Tag Archive | department of mineral resources

MPRDA Bill returned to National House of Leaders

Some sort of movement on MPRDA at last……..

sent to clients 18 March…..In a parliamentary document recently published it is shown that the Mineral and Petroleumcoal mining Resources Development Amendment (MPRDA) Bill has been sent on a token trip through the National House of Traditional Leaders for comment in thirty days and then to be returned to the Portfolio Committee on Mineral Resources.

This is probably for some temporary major changes to be made to the Bill after debate until such time as two new Bills, one for the mining industry and one for the oil and gas industry, are drafted in time to come.     No doubt this movement was initiated as the result of the recent meeting between President Zuma and business leaders.

The extraordinary affair of the MPRDA has been going on since the first draft of the Bill was published for comment in December 2012 regulating extensively the exploitation of minerals and resources and the legal movement and transfer of resource rights.    Both industries have their own and very different BEE charters and the single Bill deals with both and many empowerment factors.

Core issues


Two issues
of note were that in the new Bill as originally proposed the Minister was to form a new “entity” which will “promote onshore and offshore exploration for and production of petroleum” and which will also “receive, store, maintain, interpret, add value to, evaluate, disseminate or deal in all geological or geophysical information” relating to petroleum and gas exploration matters.

Secondly, sections 80 and 84 of the anchor Act were to be amended to provide for State participation in any successful minerals and gas/oil development exercises carried out by the private sector, the Bill providing for a State right to free carried interest in all such exploration and production rights.
Specific details regarding the extent of the “free carry” were to be published in a government gazette, a figure of 20%susan shabangu being bandied about at the time.   “We are on the path of changing the mining and petroleum industry in South Africa, whether you like it or not,” said Mineral Resources Minister Susan Shabangu earlier in 2014.

Strong views

Accompanied by a public outcry and strongly worded objections from private industry, foreign companies and other institutions, the Bill reached Parliament virtually unchanged.    Again, brought up before the Portfolio Committee on Mineral Resources in public hearings, were strong objections from Opposition MPs and institutionalised industry, neither of whom minced their words, describing the Bill, in one case, as a “self-destruction tool of South Africa’s investment climate.”

Nevertheless, the ANC Alliance continued on their course and the Bill was hammered through in a rush at the end of the parliamentary term, the ANC summonsing through its whip sufficient numbers.

In the background, as the Bill went through Parliament, was the fact that the Department of Mineral Resources and the Department of Energy were only just completing their split apart. Crossed wires were the order of the day.

Nothing happened

Since that date the Bill has sat in limbo; a new Mineral Resources Minister Ngoako Ramatlhodi Ngoako Ramatlhodiagreeing shortly after with the with mining companies and the Chamber of Mines that the best and fastest way forward to bring certainty to the mining and oil drilling industry would be to pass the Bill subject to amendments based on a new approach to the mining beneficiation issue.

Secondly, the matter of state “free carry” could be dropped.

At the time it was guessed that at least a year and a half would be the delay if two replacement Bills were to be drafted, separating mineral resources from oil and gas in the light of the fact that both have separate and very different BEE charters. The quicker alternative to bring some certainty was that temporary amendments to the existing Bill should be made.

Despite this, the Bill has just stuck right there, in the President’s office, until recently, now moving back togas exploration sea Parliament because, as is suspected, business leaders in their recent discussions with President Zuma must have drawn his attention to the continuing lack of lack of certainty in both industries because of unknown legislative changes about to occur and an apparent inability by Cabinet to give clear policy leads.

So where are we?

So as far as the MPRDA Bill is concerned, there is movement in the goods sidings but whether any train is about to start on a journey can only be known when a meeting is scheduled by the Portfolio Committee on Mineral Resources. Yet another minister is the train driver.

Previous articles on category subject

 

 

 

 

 

 

Posted in Cabinet,Presidential, Energy, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Special Recent Posts, Trade & Industry0 Comments

Karoo Fracking

Fracking, shale gas gets nearer

Mineral resources gives update on fracking, shale gas

In what appeared to be justification for cabinet’s support of the furtherance of shale gas exploration, director general of the department of mineral resources (DMR), Thibedi Ramontja, told Parliament recently that the discovery of gas deposits in the Karoo “was an exciting opportunity to create jobs and that this was going to make a difference to people’s lives in terms of the NDP”.

