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CHAMBER OF MINES OF SOUTH AFRICA COMMENTS TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON MINERALS

CHAMBER OF MINES OF SOUTH AFRICA COMMENTS TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON MINERALS AND ENERGY ON THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT AMENDMENT BILL [B10-2007]. ENVIRONMENTAL PROVISIONS (1) Alignment to NEMA EIA draft Regulations

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CHAMBER OF MINES OF SOUTH AFRICA COMMENTS TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON MINERALS

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  1. CHAMBER OF MINES OF SOUTH AFRICA COMMENTS TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON MINERALS AND ENERGY ON THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT AMENDMENT BILL [B10-2007]

  2. ENVIRONMENTAL PROVISIONS (1) • Alignment to NEMA EIA draft Regulations • Mining remains a “listed activity” • MPRDA to be the primary legislation regulating environmental management in the mining industry • One EIA process preferred • Renewal of environmental authorisation -2-

  3. ENVIRONMENTAL PROVISIONS (2) • Financial provision - Options - Trust funds - Concurrent vs final rehabilitation - Premature closure vs planned closure • REMDEC - Time frames • Closure certificate - Sign off - Administrative bottlenecks -3-

  4. GENERAL ISSUES • 1. NO DISPOSAL OF INTEREST IN A COMPANY OR CLOSE CORPORATION WITHOUT THE MINISTER’S CONSENTClause 7(a): s11 • EXISTING PROVISIONS s11(1): controlling interest • PROPOSED IN BILL Clause 7(a): any interest • EXAMPLE Disposal of 15% or 26% • THE ISSUE - Administrative burden - Criteria for consent • CHAMBER SUBMISSION Need to devise a materiality threshold -4-

  5. 2. NON-ACCEPTANCE OF APPLICATIONS IF ANOTHER PERSON HOLDS A RIGHT, PERMIT OR PERMISSION FOR ANY MINERALClauses 11(a), 17(a), 22(b), 59(a) & 63(a) as applied to ss16(2)(b), 22(2)(b) & 83(2)(b) respectively • EXISTING PROVISIONS s16(2)(b) etc: accept If no other right for the same mineral is held • PROPOSED IN BILL Clause 11(a) etc: accept if no other right for any mineral is held • EXAMPLE Chrome and platinum in same or separate seams • THE ISSUE Timing: should be resolved not on acceptance/rejection but on grant/refusal • CHAMBER SUBMISSION Retain existing reference to same mineral -5-

  6. 3. REQUEST (OPPORTUNITY) TO APPLICANT TO COMPLY PRIOR TO REJECTION OF AND DECISION ON APPLICATIONSClauses 55(c), 11(b), 17(b), 22(d), 59(c) & 63(c) as applied to ss16(3), 22(3), 27(4), 79(3) & 83(3) respectively • INTRODUCTION s6(1) MPRDA, s3 PAJA, s33 Constitution: lawfulness, reasonableness, procedural fairness • EXISTING PROVISIONS ss16(3) and 17(3) etc: no opportunity to remedy prior to rejection or refusal • PROPOSED IN BILL Clause 55(c) but not clause 11(b) etc: will allow opportunity to remedy -6-

  7. 3. REQUEST (OPPORTUNITY) TO APPLICANT TO COMPLY PRIOR TO REJECTION OF AND DECISION ON APPLICATIONS (cont…) Clauses 11(b), 17(b), 22(d), 59(c) & 63(c) as applied to ss16(3), 22(3), 27(4), 79(3) & 83(3) respectively • EXAMPLE A page missing from application • THE ISSUE - effect on ranking - fair and reasonable procedure • CHAMBER SUBMISSION Apply clause 55(c) arrangement throughout: afford opportunity to remedy prior to all rejections and refusals -7-

  8. 4. ACCEPTANCE OF APPLICATIONS IF THERE IS A PRIOR APPLICATIONClauses 11(c) & 22(e) as applied to ss16(4)(b) & 27(5)(b) respectively • EXISTING PROVISIONS s16(4) etc: after application accepted, applicant notified to consult and to submit environmental management programme • PROPOSED IN BILL Clause 11(c) etc: retain existing provisions but amend in regard to environmental authorisations • EXAMPLE Five successive applications • THE ISSUE Potential unnecessary duplication in effort and cost • CHAMBER SUBMISSION Subsequent applicants not be obliged to consult or lodge environmental authorisation until prior applications have been refused -8-

