectors, failed to pay over pension fund contributions deducted from employees' salaries as of December 2023. She noted that the non-payment resulted in a pension debt of R5.2 billion, affecting over 31,000 workers and severely undermining the implementation of the two-pot retirement system. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Maotwe asked whether the Employment and Labour Department has undertaken any investigations into the implicated employers and the number of labour inspectors assigned to conduct compliance checks. She also enquired about enforcement measures taken against non-compliant employers and measures in place to ensure that affected workers were compensated and/or had their retirement savings restored. In her reply, Meth said she was aware of the serious issue raised in the FSCA's 2023 report regarding failure by companies to pay pension fund contributions deducted from employees' salaries. 'This is particularly evident in the Private Security Sector, where membership in the Private Security Sector Provident Fund (PSSPF) is compulsory, even for non-signatory employers, under the collective agreement of the National Bargaining Council for the Private Security Sector,' she said. Meth said that although the Pension Funds Act required employers to pay contributions within seven days and criminalise non-compliance, many employers continued to default, while the PSSPF also faces delays in disbursing benefits to retrenched or retired members. 'Despite the provisions of Section 34A of the Basic Conditions of Employment Act (BCEA), which mirrors the PFA by requiring employers to pay benefit fund contributions within seven days, labour inspectors are currently unable to enforce this section due to a 2003 Ministerial Determination issued under Section 50(1)(a) of the BCEA.' Meth said the 2003 Ministerial Determination was introduced to prevent regulatory overlap with the PFA. 'This was based on the understanding that the PFA already had its own enforcement and compliance mechanisms in place, including oversight by the FSCA and dispute resolution by the Office of the Pension Fund Adjudicator. The intention was to ensure regulatory clarity and avoid conflicting responsibilities between labour inspectors and financial sector regulators.' Meth also said that despite the regulatory measures to ensure the proper management of the PSSPF, many employers continued to miss deadlines for paying employees' contributions. She further said the PSSPF has struggled to disburse benefits to retrenched or retired members. 'It has, therefore, become sensible for my department to consider how best to protect these workers, and the possibility could be to use the monitoring and enforcement provisions regulated by Section 34A of the BCEA. 'My department is in the process of withdrawing the determination to restore labour inspectors' powers, a proposal that has received the support of all NEDLAC Labour Law Reform Task Team Constituencies.' Meth said her department has introduced amendments to the BCEA aimed at clarifying the enforcement of unpaid contributions and eliminating jurisdictional duplication with the Pension Fund Adjudicator, Commission for Conciliation, Mediation and Arbitration, and Labour Court. The department has also engaged with the FSCA, Office of the Pension Fund Adjudicator, and National Treasury to align efforts and avoid regulatory overlap. 'Once enabled, labour inspectors will be assigned to enforce compliance, and affected workers will be better protected through strengthened oversight, improved fund administration, and legal recourse to recover unpaid pension contributions,' Meth said. Last month, Independent Media quoted Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa as saying that 10 municipalities in five provinces have failed to pay salaries of municipal employees since April this year.
IOL News
18 hours ago
- IOL News
Parks Tau leads South African delegation to boost trade with India
Trade, Industry, and Competition Minister, Parks Tau. Image: GCIS Trade, Industry, and Competition minister, Parks Tau, is set to lead a delegation to Mumbai and Delhi to strengthen trade relations and deepen economic ties between South Africa and India, while also exploring new markets. The visit, from August 25 to 29, is at the invitation of Indian Minister of Commerce and Industry, Shri Piyush Goyal. Tau is also scheduled to attend and speak at the 20th India-Africa Conclave. South Africa's economy is under severe pressure due to a 30% US tariff on its exports and existing domestic protectionism, stifling competition and this dual challenge puts jobs, economic growth, and investment at risk. Tau and the Minister of Agriculture John Steenhuisen recently indicated that they are exploring alternative trade partners to mitigate these impacts. According to the High Commissioner of the Republic of South Africa to India, Professor Anil Sooklal, the relationship with India is not so much about alternatives but also to diversify, so the nation does not rely on one or two trade partners. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ High Commissioner of the Republic of South Africa to India, Professor Anil Sooklal says Indian business is keen on investing in South Africa. Image: Tumi Pakkies/ Independent Newspapers He said this diversification was crucial, especially in light of the recent tariff hikes imposed by the US on South African exports. Sooklal emphasised that "India can ease the US tariff saga" and that Indian businesses are keen on investing in South Africa, seeing it as an entry point to sub-Saharan Africa. India is currently South Africa's fourth-largest trading partner and fourth-largest consumer market. With India expected to become the second-largest consumer market by 2030, the potential for trade growth between the two countries is significant. Sooklal noted that "trade with India can only grow," and the visit would provide an opportunity for South African businesses to tap into the Indian economy. During the visit, Tau and his delegation will focus on several key sectors, including exploring opportunities for collaboration and investment in the mining and minerals sector while strengthening ties in manufacturing, particularly in areas like automotive and pharmaceuticals. Sooklal said the minister would also identify opportunities for cooperation in the energy sector, enhancing trade and investment in agriculture, promoting tourism between South Africa and India and collaborating on pharmaceutical production and trade. Tau will participate in the 20th edition of the India-Africa Conclave, where he will be a speaker at the opening plenary. The conclave provides a platform for Africa and India to engage on trade and economic issues, with over 30 countries confirmed to attend. Sooklal said the conclave is a well-established forum that will facilitate interaction between South African and Indian businesses. During the visit, Tau will also hold bilateral meetings with Indian businesses to further strengthen trade relations between the two countries. 'These meetings will provide opportunities for South African companies to explore new markets and partnerships in India… The visit is expected to yield significant economic benefits for South Africa. 'Indian businesses have already invested heavily in South Africa, with companies like Vedanta, Zinc International and Pepsico operating in the country. Pepsico South Africa now has five factories, while Mahindra South Africa recently inaugurated a new vehicle assembly facility in KwaZulu-Natal…Vedanta employs over 6000 people,' Sooklal said. "With India poised to become an increasingly important player in the global economy, this visit is timely and crucial for South Africa's economic growth and development," said Sooklal. DTIC spokesperson Kaamil Alli did not respond to questions as to who Tau would be taking to India as part of his delegation. Cape Times
