2 days ago
Mantashe pulls back on BEE proposals for mining exploration
Exploration is an extremely risky business, and BEE ownership rules on the activity would be a major obstacle to the deployment of capital on this front.
Mineral and Petroleum Resources Minister Gwede Mantashe has changed clauses in the draft Mineral Resources Development Bill (MRDP) that would have imposed BEE requirements on previously exempt exploration companies and projects in the mining space.
The BEE requirements on the high-risk exploration arm of the mining sector provoked backlash from the mining industry, and Mantashe made comments last month that suggested he was not aware that the draft Bill contained such provisions — but if it did, he would correct them.
'Now, and in the future, there's no provision for BEE on exploration,' Mantashe said in late May during a media briefing at the conclusion of the AGM for the Minerals Council SA.
Earlier this week, Mantashe issued an erratum notice to correct the draft and remove the BEE requirements for exploration and prospecting.
'The granting of such rights will further the objects referred to in section 2(d) and comply with the broad-based socio-economic empowerment prescribed elements,' was in the original wording regarding prospecting, but that has now been removed.
South Africa's share of global exploration spend has collapsed from around 5% two decades ago to less than 1% in the face of a range of challenges, including massive applications backlogs that the Department of Mineral and Petroleum Resources hopes to address soon with a new mining cadastre.
Exploration is an extremely risky business, and BEE ownership rules on the activity would be a major obstacle to the deployment of capital on this front.
'The Minerals Council South Africa notes the gazetting of … corrections to the Draft Mineral Resources Development Bill,' said the council, the main mining industry body, in a terse statement.
'The Minerals Council continues to review the Bill amending the Mineral and Petroleum Resources Development Act and we will submit our perspectives within the scheduled timeline of 13 August 2025.'
Overall, the industry is not happy with the Bill, which once again moves the goalposts at a time when investors are crying for certainty in a sector that remains crucial for South Africa's low-growth and high-unemployment economy.
One bone of contention is embedding the Mining Charter into the legal framework, which could again unleash the 'once empowered, always empowered' debate, which the industry has already won in court.
'Once empowered, always empowered' means that once a company meets a threshold for black ownership, it does not have to keep topping up endlessly if black shareholders sell their stakes.
'The Bill in its current form does not encourage or sustain the growth and investment that the mining industry needs to realise its full potential to create employment, stimulate the economy and fulfil its social mandate,' said the Minerals Council. DM
