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SA: Statement by the Parliamnet of South Africa, Portfolio Committee on Mineral Resources holds public hearings on proposed Amendment Bill (13/09/2013)

13th September 2013

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This week, the Portfolio Committee on Mineral Resources held its first round of public hearings on the Minerals and Petroleum Resources Development Amendment Bill.
 
Day one of the public consultation process received written and oral submissions from  Anadrko, ExxonMobil, Impact Oil and Gas Limited and OPASA. The presentations submitted by the stakeholders in the mining sector expressed concern on the proposed Bill. The Bill seeks to amend and remove ambiguities that exist in the Mineral and Petroleum Resources Development Act, 2002 as amended by the Mineral Resources Development Amendment Act, 2008.

The Bill  provides for the regulation of associated minerals, partitioning of rights and enhance provisions relating to beneficiation of minerals; promotion national energy security; streamlining administrative processes; aligning the Mineral and Petroleum Resources Development Act with the Geoscience Act, 1993 as amended by the Geoscience Amendment Act, 2010. The Bill also seeks to provide for enhanced sanctions; improvement of the regulatory system; and provision for matters connected therewith.
 
Mr Sean Lunn from Impact Oil and Gas Limited said the proposed amendments will affect how international companies within the petroleum industry invest in the country. “South Africa has some of the world’s most treacherous seas which increase the inherent risk for the oil and gas industry where only 20% of all ventures succeeds even in good conditions. Companies are willing to invest vast sums of money in South Africa as the rewards will benefit both the industry and the country. This scenario however only relies on the current legislation and not the proposed amendments,” added Mr Lunn.
 
The Bill in its current form creates uncertainty for the industry, said Mr Lunn. “The disbandment of the Petroleum Association of South Africa (PASA) will provide the tipping point for the industry. Oil and gas companies will simply shift their focus to other global opportunities that provide the desired level of certainty,” he added. Members of the Committee questioned the importance of retaining PASA as an independent regulator. The Committee added that when there is a fair market regulatory environment, the risk to companies is reduced.
 
Acting Chairperson of the Committee, Ms Faith Bikani welcomed the comments and views that were expressed during the hearings. “We are conscious of the efforts stakeholders have made to engage with the Bill and to explain their concerns or agreements with aspects of the proposed changes to the mining law. Mining law reform is a complex process and an enormous challenge in a country like South Africa which relies so heavily on mining for exports and employment. It is also made more difficult and important by the need to address the historical legacy of mining,” said Ms Bikani.
 
One of the proposed amendments in the Bill state that the Minister of Water and Environmental Affairs should be the appeal authority for decisions taken by the Minister of mineral Resources on environmental authorisation applications or environmental management programs relating to areas in which prospecting, exploration, mining or production takes place. The Bill seeks to arrange that the client will have a one-stop-shop where all the permissions for water, mining and the environment will be processed in parallel,” said Ms Bikani.
 
Ms Bikani furthermore noted the inconsistencies of the Bill which provides for a mineral component, including the petroleum component. However, she said that the issue of who reports to energy and who reports to mineral resources will need to be addressed. The hearings continue on Wednesday next week (18 September).  The Committee received over 700 pages and 46 submissions which will be considered by the Committee once all comments are made. Issues raised by various companies include oil and gas issues, the environment, land mining communities and public participation and the quality of the regulatory regime.
 

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