The Minerals Council South Africa has called for amendments to the Mineral and Petroleum Resources Development Act (MPRDA) to remove investment barriers and introduce harsher sanctions for illegal mining.
Speaking at the Investing in African Mining Indaba in Cape Town on Wednesday, the council’s senior executive for public affairs and transformation, Tebello Chabana, stressed the need for clearer definitions of illegal mining in the law to facilitate stricter enforcement.
“There needs to be greater clarity and stronger legal backing for law enforcement. Currently, there is no explicit crime for mining or transporting a truckload of chrome, for instance. We must define these offences properly and attach criminal sanctions,” Chabana said.
He pointed out that prosecuting illegal miners merely for trespassing was ineffective, as it allowed offenders to easily post bail and return to their activities.
Minerals Council CEO Mzila Mthenjane echoed these concerns, adding that illicit trading, border management issues, and weaknesses in enforcement needed to be addressed within the revised legislation.
Mthenjane also highlighted the need for clearer provisions regarding mining permits and Black Economic Empowerment (BEE) ownership requirements. He noted that vendor-financed BEE deals often eroded shareholder value, particularly in high-risk exploration projects.
“The minister has stated that BEE ownership is not a strict requirement in vendor financing deals, but this needs to be explicitly written into law to ensure clarity for administrators and investors,” Mthenjane explained.
He stressed that the disconnect between public statements by the minister and the legal framework had created uncertainty, which the revised act should address.
Mthenjane expressed optimism about the potential of renewable energy to ease the pressure on Eskom’s grid and power the mining sector.
“We have 90 renewable energy projects in the pipeline, worth an estimated R275 billion. These could contribute up to 16GW of renewable energy, which would significantly alleviate pressure on the national grid and support economic growth,” he said.
Regarding mineral resources minister Gwede Mantashe’s proposal for a commodity-linked electricity tariff to shield mining companies from steep price hikes, Mthenjane said the council was open to discussions.
The council also underscored the urgent need for a functional cadastral system to streamline mining licence applications. Mthenjane urged the government to establish a centralised, efficient system to speed up the process and attract investment.
“We need government departments to be better aligned and create a one-stop shop for investors to facilitate exploration and mining projects,” he said.
Despite commitments from the government, Mthenjane noted that progress in coordinating different departments to support the mining sector remained insufficient.
