South Africa
Legislation
- Mineral Resources and Petroleum Development Act 2002 (as amended)
- MPRDA Regulations 2004 (as amended)
- National Environmental Management Act 1998 (as amended)
- NEMA EIA Regulations 2014 (as amended)
Regulatory Risk Rating
Regulatory Risk
Regulatory Corruption Risk
Regulatory Corruption Risk
Corruption Exposure Risk
Corruption Exposure Risk
| Regulatory Risk Rating Factors | Risk Level |
|---|---|
| First Come / First Serve | Subscribe |
| Application Criteria | Subscribe |
| Duration | Subscribe |
| Right to Renew | Subscribe |
| Competing Licences | Subscribe |
| Mineral Coverage | Subscribe |
| Right to Mine | Subscribe |
| Criteria for Mining Rights | Subscribe |
| Tenure | Subscribe |
| Surface Rights | Subscribe |
| Government Take | Subscribe |
| Transfer Rights | Subscribe |
| Change of Control | Subscribe |
| EIA Process | Subscribe |
| Power to Revoke | Subscribe |
| Age of Legislation | Subscribe |
| Other Factors | Subscribe |
South Africa’s legal risk profile has been in decline for over a decade, as constant discussions of legal reforms, issuance of potentially damaging and detrimental draft amendments and the long targeting of the mining sector as a vehicle to address historical racial discrimination, have collectively combined to cast a dark shadow over the industry, destroying investment perceptions of the jurisdiction. South Africa now sits in the ‘Critical Risk’ bracket of legal risk – a considerable fall from grace for a country once at the forefront of the mining industry. Though proposed amendments have been withdrawn and the most troubling aspects of the Mining Charter overturned by the courts, there is still a long way to go for South Africa. Whilst the country’s considerable mineral wealth and on-going operations will certainly sustain the sector for years to come, the pipeline of new projects and exploration investment could be a major concern for South Africa’s log-term economic prospects.
Contents
Legislation
- Mineral Resources and Petroleum Development Act 2002 (as amended)
- MPRDA Regulations 2004 (as amended)
- National Environmental Management Act 1998 (as amended)
- NEMA EIA Regulations 2014 (as amended)
Regulatory Risk Rating
Regulatory Risk
Regulatory Corruption Risk
Regulatory Corruption Risk
Corruption Exposure Risk
Corruption Exposure Risk
Overview
South Africa has one of the largest economies by GDP in Africa, though it is a dual economy, with some of the highest levels of inequality in the world. Mining has, of course, been a key industry in South Africa for centuries since the discovery of diamond (1867) and gold (1887) deposits. Alongside gold and diamonds other key mineral resources include chrome, ilmenite, manganese, palladium, platinum, rutile, vanadium, vermiculite and zircon. Though the mining sector’s contribution to GDP has shrunk to single figures in recent years, it still contributes more than 8% of GDP and employs in excess of 400,000 people. The Minerals Council of South Africa has expressed the intention to boost this figure to 12% – but with on-going regulatory and policy uncertainty it remains to be seen if this will be possible. Over the last 20 years, the sector has faced numerous challenges, not least because of rising resource nationalism and regulatory instability. Other issues have included skill shortages – in both the administration and the industry, the use of guidelines and charters to articulate mining policy rather than legislation – resulting in high levels of uncertainty, disaffected labour relations, issues with social licence to operate and an uncertainty and unreliability of power supply. These aspects have undoubtedly contributed to significant falls in exploration spend and caused some companies to divest operations to more favourable jurisdictions. It will take some considerable effort, and likely some extensive legal reform, to reverse this trend, though it is doubtful if the political and social environment will allow for the types of changes that are so desperately needed.
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