MPRD Amendment Bill to be tabled early 2013

MPRD Amendments will cause heat in oil industry…..

susan shabanguNot yet scheduled for meetings by committees or hearings dates in Parliament, is the draft Mineral and Petroleum Resources Development Amendment Bill for which mineral resources minister, Susan Shabangu, obtained cabinet approval for in early December last year and who  called for public comment on the draft by the end of January 2013.        With a problematic preamble which states that the draft Bill is to promote the concept that “that the nation’s minerals are developed in an orderly manner while promoting justifiable social and economic development”, certain sectors have already provoked considerable industry comment which were presumably have been conveyed in comments to the minister and her department as called for when gazetted.

Amongst the many “refined existing definitions”, the draft Bill as it stands at present and possibly to be tabled seeks to allow the state to acquire by right of ownership any mineral resource to a “free carried interest” in any exploration matter and a right to acquire “a further interest” in that exploration with also production rights “through an organ of state or state owned company”.

Changes are also proposed on the issue of ministerial limitations on the ability of mining companies to trade JSE shares on the open market.

PASA to go

The disbanding of the Petroleum Agency of South Africa appears to be on the cards as well, since the draft Bill clearly relegates all functions of this agency to the department of mineral resources (DMR) and much of the work undertaken with and by DMR will now be allocated under the Geosciences Act, other work passing from DMR to fall under the National Environmental Management Act and therefore bringing in a further department.

“Technically, therefore, government departments would become a petroleum regulator”, was the comment by the Offshore Petroleum Association of SA in the Johannesburg press. However, clarification of this and the situation with regard to PetroSA and the acquisition of exploration rights will presumably emerge during parliamentary hearings since submissions so far in terms of the gazetted document are naturally private.

The draft Bill also contains a great number of changes and redefinitions in the area of associate minerals affecting a broad spectrum of the mining industry. However, in particular the draft states that it proposes to “make provision for the implementation of the approved beneficiation strategy through which strategic minerals can be processed locally for a higher value”. The ability of the minister to set those beneficiation levels and any prices seems to be incorporated.

This specifically will bring focus upon the benefits from tailings in mine dumps, meaning that not necessarily the owners that created them originally will be the sole beneficiaries of subsequent workings. On this subject, the Bill also calls for a new description or interpretation of the word “beneficiation”, this to be inserted into the anchor legislation, the MPRDA itself, by amendment.

Regional mining developmental bodies and environmental committees regarding MPRDA matters are to be set up under the jurisdiction of DMR, such bodies having regional managers with powers.

What effect any submissions have will been seen from the document that is eventually tabled.

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