  9. 5. RETENTION OF NEED FOR NOTICE BY APPLICANT TO ANY HOLDER OF A RIGHTClauses 11(c) & 22(e) as applied to ss16(4)(b) & 27(5)(b) respectively • EXISTING PROVISIONS s16(4)(b) etc: applicant must consult with landowners, occupiers and other affected parties • PROPOSED IN BILL Clauses 11(c) and 22(e): no consultation with other affected parties • EXAMPLE Holders of rights under the Act • THE ISSUE s6(1) MPRDA, s3 PAJA, s33 Constitution: right to be heard • CHAMBER SUBMISSION Retain consultation with holders of rights -9-

  10. 6. EMPOWERMENT REQUIREMENT FOR PROSPECTING RIGHTS FOR PRESCRIBED MINERALS Clause 12(c): new s17(1)(f) • EXISTING PROVISIONS s17(4): Minister may request applicant to give effect to empowerment objectives by reference to mineral type and extent of project • PROPOSED IN BILL Clause 12(c): In respect of prescribed minerals, applicant must have given effect to empowerment objectives • THE ISSUE - Proposed project: no flexibility - Prescribed minerals? • CHAMBER SUBMISSION - Allow possibility of exemption - List minerals in Act -10-

  11. 7. EXCLUSIONARY ACTS, FAIR COMPETITION, AND CONCENTRATION OF RIGHTS TO THE RELEVANT MINERAL: Clauses 12(d) and 27: ss1, 17(2)(b) and 33(c) Exclusionary Act, Fair competition, Concentration, generally • EXISTING PROVISIONS ss17(2)(b) and 33(c): refusal of prospecting rights and retention permits • THE ISSUE Constitutionality • CHAMBER SUBMISSION - Delete definition of exclusionary act - Refer to unduly impeding objects in s2 - Delete concept of concentration -11-

  12. 7. EXCLUSIONARY ACTS, FAIR COMPETITION, AND CONCENTRATION OF RIGHTS TO THE RELEVANT MINERAL: Clauses 12(d) and 27: ss1, 17(2)(b) and 33(c) (cont…) Concentration of rights • EXISTING PROVISIONS ss17(2)(b)(iii): concentration of mineral resources • PROPOSED IN BILL Clauses 12(d) and 27: concentration of rights granted • EXAMPLE - workable proposition • THE ISSUE Concentration of rights not a suitable criterion • CHAMBER SUBMISSION - Retain reference to mineral resources - Refer to the mineral in question -12-

  13. 8. CONFIRMATION FROM COUNCIL FOR GEOSCIENCE ON RENEWALS OF PROSPECTING RIGHTS Clause 13(b): new s18(2)(e) • EXISTING PROVISIONS s18(2): Written application for renewal requires submission of particulars within control of applicant • PROPOSED IN BILL Clause 13(b): Requires confirmation by Council for Geoscience: outside control of applicant • EXAMPLE Renewal on last day • THE ISSUE Renewal must be lodged without confirmation from third party: continuity of tenure • CHAMBER SUBMISSION Require confirmation before grant of rather than on application for renewal -13-

  14. 9. MINISTERIAL PERMISSION TO RECOVER AND DISPOSE OF DIAMONDS FOUND DURING PROSPECTINGClause 15: s20(2) • EXISTING PROVISIONS s20(2): Ministerial permission necessary for prospector to remove bulk samples of minerals • PROPOSED IN BILL Clause 15: Ministerial permission necessary for prospector to remove any diamonds during prospecting • THE ISSUE - Not clear when and how permission must be sought - Risk of mining in the guise of prospecting • CHAMBER SUBMISSION - Provide for permission in Prospecting Right - Permission not to extend beyond removal of bulk samples of diamonds -14-

  15. 10. BENEFICIATION Clauses 1(a) and 21: s26 • INTRODUCTION Mining # manufacturing • EXISTING PROVISIONS s26: beneficiation generally • PROPOSED IN BILL Clause 21(b): prescribed levels of beneficiation • EXAMPLE - Obligations beyond capacity - Certain industries, e.g. diamond industry, already regulated • THE ISSUE - Harm to mining sector and no benefit to manufacturing sector - Criterion for applications for mining right • CHAMBER SUBMISSION - Delete final stage of beneficiation in definition in clause 1(a) - Delete clause 21(b): no prescribed levels of beneficiation -15-

  16. 11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS Clause 41: s49(1) s49(1): Representations • EXISTING PROVISIONS s49(1): representations from stakeholders • PROPOSED IN BILL Clause 41: no representations from stakeholders • EXAMPLE Grant of uranium rights to be prohibited, yet no representations from uranium mining industry • THE ISSUE s6(1) MPRDA, s3 PAJA, s33 Constitution: lawfulness, reasonableness, procedural fairness • CHAMBER SUBMISSION Retain invitation for representations from stakeholders -16-

