African Mining Network

AMN was established to develop and build relationships across Africa’s mining community, and give the world a preview of what is happening in mining in Africa.

AMN - Non-COVID-19 challenges to overcome – comment by Yolanda Torrisi

Yol headshot May 2011

The COVID-19 pandemic has thrown up many unexpected challenges to the mining industry in South Africa that will take some time to overcome. There are also a number of other non-COVID-19 challenges to the complex industry that need to be tackled by the government in consultation with the industry.

Without the pandemic mining in South Africa was in a difficult situation with lack of investment, labour issues, rising costs and more difficult mining scenarios. Now, more than ever, there is a need for a unified effort to help ensure mining comes out of the pandemic in a healthier state and more able to contribute positively to the country’s economy.

Among the issues identified as needing to be resolved in the near-term are terms of the Mineral and Petroleum Resources Development Act, 2002 (MPRDA) relating to retrenchments; guidelines for the resettlement of communities surrounding mines; and the ‘once empowered, always empowered’ clause entrenched in the latest version of the Mining Charter.

South Africa’s MPRDA broadly mentions steps to be taken if mining operations are curtailed resulting in retrenchments, however, while the necessary retrenchment steps and actions are adequately and clearly outlined in Section 189 of the Labour Relations Act (LRA), they are not specifically set out in the MPRDA.

There are concerns that the proposed amendments to the regulations pertaining to section 52 of the MPRDA add onerous and prescriptive requirements for mining companies to follow and it appears that these are required to be implemented over and above the section 189 LRA process. Not only are certain requirements over-prescriptive, but there are also several areas that lack clarity and are vague.

The uncertainty over whether the MRPDA process would replace that of LRA Section 189 or if they would run concurrently must be addressed. Also needing an answer is if the outcomes of the two processes differ, who will arbitrate a final outcome along with the timing of the process? Also, the term ‘corrective measures’ is not defined.

While it appears that the proposed amendment of elements within the MPRDA regulations is positive, further clarity is needed sooner rather than later, particularly with COVID-19 adding extra pressure on mining companies about keeping staff.

Another area of uncertainty exacerbated by recent court judgements is that of community issues around mine sites. The judgements have highlighted that the MPRDA does not supersede the rights of communities to make decisions about what happens to their land. They are certain to see more movement towards more sustainable inclusion of communities around mining sites, considering the interests of all affected parties, whether they own or occupy the land.

Although there is now a precedent pertaining to this issue, there are still no definitive requirements within mining legislation, which creates uncertainty for the industry. While the regulator has identified this challenge and attempted to rectify it by publishing guidelines relating to the resettlement of mine-affected communities, it appears that this may be a case of putting the cart before the horse. A solution would be to amend the MPRDA to include the requirement to investigate the resettlement of communities before commencing full-scale mining operations.

While the revised Mining Charter, 2018, in its current form is much more workable that previous iterations thanks largely to the work of current Minister of Mineral and Energy Resources Gwede Mantashe, the fact that it is a policy document and not legislation creates unnecessary uncertainty for the industry, leaving for too much room for interpretation.

Although the Charter says that mining companies could be penalised for non-compliance, the reality is that any punitive measure taken by the minister as a result of non-compliance is likely to be contested in court. The current version of the ‘once empowered, always empowered’ clause applies only to existing mining rights, thereby implying that any application for a renewal of a mining right would require a restructuring of Black economic empowerment structures to meet the requirements of the Charter if the previous levels of empowerment were no longer compliant.

This is being challenged by the Minerals Council of South Africa as a renewal of a mining right is effectively an extension of an existing right, and therefore should not have new or additional expectations added to the applicant. The council is also challenging other sections that are expected to be set aside.

While there are positive moves in the legislative and regulatory environment for the mining industry, and the minister is engaging with stakeholders, further progress is necessary to ensure the industry’s survival beyond COVID-19 along with greater investment in the sector and the country.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent.