South Africa divided over controversial mineral law reforms

South Africa divided over controversial mineral law reforms

The controversial and highly opposed new mineral law is now in President Jacob Zuma's hands.

South Africa’s new mineral resources law, which is awaiting President Jacob Zuma’s signature, faces growing opposition as the mines minister voiced his opposition to changes including in the controversial mineral and petroleum resources regulation.

Mineral Resources Minister Ngoako Ramatlhodi, who was sworn in last month, told the Financial Times (subs. required) he had already advised the presidency not to sign the amendments bill, approved by the parliament last March.

Ramatlhodi added the bill should be put on hold until lawmakers address some clauses. Another option, he suggested, would be to draft a bill for oil and gas, separate from mining.

The planned and semi-approved changes to the 2002 Mineral and Petroleum Resources Development Act include giving the state a stake of 20% in new gas and oil exploration and production ventures.

The new law also lets the state to acquire an unspecified additional share at an “agreed price,” giving the mines minister the right to dictate which minerals are strategic for South Africa and so force producers to process a portion of their output domestically instead of exported in raw form.

Mining and oil companies have warned the approved changes will discourage investment in the country as it violates international treaties. They have also say the new law would give the mines minister too much regulatory discretion, disregarding the constitutional provisions on property rights.

The new Democratic Alliance parliamentary leader, Mmusi Maimane, called Zuma to withdraw the bill. According to IOLNews, the opposition party believes the parliament-passed changes run counter to the government's stated intention of boosting the economy and promoting small business development.

“I challenge [Zuma] to withdraw the Mineral and Petroleum Resources Development Amendment Bill, the Promotion and Protection of Investment Bill (which does nothing of the sort), the Property Valuation Bill, the Expropriation Bill and the Infrastructure Development Bill.

“All of these bills contradict the National Development Plan, undermine the economy and job-creation,” he was quoted as saying.

While mining has been a core activity of South Africa’s economy for over a century, gas and oil exploration is just emerging. The nation is Africa’s largest coal and gold producer and the world’s biggest supplier of platinum and chrome.

Image from Wikimedia Commons.