Mining investors

Urgent need to streamline regulatory framework

Urgent need to streamline regulatory framework
The application process for applying for prospecting and exploration rights in South Africa is cumbersome and time consuming and the process needs to be streamlined to encourage local mining investments.
According to Chris Stevens, Director at Werksmans Attorneys, this inability to easily access a central registry to ascertain what ground is open for prospecting or exploration further impedes local investment in the mining industry. There is also often inefficiency in the way that applications are processed in regard to aspects such as changes of control and renewals, which also tend to stifle investment in the industry.
“If you look at Western Australia, for example where the systems are efficient, open and transparent and juxtapose that with SA where not only is the shortage of government administrative skills a problem, but the working of the Mineral and Petroleum Resources Development Act itself is problematic. If you look at the Act itself there are no time limits for government departments to process but there are time limits for requesting businesses.”
“If you examine other African countries like Botswana and Tanzania they also operate very efficiently in processing applications while further afield other emerging economies like Chile and Peru in South America also turn around applications more promptly.”
Nevertheless, Stevens says it’s not all doom and gloom as the MRDA Act is in the process of being amended which is currently before the parliamentary portfolio committee. He says this will hopefully address these time limits so they are more equitable, with limits also then being prescribed for state departments and ministers, to speed up application processing overall.
Stevens says most of the exploitable minerals in SA have been taken up but increasing skill levels at government level would improve how efficiently we use mineral resources locally.
“We also need to ensure that other aspects of our mining sector are adequately addressed such as infrastructure. We need to control the cost of electricity and also roll out efficient railways to transport minerals from inland mines to the coast as affordably as possible.”
Stevens concludes that our main challenge is to open up and streamline the application process to encourage mining investors and to create an accurate and easy to use central registry to further speed up the mineral application process. Stevens will be speaking at the upcoming 2013 Joburg Indaba on “Investing in Resources and Mining in Africa” taking place next month.
According to mining industry observers, the mining industry has long been plagued by policy uncertainty and slow, overly complex bureaucratic processes. Getting through all the local red tape can be a slow and expensive process, which can spook investors who then look to other, easier mining countries to invest.
Industry observers agree with Stevens that there needs to be less red tape in departments dealing with mineral rights and a more collaborative approach so that backlogs of mineral rights can be registered more efficiently.
SA also needs a more efficient and up to date commercial database that can show a potential overseas investor where our open ground is. If someone in Australia for example wanted to find a goldmine in SA they would not be able to but investors can look on a database and find open ground easily in Mozambique. This needs to change in order to encourage mining industry investment.
There also needs to be co-ordinated investment in infrastructure like rail and electricity for example around mineral nodes within the country. Industry experts say if you look at Limpopo there are iron ore, platinum and chrome deposits there which cry out for special attention as a development node and Eskom and Transnet need to work together to upgrade rail infrastructure in these mineral rich node areas.
State entities are forced to be profit driven but at the same time they are monopolies with little competition in the marketplace, making infrastructure end products inefficient and expensive and development averse to new  private mining industry.
Mining experts attest that we need a more collaborative and consolidated approach to mining with policy certainty and procedural efficiency leading to more competitive pricing and creating more mines and more jobs for the nation’s overall benefit and prosperity.
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This edition

Issue 42