Decision on MPRDA Amendment Bill is still imminent

By on October 30, 2014

At the beginning of October 2014, Mineral Resources Minister Ngoako Ramatlhodi assured that President Jacob Zuma’s decision on whether or not to sign the controversial Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill would be announced within weeks. However, Zuma said he is still waiting on final advice before he signs the Bill into law, or back into Parliament. 

The MPRDA Amendment Bill’s legislation declares a central focus of improving regulation of the country’s mineral resource exploitation in its sustainability, ensuring the MPRDA adheres with the Geoscience Amendment Act 2010, aligning the provision of rights to allow the partitioning of rights, streamlining administrative processes, and addressing shortfalls within the administration.  Furthermore, the ANC stated it would fortify government-business relationships and add to job creation.

The Bill was first passed by Parliament in early 2014 and was then sent to Zuma for approval. Ramatlhodi advised Zuma in June to delay his decision as he felt that Parliament had rushed the process to have the Bill passed before the 2014 elections, and it may not align with the constitution.

More serious, however, is the resultant risk of a large investment loss with passing of this Bill, according to News24. The Bill would allow government a 20 percent free-carry interest in petroleum rights, but a further participation clause could potentially grant the state access to the other 80 percent as well. If investors see that their billion-dollar investments are being taken up by government, the country would feel a detrimental loss of investment.

The DA has dubbed the MPRDA Amendment Bill as the “job-killing mining bill” and has voiced strong concerns in opposition to its signing. Former DA Parliamentary leader, Lindiwe Mazibuko, and the DA’s shadow Minister of Mining, James Morimer, have said the Bill had a number of fatal drawbacks. The move from a first-come-first-served allocation of mining rights to auctioning them off, and the control the MPRDA would have over oil and gas are concerns that need to be considered.

“All that will happen,” Lorimer said, “is the power of the minister and her officials will increase. If you annoy the minister, you won’t get your mining right.”

Zuma has also received recommendations that the Bill be returned to Parliament from Henk Smith of the Legal Resources Centre and Dr Wilmot James of the DA. Zuma is waiting for National Assembly Speaker Baleka Mbete’s response before he makes his final decision.

The uncertainty elicited by this legislation wouldn’t be a good start to the Bill’s future implementation should it passed. However, only the coming weeks will tell what South Africa’s next step will be, and whether the MPRDA Amendment Bill will turn out to be gold or gravel.

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