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Financial Provisioning Regulations compliance timeframe extended

On 17 January 2020, the long-awaited notice extending the transitional timeframe for compliance with the Financial Provisioning Regulations, 2015 was published by Minister of Forestry and Fisheries and Environmental Affairs Barbara Creecy.

In terms of the extension notice, the applicable Mineral and Petroleum Resources Development Act (MPRDA) rights holders now have until 19 June 2021 to comply with the Financial Provisioning Regulations and shall, until this date, be regarded as having complied with the Financial Provisioning Regulations if compliant with the financial provisioning requirements applicable under the approved MPRDA right.

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The second draft of the ‘Proposed Regulations Pertaining to the Financial Provision for the Rehabilitation and Remediation of Environmental Damage caused by Reconnaissance, Prospecting, Exploration, Mining or Production Operations’ was published for comment on 17 May 2019.

According to Webber Wentzel Partner Garyn Rapson, the extension notice will no doubt be a welcomed relief for the cash-stricken mining industry, and will further allow the required time for the supporting legislative developments to be finalised (such as the revived NEMLAA4 Bill and the split of petroleum resource regulation from the MPRDA).

“We expect a third draft of the replacement Financial Provisioning Regulations to be published this year for a further round of consultation,” says Rapson.