Mineral and Petroleum Resources Development Act: Department briefing

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
16 March 2005
MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT: DEPARTMENT BRIEFING

Acting Chairperson: Mr C Molefe (ANC)

Documents handed out:
Mineral and Petroleum Resources Development Act: An Overview
Minerals and Energy Laws Amendment Bill [B1-2005]
Minerals and Energy Laws Amendment Bill: briefing (23 February 2005)

SUMMARY
The Committee met for a background briefing by the Department on the Mineral and Petroleum Resources Development Act, 2004, as it would soon be amended by the Minerals and Energy Laws Amendment Bill, 2005. The Department had briefed the Committee on the amendment bill on 23 February 2005, but it had been decided that an overview of the principal Act would be useful for Members when considering the amendment bill. The amendment bill will be formally considered in April.

MINUTES

Department briefing
Adv. M Mononela, Department Chief Director: Mineral Development and Administration, conducted the briefing. He reminded Members that the Mineral and Petroleum Resources Development Act (MPRDA), promulgated on 1 May 2004, recognised that minerals were non-renewable and part of the national patrimony; it provided for environmental protection, sustainable development and the promotion of local and rural development; affirmed the State’s commitment to transformation and the eradication of discrimination; reaffirmed the State’s commitment to security of tenure and emphasised the need for a competitive and efficient regulatory regime for mining.

The objectives of the Act included recognition of the right of the State to exercise sovereignty over mineral resources; giving effect to State custodianship of mineral resources; promoting equitable access to mineral resources; guaranteeing security of tenure for prospecting and mining operations and ensuring social responsibility.

In essence, the Act provided that the State would in future control and manage access to mineral resources by superseding the common law principles relating to the private ownership of mining-related rights. These rights would be replaced by limited real rights to land and minerals. However, no prospecting or mining would be allowed in the absence of the State extending such limited rights to applicants. These rights were transferable provided that the intended holder could execute the obligations associated with the right, could comply with the social plan criteria, were a competent applicant and could carry out the associated environmental obligations. The Act provided for prospecting rights, mining rights, mining permits and retention permits in cases where mining was not immediately economically viable.

The Act further provided for the establishment of the Minerals and Mining Development Board that would advise the Minister of Minerals and Energy on the sustainable development of minerals, transformation of the mining industry and dispute resolution. The Board consisted of representatives from government, civil society, organised business and organised labour.

The Act provided for a transitional period during which holders of "old order" rights could convert their rights to "new order" rights. Certain time limits were imposed on the conversion process. Prospecting rights had to be converted within two years; mining rights (linked to existing operations) had to be converted within five years and holders of unused rights had one year to apply for a prospecting or mining right. All "old order" rights would cease to exist at the expiry of the above conversion periods. All new applications for prospecting or mining rights would be dealt with in terms of the Act.

Ms M Raboshakga, Legal Officer, reminded Members that they had been briefed on the Minerals and Energy Laws Amendment Bill on 23 February. She did not repeat the briefing, but it is worth noting that the bill aimed to correct two mistakes that had accidentally appeared in the promulgated MPRDA. First, the Act wrongly repealed Section 3(1)(o) of the Deeds Registries Act, 1937 that dealt with the registration of servitudes. This meant that persons intending to register servitudes could no longer do so as the enabling provision had been repealed and the Deeds Office was unwilling to continue registration in an atmosphere of legal uncertainty.

The second mistake was that all references to "mineral rights" had been retained in the Deeds Registries Act even though these rights had ceased to exist on 1 May 2004 when the MPRDA came into effect. Further, the retention of these references meant that owners who had converted their rights since that date had not been able to register them with the Mining Titles Registration Office.

Adv. Mononela concluded the briefing by adding that the Department intended submitting other, more substantive amendments to the MPRDA after the above mistakes had been rectified.

Discussion
Members were somewhat perplexed by the Department briefing as it essentially did not add anything of substance to the meeting of 23 February. Some Members were under the impression that the Department would present the more substantive amendments to the MPRDA at this meeting.

Mr Molefe indicated that the Committee would formally consider the bill in April. This led to Mr H Schmidt (DA) asking whether the April meeting would deal with the proposed technical amendments, and not the substantive ones. He also asked if the Department would deal with an apparent problem of alignment between the Mining Charter and the Department of Trade and Industry’s Code of Practice in terms of Black Economic Empowerment (BEE) legislation at the April meeting.

Adv. Mononela stated that the Department would formally present the technical amendments to the Committee in April. If more substantive amendments had been finalised by then, they would be informally presented. He explained that the Code of Practice contained in the Broad-Based Black Economic Empowerment Act (administered by DTI) had to be applied to all sector charters; whether already in existence like the Mining Charter or not. He was uncertain whether the amendments dealing with the realignment of the Mining Charter would be ready by April.

Mr E Ngcobo (ANC) appeared to sum up the feelings of most Members when he commented that the Department had not presented any progress or developments since the meeting of 23 February. This, he argued, made it impossible to ask any new and meaningful questions of the Department.

Adv. Mononela said it appeared as though there had been a misunderstanding between the Department and the Committee as the Department thought Members wanted only an overview of the MPRDA at this meeting. He nevertheless felt that the overview briefing would be very useful when the Committee formally considered the amendment bill in April.

The meeting was adjourned.