Precious Metals Bill: Department Response to submissions

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Mineral Resources and Energy

25 October 2005
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Meeting Summary

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Meeting report


25 October 2005

Chairperson: Mr E Mthethwa (ANC)

Documents handed out:
Minister of Minerals and Energy presentation
Department of Minerals and Energy presentation
Precious Metals Bill [B30-2005]

The Minister of Minerals and Energy and representatives of the Department of Minerals and Energy (DME) presented responses to the recent public hearings on the Precious Metals Bill. Officials provided background on the intentions of the legislation and the reasons for its introduction. The government sought to promote the local beneficiation industry and create employment opportunities. Certain definitions were clarified and all companies were expected to comply with empowerment requirements. A synopsis of proposed amendments was provided.

Members asked certain questions including whether the creation of a regulator within one specific piece of legislation was untidy, problems associated with compliance with empowerment legislation, the rationale behind the one-stop-shop approach and striking a balance between company confidentiality and access to information.

Minister of Minerals and Energy presentation

Ms L Hendricks stated that no formal submissions had been received from gold mining companies regarding the Bill. The legislation intended to regulate other sectors of the mining industry such as platinum. South Africa contained 40% of global gold reserves. The government intended to increase the local beneficiation industry to promote employment and establish a regulator to monitor the industry. Broad-based socio-economic empowerment remained a key priority that the Bill would facilitate. Clarity on important definitions was provided and certain re-definitions were required. The legislation sought to promote broad-based participation in terms of permit allocation. Companies would be allowed a two-year period of transition to adapt to the new legislation. All companies had to comply with the pending legislation despite the objections of certain companies. Black participation within the industry remained a priority.

Department of Minerals and Energy presentation
Mr A Mngomezulu (Deputy-Director-General) provided a clause-by-clause synopsis of the Bill that focused on proposed amendments.

Adv H Schmidt (DA) noted that the creation of an industry regulator for two different industries in one specific Bill was untidy and it necessitated cross-references to different pieces of legislation. A Bill should be able to be read on its own. He asked for clarity on the value of a General Beneficiation Bill that contained reference to a regulator. The industry intended to comply with state policy objectives but certain companies pointed out problems in acquiring sufficient levels of technical skills from amongst the previously disadvantaged population groups.

The Chairperson referred to one company that clearly objected to Black Economic Empowerment directives due to the technical nature of their business. The Committee had had to stress the need for empowerment compliance during the public hearing. A balance was required between sufficient levels of confidentiality for companies and respect for access to information.

The Minister concurred that certain companies had voiced objection to BEE imperatives during hearings. The issue had to be dealt with as a priority and the industry was required to transform in the short term.

Adv Mononela (Chief Director) stated that the reasons for two pieces of legislation had to be explained in relation to the historical context. The Mining Rights Act had been administered in the past by various role-players on an individual basis. The intention of the present legislation was to rationalise activities and create certainty for participants in the process. The present system involving the regulator was cumbersome and efficiency was a prerequisite. The intention was to create a one-stop-shop for applicants. All information submitted to the Department would be treated in a confidential manner.

Mr Mngomezulu stated that a general beneficiation process was required for all resource commodities available in South Africa. The Bill would not lead to a duplication of current processes.

Adv Schmidt asked for clarity on the one-stop-shop notion and whether all services such as those provided by the Receiver of Revenue and the South African Police Services would be included in the new system.

Adv Mononela replied that all applications lodged with the Department would be sent to all relevant offices for processing. A visit to other Departments by applicants would not be necessary. Any need for further consultation on the part of applicants would be removed by the pending legislation.

The Chairperson stated that the Bill was not as intense in terms of potential conflict issues as previously expected. The Bill would be deliberated and adopted at the next meeting.

The meeting was adjourned.


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