Modern Mining November 2022

COLUMNIST

South Africa requires urgent reform to kickstart mining By Ross Harvey, director of research and programmes at Good Governance Africa (GGA)

O n 13 October 2022, Reuters reported that South African mining companies were losing $44-million a day in foregone export revenues. A labour strike at Transnet – the state-owned freight and logistics firm – prevented harbours from being able to ship cargo out of the country. The Minerals Council indicated that South Africa exports roughly 476 000 tonnes of bulk minerals a day, but 357 000 of those tonnes could not be shipped dur ing the strike. To add insult to injury, 12 kilometres of cable was stolen during the strike, this at an esti mated cost of $1.33-million. South Africa is becoming an increasingly difficult mining jurisdiction within which to do business. A Fraser Institute Survey of mining investment attractiveness, conducted in late 2021, ranked South Africa in the bottom 10 of the 84 jurisdictions covered. The country ranks just slightly ahead of Venezuela, company one would not ordinarily want to keep. In the last five years, South Africa has fallen from 48 th position (out of 91 jurisdictions covered) to its current position of 75 th (out of 84). Even Tanzania, which faced significant difficulty during the years of late President John Magufuli, ranked - eight places higher than South Africa despite respondents com plaining about excessive taxation. Perhaps most usefully, respondents (mining sector executives in South Africa) indicated that

uncertainty over environmental regulations, along with disputed land claims, were two significant fac tors that did not encourage investor confidence. In my previous column in this publication, I indi cated that the Mineral and Petroleum Resources Development Act (MPRDA) required serious rethink ing, not least for these reasons. By way of example, a 2008 amendment to the MPRDA came into force on 7 June 2013. Never mind the five-year hiatus, the major problem was

Ross Harvey, director of research and programmes at GGA.

that the president at the time, Jacob Zuma, proclaimed certain sections would be excluded from being enacted. One of these was section 38B pertain ing to Environmental Management Programmes (EMPr) and whether these constitute the equivalent of an environmental authorisation under the country’s National Environmental Management Act (NEMA). Helen Acton, a legal researcher at Good Governance Africa, has noted that: “Without a modified and enforced section 38B, there is a legislative vac uum concerning whether holders of prospecting or mining rights obtained under the MPRDA require an addi tional environmental authorisation

Above: The labour strike at Transnet prevented harbours from being able to ship cargo out of the country. Left: South Africa exports roughly 476 000 tonnes of bulk minerals a day.

November 2022  MODERN MINING  37