He was briefing the select committee on land and mineral resources on the department’s budget vote, his audience representing a different cluster and a more inclusive one than when DMR briefed the National Assembly’s portfolio committee the week before.

Whilst a gazette had been published in February 2014 imposing certain restrictions on the granting of new applications for shale gas “reconnaissance”, DMR said that current approvals did not yet authorise hydraulic fracturing itself.     If this was allowed, “certain amendments” would be made to the appropriate Act.

EIA to come

An environmental impact assessment would be completed in conjunction with the department of water affairs “within the second quarter of 2014/5” to determine “responsible practices” for hydraulic fracturing and to “provide a platform of engagement with stakeholders”.   DMR said that this process would be “streamlined”.

It was noted by DMR in their presentation to parliamentarians that both shale gas exploration and production, together with coal bed methane, will be authorised under environmental impact regulations.

Warning on BEE

The briefing on the DMR strategic plan for five years and this year’s budget vote for the department was preceded by a statement by the deputy minister of mineral resources. Again the warning was conveyed to the mining and petroleum industry that it was generally in default of the mining charter.

With the tenth anniversary of the charter now present, DG Ramontja said, findings by DMR indicated that whilst some targets had been partially achieved in terms of BEE and the charter, others were very much lagging. “Action will be taken”, she said.

Other articles in this category or as background
http://parlyreportsa.co.za//energy/shale-gas-exploration-gets-underway/
http://parlyreportsa.co.za//energy/move-by-minister-to-qualify-shale-gas-exploration
http://parlyreportsa.co.za//energy/fracking-regulations-enhance-safety/

Posted in BEE, Electricity, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Public utilities, Trade & Industry0 Comments

Fracking regulations to enhance safety

Fracking regulations published for comment….

Fracking_GraphicProposed technical fracking regulations on “Petroleum Exploration and Exploitation” have been published by mineral resources minister, Susan Shabangu, stating that the regulations are sought to ensure safe exploration and production methods.

She said on publication, “The purpose of the draft regulations is to augment gaps identified in the current regulatory framework governing exploration and exploitation of petroleum resources, particularly in relation to hydraulic fracturing and prescribe good international petroleum industry practices and standards that will enhance safe exploration and production of petroleum”.

Protection of water resources

Such technicalities are provisions for the following:   Firstly, an assessment of the potential impact of the proposed activities on the environment must be provided; secondly, there must be provision for the protection of fresh water resources; thirdly the protection of biodiversity, palaeontology and the broader environmental impact must be in line with government objectives and, finally there have to be mechanisms for site-specific buffer zone determination for the co-existence of shale gas exploitation and the Square Kilometer Array (SKA) project.

International best practices sought

susan shabangu The mineral resources department stressed, in an earlier statement, that the regulations would ensure that all exploration activities would be “conducted in a socially and environmentally balanced manner”. The gazette in question calls for sound international petroleum industry best practices and standards.

The technical requirements include site assessment, selection and preparation, well design and construction, operations and management; and well suspension and abandonment.

Mid November is given as the date for comments to the department of mineral resources to be concluded.

Refer to articles in this category
http://parlyreportsa.co.za//energy/fueloilrenewables/pasa-ready-fracking-sea-gas/
http://parlyreportsa.co.za//energy/fueloilrenewables/fracking-moves-november-says-minister-davies/
http://parlyreportsa.co.za//energy/chemical-industries-plan-for-training-skills-in-fracking/

Posted in Energy, Enviro,Water, Fuel,oil,renewables, Trade & Industry0 Comments

MPRDA Bill brings changes in BEE and exploration rights

BEE consolidated

coal miningMoses Mabuza, when briefing Parliament on the Mineral and Petroleum Resources Development Amendment (MPRDA) Bill, told parliamentarians that amongst the many issues proposed by the new Bill an important issue was the setting up of penalties for non-BEE compliance across both the mining and liquid fuel sectors.