  17. 11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONSClause 41: s49(1) (cont…) s49(1): Strategic Minerals • EXISTING PROVISIONS s49(1): reference to national interest and promotion of sustainable development • PROPOSED IN BILL Clause 41: add reference to strategic nature of mineral • THE ISSUE - Meaning of “strategic” - Broad discretionary powers • CHAMBER SUBMISSION - Define “strategic” - Provide for Parliamentary supervision -17-

  18. 11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONSClause 41: s49(1) (cont…) s49(4) • EXISTING PROVISIONS ss16(6) and 22(5): invitations for applications • PROPOSED IN BILL Clause 41(b): invitations for applications on terms and conditions determined by Minister • EXAMPLE Totally different terms and conditions • THE ISSUE - Overriding discretion - Power for Minister to legislate - Inequality of terms and conditions • CHAMBER SUBMISSION - Delete the proposed provision or at least the reference to terms and conditions - Provide for Parliamentary supervision -18-

  19. 11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONSClause 41: s49(1) (cont…) s49(2) • THE ISSUE Adverse effect on security and continuity of tenure of holders of existing rights: renewals and higher rights • CHAMBER SUBMISSION Amend s49(2) to preserve rights of existing holders -19-

  20. 12. CURTAILMENT AFFECTING EMPLOYMENTClause 42:s52 • EXISTING PROVISIONS - Profit to revenue ratio less than 6% for 12 months (s52(1)(a)) - Retrenchment of 10% or more than 500 employees within twelve months (s52(1)(b)) s52(1)(a): Profit to Revenue Ratio • PROPOSED IN BILL Clause 42: 3 months • THE ISSUE - flow of notices - external factors • CHAMBER SUBMISSION Retain reference to 12 months -20-

  21. 12. CURTAILMENT AFFECTING EMPLOYMENTClause 42:s52 (cont…) s52(1)(b): Retrenchments • PROPOSED IN BILL Clause 42: labour force likely to be retrenched • THE ISSUE Onerous • CHAMBER SUBMISSION Retain existing provision -21-

  22. 13. INTERNAL APPEALS FROM DECISIONS OF DELEGATESClause 69(a): s96(1) s96(1) • EXISTING PROVISIONS s96(1): no reference to appeals from delegates • PROPOSED IN BILL Clause 69(a): appeals from delegates • EXAMPLE Types of delegation: - deconcentration: no appeal: MPRDA - deconcentration: appeal • THE ISSUE - appeal to DG, thence to Minister, thence judicial review: costly, protracted, contrary to objects of Act - applications to court to compel or to exempt - extensive delegations of powers • CHAMBER SUBMISSION Delete appeals from delegates and provide the opposite, namely no appeals from delegates -22-

  23. 13. INTERNAL APPEALS FROM DECISIONS OF DELEGATESClause 69(a): s96(1) (cont…) s96(2) • EXISTING PROVISIONS s96(2): appeals do not suspend decisions • PROPOSED IN BILL Clause 69(b): appeals to suspend subsequent applications • THE ISSUE Judicial reviews also to suspend subsequent applications • EXAMPLE Judicial review instituted but thereafter subsequent application granted • CHAMBER SUBMISSION Expand s69(2)(b) also to provide that judicial reviews suspend subsequent applications -23-

  24. 14. ALIGNMENT OF DEFINITION OF HISTORICALLY DISADVANTED PERSON Clause 1(j): s1 and para 2 of Mining Charter • EXISTING PROVISIONS - s1: “historically disadvantaged person” - Mining Charter: “Historically Disadvantaged South Africans” • PROPOSED IN BILL Amendment in regard to juristic persons • THE ISSUE Lack of uniformity • CHAMBER SUBMISSION Change definition in s1 to be a definition of historically disadvantaged South Africans -24-

  25. 15. PROPOSED NEW TRANSITIONAL PROVISION Clause 89: Schedule II • EXISTING PROVISIONS Schedule II: transitional provisions from old system to MPRDA • PROPOSED IN BILL Clause 89: No transitional provisions from MPRDA to MPRDA as amended by Bill • EXAMPLE - Appeals and reviews - Pending applications for conversion of old order mining rights; undertaking or documentary proof? - Existing beneficiation overseas: ministerial approval? -25-

  26. 15. PROPOSED NEW TRANSITIONAL PROVISION (cont…) • EXAMPLE (cont.) - Existing approved environmental management programmes to be regarded as environmental authorisations? - Pending applications for approval of environmental management programmes: old or new rules? • THE ISSUE AND THE CHAMBER SUBMISSION - Transitional provision that anything done or acquired under unamended MPRDA is deemed validly done or acquired under amended MPRDA: compare item 10(1) Sch II - Transitional provision that pending applications be adjudicated under unamended MPRDA provisions: compare item 3 of Sch II -26-

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