The newly appointed Minister of Mineral Resources, Gwede Mantashe, should make policy certainty his key and urgent priority.
AUTHOR: Peter Leon, co-chair and partner of Herbert Smith Freehills' Africa practice
The Fraser Institute recently released the results of its Annual Survey of Mining Companies.
In the Policy Perception Index (PPI), South Africa’s ranking declined by more than 14% since the introduction of the Mineral and Petroleum Resources Development Amendment Bill (B15-2013) in 2013, and almost 5% following the publication of Mining Charter III.
As a consequence, South Africa now ranks 81st out of 91 mining jurisdictions globally, with a score of 42%, placing it in the third lowest position in Africa, together with the Democratic Republic of the Congo (87/91 with a score of 35 %) and Zimbabwe (89/91 with a score of 29%).
An electronic copy of the report is available here.
Mining jurisdictions with stable and predictable mineral regulatory regimes, including African mining jurisdictions such as Botswana with a PPI score of 82% and a ranking of 21/91; Namibia with a score of 71% and a ranking of 39/91 and Mali with a PPI score of 66% and a ranking of 46/91 continue to be well ahead of South Africa.
If South Africa wishes to move out of the bottom league of African mining countries, Gwede Mantashe will have to re-set the direction of its mineral regulatory regime.
While President Ramaphosa's recent intervention in the Mining Charter III litigation is an important first step in addressing the country’s endemic regulatory issues, South Africa will have to do a lot more to catch up with its African peers.
Re-formulating the Mining Charter in consultation with labor, business and communities and withdrawing the MPRDA Amendment Bill should be priority items in the inbox of Gwede Mantashe.
On the Investment Attractiveness Index South Africa substantially improved its ranking from 74th out of 104 global mining jurisdictions to 48th out of 91 and a score of 62%.