Miningweb: Three questions for Gwede Mantashe about his new Mining Bill - Anthea Jeffery
Key topics:
Bill increases mining fines and prison terms, expanding 16 offences.
Greater risk of mining rights being suspended or cancelled.
Bill likely deters foreign investment, halting SA mining resurgence.
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By Anthea Jeffery*
In 2024 mining exploration spending in South Africa dropped to R779.5m, the lowest figure since 1993. This paltry sum, as investment banker Paul Miller notes, is a small proportion (about 10%) of “the R6bn–R8bn per year” in exploration spending that is needed to sustain and expand the faltering mining industry.
The R779.5m invested was also “less than half” (adds Mr Miller), than the R1.6bn figure attained in 2018, when Gwede Mantashe was appointed minister of mineral and petroleum resources – and began promising to restore South Africa’s share of global spending to the 5% level where it had stood in 2003. Every year, however, that 5% target – first set by him in 2019 – keeps retreating further.
Against this background – and having now studied Mr Mantashe’s draft Mineral Resources Development Bill of 2025 (the Bill) and sent in a written submission on it in mid-August (see here) – the IRR has three key questions for the minister.
Will South Africa get more direct mining investment of any kind by threatening the directors of mining companies with ten years in prison for the long list of offences the Bill creates? Or by threatening mining companies with fines big enough to bankrupt them? Or by greatly expanding the circumstances in which mining rights can be cancelled or suspended?
Bigger penalties for more offences
Under the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, current penalties for the single offence listed in the statute are relatively minor at a maximum fine of R100,000, imprisonment for up to two years, or both.
Under the Bill, by contrast, the maximum fine for a person convicted of a listed offence will rise from R100,000 to “10 percent of the person’s or right holder’s annual turnover in the Republic and its exports from the Republic during the person’s or right holder’s preceding financial year”. The maximum prison term will increase from two years to ten years.
Moreover, under the present MPRDA, the only listed offence is a failure to provide adequate “information and data in respect of mining or processing of minerals”. Under the Bill, by contrast, “any person is guilty of an offence if he or she…contravenes or fails to comply with” any one of the 16 sections it lists. The Bill adds that its new penalties are to apply to “any person convicted of… an offence referred to” in this extended list (emphasis supplied by the IRR).
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The most important of the new offences to which the new penalties apply include: (the underlined words show the additions made by the Bill) :
failing to “implement social and labour plans in areas in which [mining companies] are operating, including labour sending areas”;
failing to comply with “the requirements of section 100(3)(b)”, which gives the minister the power, in granting mining rights, to “impose” onerous black economic empowerment (BEE) obligations on issues ranging from “ownership, inclusive procurement, [and] supplier and enterprise development” to “employment equity and mining community development”;
failing, as “a producer of minerals”, to “make available minerals or mineral products for local beneficiation”; and
failing, “despite the issuing of a closure certificate”, to take responsibility for “any latent or residual environmental liability, pollution, [or] ecological degradation…which may become known in the future”.
Among the 16 listed sections is one obliging every person to “comply with the [relevant] provisions of this Act, any other relevant law and the terms and conditions of the mining right”. The Bill deletes the word “relevant” in square brackets, making the provision still more sweeping. How far the Bill’s oppressive fines and potential prison terms could stretch under a catch-all clause incorporating an unspecified number of additional statutes is impossible to tell.
Greater risks of mining rights being cancelled
Once the Bill has extended the number of listed offences from one to 16, there will also be greater risks that mining rights might be suspended or cancelled.
Under the current section 47 of the MPRDA, “the minister may cancel or suspend” any mining right if, among other things, its “owner or holder…(a) is conducting any…mining operation in contravention of this Act; [or] (b) breaches any material term or condition of such right”. The Bill leaves this wording unchanged. However, by creating many more offences, it may well make it easier for the minister to justify the suspension or cancellation of mining rights.
To take but one example, if a cash-strapped mining company fails fully to “implement” its social and labour plans in both its mining and labour sending areas, the minister might decide that it is “conducting [its] mining operations in contravention of the Act” or is “in breach of” a “material condition” of its mining right.
Section 47 provides various safeguards against the summary suspension or cancellation of mining rights and these will continue to apply. For example, the minister must give reasons for any proposed suspension or cancellation and invite affected mining companies to make representations to him. Under the current statute, they must be given a “reasonable opportunity” to do so. Under the Bill, “a period of 30 days” will be allowed.
Receding hopes of a mining resurgence
Against the background of this Bill, the minister’s professed wish to bring exploration spending in South Africa back to 5% of the global total rings increasingly hollow. If anything, the Bill seems calculated to ensure that this will not occur.
The Bill will also make it harder for South Africa to reverse its long decline on the authoritative Annual Survey of Mining Companies compiled by the Fraser Institute, a civil society organisation in Canada. The Fraser Institute’s mining index measures the comparative merits of more than 80 mining jurisdictions around the world. In doing so, it examines the attractiveness to investors of both their geological mineral endowment and their mining policies.
Since the MPRDA came into force in 2004, South Africa’s ranking on the Fraser Institute mining index has steadily decreased. In 2024 the country went down once again, making it the 68th most investable mining jurisdiction out of the 82 surveyed. It scored particularly badly (in 70th place out of 82) on investor perceptions of the attractiveness of its mining policies. This ranking placed South Africa among the bottom ten countries in the world.
Not surprisingly, the Minerals Council South Africa, which represents some 90% of the industry, has rejected the Bill and seems intent on testing the constitutionality of many of its provisions in the courts. Various commentators have also warned strongly against Mr Mantashe’s proposed measure, saying it will put paid to any hopes of a mining resurgence.
James Lorimer MP, Democratic Alliance spokesperson on mineral and petroleum resources, warns that the Bill, if adopted in its current form, “will effectively end the already tottering case for foreign investment in South African mining”.
Peter Major, a veteran mining analyst and director of mining at Modern Corporate Solutions, puts it more strongly still, saying the Bill “doesn’t have one redeeming feature to attract any investment, local or foreign”.
*Dr Anthea Jeffery holds law degrees from Wits, Cambridge and London universities, and is the Head of Policy Research at the IRR. She has authored 12 books, including Countdown to Socialism - The National Democratic Revolution in South Africa since 1994, People’s War: New Light on the Struggle for South Africa and BEE: Helping or Hurting? She has also written extensively on property rights, land reform, the mining sector, the proposed National Health Insurance (NHI) system, and a growth-focused alternative to BEE.
This article was first published by Daily Friend and is republished with permission