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 [B ]

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-

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-

GENERAL ISSUES 1.NO DISPOSAL OF INTEREST IN A COMPANY OR CLOSE CORPORATION WITHOUT THE MINISTER’S CONSENT Clause 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-

2.NON-ACCEPTANCE OF APPLICATIONS IF ANOTHER PERSON HOLDS A RIGHT, PERMIT OR PERMISSION FOR ANY MINERAL Clauses 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-

3.REQUEST (OPPORTUNITY) TO APPLICANT TO COMPLY PRIOR TO REJECTION OF AND DECISION ON APPLICATIONS Clauses 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-

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-

4.ACCEPTANCE OF APPLICATIONS IF THERE IS A PRIOR APPLICATION Clauses 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-

5.RETENTION OF NEED FOR NOTICE BY APPLICANT TO ANY HOLDER OF A RIGHT Clauses 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-

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-

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-

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-

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-

9.MINISTERIAL PERMISSION TO RECOVER AND DISPOSE OF DIAMONDS FOUND DURING PROSPECTING Clause 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-

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-

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-

11.PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS Clause 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-

11.PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS Clause 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-

11.PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS Clause 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-

12.CURTAILMENT AFFECTING EMPLOYMENT Clause 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-

12.CURTAILMENT AFFECTING EMPLOYMENT Clause 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-

13.INTERNAL APPEALS FROM DECISIONS OF DELEGATES Clause 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-

13.INTERNAL APPEALS FROM DECISIONS OF DELEGATES Clause 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-

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-

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-

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-