Modern Mining December 2023

EXPERT VIEW

Could de-regulation be the answer to the zama-zama crisis? By Dominic Varrie: Candidate Attorney at NSDV

 The primary victims of South Africa’s stringent one size fits all mining regulatory system are the local artisanal and small-scale mining entities.  Mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof.  The process takes at least 300 days to obtain a mining right and 180 days to obtain a prospecting right, the process is too hard and costly for juniors.  Minerals Council South Africa estimates that the annual commercial value of illegal mining and illicit dealings in precious metals and diamonds is about R7 billion.  There are between 8 000 and 30 000 illegal miners reported to work in South Africa, including common reports of child labour and other human rights abuses.  Illegal gold mining operations have become a major challenge for legitimate companies, with as much as 5% of South Africa’s annual gold produc tion lost to illicit activities.  Estimates place the illegal mining and export of chrome ore at nearly 1 million tonnes per year – more than 10% of South Africa’s legal chrome output.  2018 junior mining contributed R54 billion to the mining sector, which increased by 63% to R88 billion in 2022.  Ghana has demonstrated the potential of the ASM sector, having legalised small-scale mining in 1989.

Dominic Varrie: Candidate Attorney at NSDV.

As much as 5% of South Africa’s annual gold production is lost to illicit activities. In 2021, the sector employed 60% of Ghana’s min ing work force, about 12% of the country’s popu lation. In 2018, small-scale miners accounted for more 43,1% of total gold production in the country. South Africa is hailed the world over for its min eral wealth and has hosted a thriving large-scale mining industry since the mid-1800s. As a result, the legislation governing mining in South Africa has been meticulously developed and the current framework is undeniably world class, but one could say that over-regulation of the mining sec tor, particularly in regard to the smaller players, may have given rise to some unfavourable consequences for the juniors. Let’s face it, the primary victims of South Africa’s one size fits all stringent mining regu latory system are the local artisanal and small-scale mining (ASM) operations. Section 3(1) of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (MPRDA) states that “Mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans” . This lofty prin ciple is unfortunately not reflected in the operation of the prevailing legislative framework. The process of becoming lawfully entitled to mine in a particular area is long and burdensome. At present, it takes at least 300 days to obtain a mining right and 180 days to obtain a prospecting right. These waiting periods represent the best case scenario and assume that everything goes according to plan, which is seldom the case. The preliminary stages can be incredibly costly, with the intricate prospecting processes, the need for an environmental impact assessment, onboarding of

South Africa is hailed the world over for its mineral wealth.

34  MODERN MINING  December 2023