However, he said that he was confident that all stakeholders in the both industries would look back on a their association with black empowerment with understanding and pleasure, despite the opposition to the Bill on various differing and wide-ranging issues at present.

Bill will create right environment

Mabuza, who is deputy director general, mineral and policy promotion,department of mineral resources (DMR), said industry will be surprised see how much this legislation in the years to come will have contributed  to the country’s development, both in the mining, liquid fuels industry and business in general.    He told told the portfolio committee on mining resources, when briefing MPs on the Bill page by page, that it was important to understand government’s viewpoint as far as the oil and gas industry is concerned.

“We want to see that no partnerships created by the Bill are mutually exclusive or self interested”, he said. “We wish to create an environment where the state participates together with mining and gas industry with nation’s developmental objectives in mind.”

Blank cheque

“We give you the assurance”, Mabuza said, “that any regulations which are to follow will provide the kind of certainty sought in both the mining and petroleum industry”.

Opposition members still called to see the basis of the regulations first before further debate, since they claimed that at present, and as things stood, the wording of the Bill amounted to giving the state “a blank cheque” by not knowing what regulations were to be imposed.

The minister objected to this, saying that trust was called for and DMR would sit down with other departments and stakeholders and agree upon regulations within the framework  of the Act. “This is the only way things can work”, Mabuza said. “That is why the Act is a framework, with us all working from this plan.”

Working with stakeholders

In tracing the history of the MPRDA, deputy Mabuza and his co-presenter for policy development in DMR, Adrian Arendse, continually referred to stakeholder meetings throughout the process over the years, including stakeholder workshops where the various parties consulted were broken down into sectors such as environmental, petroleum industry, mining industry, finance and bankers and legal interests.

“We received commendable inputs from these workshops and in an overall sense, particularly where mining and petroleum was concerned and we have received both consensus and support for the proposals now before Parliament.”

Not conducive

Opposition parliamentarians denied this saying from what they had heard that there had not been overall consensus on many issues and the complete lack of uncertainty.   Lack of clarity on state motives was a total disincentive to investors, commented one MP.    Said another opposition MP, “Mining industry representatives have said in the media that this Bill will not grow the industry, so tell us why you think it will.”

Deputy director Mabuza, in response, again gave assurances from government that the proposed Bill represents no fundamental shift in government policy. He said clarity and certainty would follow in the course of time as regulations became evident.

Different horses on courses

Further on BEE matters, questions were asked on how government intended putting into force a parallel BEE charter that incorporated the liquid fuels charter, which called for less than 10% ownership as a target, and the mining charter which was at 27%, plus other anomalies.   One MP said that in gas exploration there were enormous developmental costs and the charter made no sense on these issues.

Mabuza said he was aware of the “vast differences” between the two documents and this would have to be discussed in rounds of talks to come and considered carefully. Some of those talks had already started, not referring with whom and on what particular subject.

However, he said there were also big differences in the industries themselves, in both matters of beneficiation and style of operations. DMR wanted to land up in a situation where nobody was disadvantaged, either the poor or the investor.

Exploration rights change

On exploration rights, Mabuza said where the Bill really differed from previous regimes was that the “first come first served” principle in exploration and rights licensing was to be abolished totally. “This system leads to mediocrity”, he said. “We have learnt much over the 15 years with such licensing regulations, during which time South Africa has lost it share in global resource exploration, going from 3% to a current 1%. We do not wish to go down this road any longer”, he said on licensing.

“The first person served often meets the absolute minimum requirements and in so many cases, South Africa has had years of brownfields investments and never the greenfields operations that number 5 or 20 in the queue might have offered for a license on the same project. Mediocrity resulted and South Africa has suffered consequently”, he said.

Mining and energy split

In answer to questions on the liaison between DMR and the department of energy (DOE), Mabuza described the sphere of control under the MPRD Act as being simply a question of “downstream” energy resources being for DOE and “upstream” matters on exploration mining licences and industry regulations being for DMR.  Obviously, he said, environmental issues were handled by those competent to do so.

