Minerals and Petroleum Resources Development Bill Briefing to the Portfolio Committee on Minerals and Energy 26/10/2001

Introduction 19/09 - Cabinet approved introduction of Bill into Parliament; 26/09 – DME refers Bill to SLA for certification Draft Bill still with SLA Purpose is to give broad overview of the draft Bill

Introduction cont’d Chapter 1 – Definitions Chapter 2- Fundamental Principles Chapter 3 – Administration Chapter 4- Minerals and Environmental Regulation; Chapter 5 – Minerals and Mining Development Board Chapter 6- Petroleum Exploration and Production Chapter 7 – General and miscellaneous

Introduction cont’d Schedule 1 – Laws repealed Schedule 2 – Transitional Arrangements Chapter 8 –Diamond Chapter has been removed – new Bill being drafted – Precious Metals and Diamonds Bill

Administration (Chapter 3) Minister has executive and political authority – All original powers vest in the Minister; Minister grants rights and approves EMPs; DME to play supporting role to the Minister Director- General designates officers to perform function of Regional Managers; Minister can delegate powers – c 101; Administration of Act founded on principle of administrative justice Empowers Minister to divide the country into regions

Fundamental Principles (Chapter 2) Objectives remain the same Mineral resources are part of the national patrimony; State is the custodian Promote equitable access; Promote empowerment – BEE and Community Create jobs Security of tenure for prospecting and mining operations

Fundamental Principles Environmental Protection Ensure companies contribute social upliftment of communities; Prospecting and mining rights are registerable, transferable and bondable and entitles holders to – Access the land; Prospect and mine for minerals; Remove and dispose of minerals; and Other ancillary rights.

Mineral and Environmental Regulation (chapter 4) Firs-come-first-serve applies Consultation with i&ap’s from the beginning Applications lodged at regions; Granting of rights based on stipulated criteria Applicant must comply with granting criteria

Minerals and Environmental Regulation Criteria – The Minister must grant prospecting right if – Applicant has access to finance and technical ability; Estimated expenditure is compatible with prospecting work programme; Prospecting will not damage the environment Applicant can comply with Mine Health and Safety Act; and Application will promote empowerment and create jobs

Minerals and Environmental Regulation Holders of rights have exclusive entitlement to apply and be granted - Renewal of its rights; and new right Imposes performance obligations on holders of rights Promotes access to information; Created mining permit for small scale miners Strict environmental compliance requirements

Minerals and Environmental Regulation Promotes beneficiation; Advances the interests of HDP’s Balances interests of landowner and that of holder of rights; Establishes early warning system in the event of downscaling; Provides for security of tenure; Discretionary powers removed where appropriate

Minerals and Environmental Regulation Category of rights and permits Prospecting right – 5 years, renewable 3 years Mining right – 30 years, renewable Retention permit – 3 years, renewable 2 years Mining permit – 2 years renewable 1 year

Minerals and Mining Development Board (chapter 5) Plays crucial role in advising the Minister – Sustainable development of mineral resources Transformation of the industry Human resources development of the industry Broadly representative of stakeholders Independent from the Department Funded by moneys appropriated by Parliament Board must establish Regional Mining Development and Environmental Committees

Petroleum exploration and production (Chapter 6) Deals with upstream petroleum industry; Petroleum Agency to perform function of Regional Manager Rights and Permits – Exploration right - Production right Reconnaissance permit; Technical co-operation permit

General and Miscellaneous (Chapter 7) No major changes Provision for access to the courts; Internal appeal; and Right to take dispute to court Transformation of the industry Housing and living condition; Guideline for transformation of industry Code of good practice Appointment of contractor – holder or right must ensure contractor complies with the law

Transitional Arrangements (Schedule II) The objectives are to - Guarantee security of tenure for prospecting and mining operations; Give holders of old order rights opportunity to comply; and Promote equitable access of the nation’s mineral resources

Transitional Arrangements Three categories of rights Old order prospecting right’ – 2 years Old order mining rights – 5 years Unused old order right – 1 year Old order prospecting and mining rights will be converted into prospecting rights or mining rights, respectively Unused old order right must apply for prospecting rights or mining rights

Transitional Arrangements Sunset clause for companies who do not pay royalties to any body Communities continue to receive royalties if – Development plan; Proper financial controls; Money is being used for community development; and Royalties is used for the benefit of all members of the community Individuals will continue receiving if – Stoppage will cause hardship; Royalties being used for social upliftment

Conclusion Old order New dispensation Private control over access to mineral resources Fragmented Security of tenure No statutory performance requirements New dispensation Public control over access to mineral resources Consolidation Security of tenure Statutory Performance requirements

Conclusion Old order New dispensation No ready access to information Frustrates grass roots exploration by new entrants New dispensation Access to information guaranteed Promotes and facilitates new investment in the minerals and mining industry