The end of December 2012 saw Minister Susan Shabangu call for comments on the proposed Draft MPRDA Amendment Bill to be submitted by interested parties and industry stakeholders by 27 January 2013. We have identified several points in the Bill which we think are worthy of comment. We outline a few of these below.

The Draft Amendment Bill appears to contemplate the sub-division of mining and prospecting rights as well as the sale of a portion of the right. However, a proposed amendment to section 11, dealing with the transferability of prospecting and mining rights, will have serious consequences if passed in its current form, since the proposed amendment will prohibit the transfer of any interest in a listed company which holds an MPRDA right. The effect of such a provision will mean that it will not be possible to trade in shares in listed companies which hold MPRDA rights without the Minister's consent.

Secondly, a proposed amendment to section 102, which relates to the amendment of rights, provides that a person mining any mineral under a mining right may also mine and dispose of any other mineral in respect of which he or she is not the right holder, but which must of necessity be mined with the first-mentioned mineral, provided that such person must declare such associated mineral or any other mineral discovered in the mining process. In addition, the amendment provides that the right holder must be notified if a third party applies for a right to such associated mineral.

This proposed amendment seeks to address the issue of associated minerals, which has always been a vexed issue. However, the Bill contemplates allowing a third party to apply for an associated mineral in circumstances where someone else already holds the right to another mineral. There is case law which indicates that a situation which results in two parties fighting over an ore body on the same piece of land would be absurd.  The proposed amendment apparently contemplates precisely that result.

Another concern in the proposed Draft Amendment Bill is the change in definition of 'residue stockpile' to include "historic mines and dumps created before the implementation of this Act", and an amendment to the definition of 'land' to include reside deposits and residue stockpiles. Careful consideration will need to be given to these proposed amendments to ensure that they do not result in an expropriation by removing ownership of historic dumps by vesting the rights in them in the state.

Parliament will have to consider the Bill and any submitted comments before the amendments take effect.  We understand that the Chamber of Mines will prepare comments on the Amendment Bill, but other industry stakeholders are well advised to comment as well. Comments must be submitted to parliament by 27 January 2013

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