Introduction

Following the commencement of certain provisions of the Mineral and Petroleum Resources Development  Amendment Act, No. 49 of 2008 (the 2008 MPRDA Amendment Act), the South African Cabinet approved  the Mineral and Petroleum Resources Development Amendment Bill (the Bill) at the end of May 2013,  for tabling in Parliament. The draft Bill was published for comment in December 2012.

The stated purpose of the Bill is to amend the Mineral and Petroleum Resources Development Act as  amended by the 2008 MPRDA Amendment Act; remove ambiguities that exist within the Act; provide for  the regulation of associated minerals; partitioning of rights and enhancing provisions relating to  beneficiation of minerals; promote national energy security; streamline administrative processes;  align the MPRDA with the Geoscience Act, 1993; provide for enhanced sanctions; improve the  regulatory system; and provide for matters connected therewith.

Associated Minerals

he proposed amendments aim to improve the situation regarding associated minerals. The proposed  definition of “associated mineral,” includes any mineral that occurs in mineralogical association  with, and in the same core deposit as, the primary mineral being mined in terms of the mining  right, where it is physically impossible to mine the primary mineral without also mining the  mineral associated therewith.

However the ability to lawfully mine associated minerals is subject to compliance with the proposed  requirements set out in the proposed amendments to section 102 of the MPRDA. The proposed  amendments include the insertion of section 102(3), which provides that any right holder mining any  mineral under a mining right may, while mining such mineral, also mine and dispose of any other  mineral in respect of which such holder is not the right holder, but which must of necessity be  mined with the first mentioned mineral provided that the right holder declares such associated  mineral or any other mineral discovered in the mining process. Inclusion of Historical “Dumps,” Residue Stockpiles, and Residue Deposits The proposed amendments also include residue stockpiles and residue deposits, under the ambit of  the MPRDA, together with historic “dumps.”

The proposed amendments include changes to the definition of “land” which will include residue  deposits and residue stockpiles. The proposed amendments to the term “mine” also include specific  reference to residue deposits and residue stockpiles.

It is also proposed that the term “residue stockpiles” be included in the definition of “mining  operation.”

In addition to specifically incorporating residue stockpiles and residue deposits in the various  definitions, the proposed amendments include a new right that must be applied for namely a  “reclamation permit,” which must be applied for and obtained in terms of proposed section 42A of  the MPRDA.

To ensure that historic “dumps” are included, the term “residue stockpile” will be amended to  include historic mines and dumps created before the implementation of the MPRDA.

Beneficiation

The term “beneficiation” is to be amended to mean the transformation, value addition, or downstream  beneficiation of a mineral to a higher value product, over baselines to be determined by the  Minister, which can either be consumed locally or exported.

The proposed amendments to section 26 of the MPRDA include that the Minister must initiate or  promote beneficiation of minerals in the Republic, and that the Minister shall, from time to time,  by notice in the Gazette determine such percentage per mineral commodity and the developmental  pricing conditions in respect of such percentage of raw minerals, as may be required for local  beneficiation, after taking into consideration the national interest. It also places an obligation  on producers to offer a percentage of minerals to local beneficiators, and to empower the Minister  to determine both the percentage of production and the development of pricing conditions at which  it should be disposed of after taking into account national interest. Regulations and guidelines will be  developed setting out the criteria to be used by the Minister to determine the levels of beneficiation, relevant percentages, and developmental pricing  conditions.

The Principle “First Come First Served” Will No Longer Apply

The Bill proposes the deletion of section 9 of the MPRDA, which provides for the “first come first  served” principle in relation to applications for rights, and its substitution with a provision  that the Minister may by notice invite applications for rights. The Minister will be granted the  right to periodically invite applications by notice in the Gazette. The stated purpose is that the  invitation process will ensure coordinated quality approvals by the department that meaningfully  contribute towards the fulfilment of the objects of the MPRDA.

Partitioning of Rights and Ministerial Consent — Section 11 and 102 of the MPRDA

The Bill proposes a new subsection, which provides that a right or a part of a right (prospecting  right or mining right), may be ceded, transferred, encumbered, let, sublet, assigned, or alienated  with Ministerial Consent, and subject to such conditions as the Minister may determine. The current  provisions of section 11(1) of the MPRDA do not make provision for partitioning of rights.

Increased  Sanctions

The Bill proposes amendments to section 99 of the MPRDA, and proposes a change from specified  fines, to fines based on a percentage of the right holder’s annual turnover in the Republic and its  exports from the Republic during the preceding financial year. The percentages are between five and  10 percent, depending on the nature of the offence. Where it is not possible to establish the  recent annual turnover of any offender, maximum fines are specified.

Time Frames

Relevant time frames in the MPRDA will be amended, to reflect time frames as prescribed by the  Minster, from time to time. The Bill states that the time frames will be prescribed and fixed in  the Regulations. It also states that the time frames will not detract from the standard practice of 30, 60, and 90 days, where applicable.

Conclusion

The 2008 MPRDA Amendment Act introduced significant changes. The Bill proposes to implement  further, far reaching changes, which must be carefully considered by stakeholders