Mabuza said that in coming up with the proposed Bill, DMR had consulted with, or observed, the practices of Canada, Angola, Ivory Coast, Russia and Gabon but opposition members complained that the process of consultation or observation meant absolutely nothing.   They want to know who DWEA had listened to in coming up with the current proposals.  Those before Parliament said they had made their own decisions and stakeholders had been involved along the road in discussions, particularly in the mining industry.

Planned for the future

Mabuza said that South Africa “remained the wealthiest mining and exploration production country in the world and with Africa reaching never-before, unprecedented levels of geo-political stability, the future was bright.   “We have designed legislation that takes both the state and our developmental economy into that future”, he said.

On the subject of penalties in the area of BEE non-compliance, opposition members complained that such contributed further to red tape, political uncertainty and investor complications.    Mabuza denied this and told parliamentarians that any penalties written into the Bill were a maximum sum only “and in any case”, he said, the 10% maximum still represented ‘just petty cash’ for most mining companies”.

“We had to bring in some form of penalty where shareholders were alerted to non-compliance otherwise management just carried on regardless of regulations or compliance issues”, Mabuza said.

Refer previous articles in this category
http://parlyreportsa.co.za//uncategorized/mineral-and-petroleum-development-bill-grabs-resources/
http://parlyreportsa.co.za//energy/draft-mprda-bill-for-comment/

Posted in BEE, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Trade & Industry0 Comments

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.

Posted in Energy, Fuel,oil,renewables, Justice, constitutional, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Hanekom to protect SKA win from fracking fallout

Protecting the Square Kilometre Array

In answer to a parliamentary question on the subject, the new minister of science and technology Derek Hanekom has confirmed that a report is to be undertaken by the department of science and technology and the SKA project team on any possible negative effects of shale gas fracking in the Karoo.

Mineral resources minister, Susan Shabangu, earlier told the media in a press media meeting that government “will approach fracking in the Karoo in a sensitive and responsible manner”.    At this meeting she made public to all the report on investigation of hydraulic fracturing or fracking in the Karoo.

Minister Hanekom’s recent response to MPs questions stated that findings of the research will focus on any negative impacts during the exploration phase and will also be used to inform measures to be put in place “for the exploitation phase.”

Posted in Cabinet,Presidential, Energy, Fuel,oil,renewables, Land,Agriculture, Public utilities, Uncategorized0 Comments

Move by minister to qualify shale gas exploration

Drilling OK but no “fracking”

Mineral Resources Minister Susan Shabangu has said her ministry is to consider Karoo shale-gas exploration licence applications but such would be on the basis of excluding  fracking until the country’s mining regulations had been “augmented” to allow for what hydraulic fracturing involved.

She said that normal drilling could take place as well as geophysical and geochemical mapping but the fracking process itself could not take place during the time it would take draft “appropriate regulations, controls and coordination systems”.    The waiting period to allow for this would be about six months to a year, she said.

The minister did not state when the issuance of licences would commence as a result of the cabinet’s “conditional” approval of fracking exploration at the beginning of September but said that a monitoring committee would be established to oversee the augmentation of the mining regulations, as well as to supervise possible fracking operations.

Posted in Energy, Fuel,oil,renewables, Labour, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Fracking report complete but Minister ponders on result

Minister Susan Shabangu told Parliament during her Budget vote speech said that department of mineral resources (DMR) had already completed its report on the feasibility of shale gas exploration in South Africa. It remained with the department at this stage.

Earlier, various ministers had confirmed that the report on proposals from Shell Petroleum is expected to be with cabinet only in late July.

In a press meeting before she addressed the National Assembly, minister Shabangu said the controversy surrounding the process of fracking was one of the key reasons for the current delay in the passing of the report onwards and how DMR and the department of energy (DME) should position themselves with the results.

She reminded her audience that the proposals at this stage were only to proceed with fracking at exploration level.

Posted in Cabinet,Presidential, Energy, Finance, economic, Fuel,oil,renewables, Labour, Land,Agriculture, Public utilities, Trade & Industry0 Comments


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