Destroying mining and energy sectors

Controversial changes to South Africa’s
mineral laws have been passed in the
National Assembly, despite warnings that they
could deter investors and damage the
country’s mining and energy industries.
The Mineral and Petroleum Resources
Development Act Amendment Bill included a
raft of regulations that empowered the
Minister of Mineral Resources to take key
decisions. One of the most contentious
aspects of the legislation was a new section,
which would allow the State to have a free
20% stake in all exploration and production
rights.
The government would also be able to buy an
unspecified additional share at “an agreed
price”. This replaced the 30% ceiling on an
additional share acquisition and ‘fair market
value’ clauses that were subsequently
removed.
Mineral Resources Minister Susan Shabangu
told the National Assembly the changes were
vital to bring about transformation in the
industry and change historical ownership
patterns.
“We are resolute in our commitment to keep
the transformation agenda at the centre of
development in South Africa, as contained in
the bill. There can be no sustainable mining
and growth of the industry without going to
the very heart of transformation.”
Shabangu hit back at her detractors in
Parliament.
“We are on the path of changing the mining
and petroleum industry, whether you like it or
not. Change is painful, change is bitter,
especially when you are stuck in the past.
This Act is about the people of South Africa.”
Opposition Members of Parliament (MPs) and
oil and mining companies had warned that
the new legislation created uncertainty and
could push prospective investors to set their
sights elsewhere, at great cost to South
Africa.
The Amendment Bill, which was passed in the
National Assembly with 226 votes in favour
and 66 against, also allowed for the Minister
to have regulatory powers to declare certain
minerals strategic and block exports of them.
Further, it could see producers processing
certain minerals being forced to sell part of
their production to local beneficiators in
prescribed quantities, qualities and timelines
at the mine gate price or at an agreed price.
Democratic Alliance (DA) Mineral Resources
Shadow Minister James Lorimer accused the
African National Congress (ANC) of risking jobs
and tipping the balance in favour of
"cronyism".
“The [Amendment] Bill contains more than 30
instances where key rules will be decided by
regulation. Regulation is decided on by the
Minister of Mineral Resources. It is opaque
and can be changed rapidly. It provides none
of the certainty that investors need and, thus,
will put us in a worse position than we
already are,” Lorimer told the National
Assembly.
The DA intended to fight a motion by the ANC
to suspend Rule 253 of Parliament, which
allowed the legislation to be rushed through
Parliament during this current session. The
National Assembly wrapped up its work this
week so that MPs could start preparing for
the May 7 elections.
The Amendment Bill would be referred to the
National Council of Provinces for concurrence
before being signed into law by President
Jacob Zuma .

Source: m.engineeringnews.co.za/article/controversial-mining-legislation-pushed-through-parliament-2014-03-13/rep_id:3182

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