Issued by: Chamber of Mines
18 December 2000
MINERALS DEVELOPMENT BILL JOINT STATEMENT BY RICK MENELL, PRESIDENT, AND MZOLISI DILIZA, CHIEF EXECUTIVE, CHAMBER OF MINES
The draft Minerals Development Bill is a substantial document dealing with a wide range of fundamental issues, and requires careful study. The Chamber will offer a considered and detailed response once it has had time to study and debate the document.
When the White Paper, which laid the foundation for the Bill was published, the Chamber noted three critical criteria by which minerals legislation should be judged, in particular in regard to mineral rights.
Our initial understanding of this Bill leaves us with significant concerns in regard to all three of these issues. The Chamber will engage government vigorously but in constructive spirit to ensure that these three objectives are fully met. We are confident that all stakeholders will want us to do so in order to preserve mining as a globally competitive economic activity.
BACKGROUND INFORMATION PROVIDED BY THE CHAMBER OF MINES ON THE MINERALS DEVELOPMENT BILL
The draft Minerals Development Bill provides an eagerly awaited framework which, when approved, will direct the future activities of the South African mining industry.
It is a substantial document covering a broad range of issues. The mining industry, both collectively through the Chamber of Mines and separately, will require time to examine and analyse the draft Bill in order to give its most constructive response.
As we approach the vigorous public debate that the draft bill deserves, it is important to highlight the leading role that the mining industry continues to play in the South African and regional economies:
Recent studies show that over five million South Africans (one in eight) and very large numbers of people in surrounding states receive their primary income directly from the South African mining industry. Most of these people live in poor rural areas and therefore mining is a major ally in the fight against poverty.
The mining industry has remained a significant job creator in recent years, apart from the gold mining sector. The gold mining industry is actively involved with government and unions in finding effective ways of developing income generating activities for the many who have lost their jobs during the painful restructuring of the industry over the last ten years.
Mining provides 40% of South Africa's exports directly, and 10% more indirectly through closely associated beneficiated products.
The mining industry is an engine for growth, with billions of rands of capital expenditure currently being committed to new production facilities in several sectors including diamonds, platinum, chrome and ferrochrome, manganese and gold. Further billions of rands of potential projects are under active consideration.
The mining industry provides a base for internationally competitive support industries in South Africa including technology, equipment manufacturing, professional services and low-cost electrical power generation.
It is therefore vitally important to the national interest that the business of mining in South Africa be regulated in a way that preserves the competitive nature of the industry. Legislation must provide the most appropriate environment for mobilizing the capital and other resources needed to continue to exploit the country's great mineral wealth to the benefit of all South Africa's people.
In seeking to achieve the best possible regulatory regime, the industry recognises the State as the custodian of the nation's mineral resources. These resources are a national asset and in this sense belong to all South Africans. This custodianship must be exercised in a way that promotes the key principles outlined below which support continued success in this critically important industry.
Furthermore, the Government's agenda to broaden and change the racial profile of ownership and management of the mining industry is now understood and accepted by the members of the Chamber of Mines, following much discussion and interaction since will before the publication of the White Paper in 1998. Several industry initiatives to advance this agenda are underway.
It remains the mining industry's conviction that to preserve a competitive and growing mining sector which will benefit all South Africans and support an orderly and successful transformation, new legislation must entrench provisions which achieve the following:
Set objective criteria for the granting of mineral rights with continuity of tenure from prospecting through life-of-mine operations, with the minimum of administrative and political latitude and with right of appeal to an independent judiciary.
These benefits are as important to new entrants to the industry as to existing participants.
Preserve the stability and continuity of ownership of existing prospecting and mining operations.
Provide transitional arrangements for achieving the "use it and keep it" principle announced by Government which acknowledge the Constitutional property rights of existing private owners of mineral rights and properties.
Preserve a fiscal regime that is clear, transparent, internationally competitive and non-discretionary that will continue to promote investment in the mining industry.
Legislation that promotes these fundamental principles will be strongly supported by the mining industry. It is the duty of the industry to all its stakeholders to engage in an energetic and challenging debate on any dilution of these principles. Our common goal must be to achieve a regulatory environment which supports a competitive and growing mining sector that will serve all South Africans into the future.