PRESENTATION AT THE FREE STATE REGIONAL WORKSHOP OF THE AGGREGATE AND SAND PRODUCERS ASSOCIATION OF SOUTHERN AFRICA (ASPASA); WESTDENE, BLOEMFONTEIN: 20 FEBRUARY 2014.

THEME THE QUEST FOR A WIN-WIN SITUATION RELATING TO MINERAL REGULATION AND COMPLIANCE WITH THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, 2002 (28 OF 2002) [MPRDA], AS AMENDED. 2

PRESENTER MICHAEL OBERHOLZER (CONSULTANT) CELL. NO ADDRESSES : 3

STRUCTURE OF PRESENTATION OBJECTS OF THE MPRDA PERSPECTIVE FROM INSIDE AND OUTSIDE THE DEPARTMENT OF MINERAL RESOURCES TYPES OF RIGHTS (PROSPECTING AND MINING) IN TERMS OF THE MPRDA TRANSFORMATION IN THE MINING INDUSTRY GENERAL CHALLENGES OF HOLDERS OF PROSPECTING AND MINING RIGHTS GENERAL CHALLENGES OF FREEHOLD OWNERS RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED 4

OBJECTS OF THE MPRDA International recognition of the State's sovereign right in respect of mineral and petroleum resources in the RSA State's custodianship in respect of mineral and petroleum resources Promotion of equal access to mineral and petroleum resources Sustainable and meaningful expansion opportunities for previously disadvantaged persons (HDSA’s) [including women] Promotion of economic growth and the development of mineral and petroleum resources Promotion of job creation and socio-economic welfare of all South Africans 5

OBJECTS OF THE MPRDA [ CONTINUED ] Security of tenure in respect of prospecting, mining, etc. [holders of rights] Holders of mining rights have to contribute towards the socio-economic development of the area in which they are operating 6

PERSPECTIVE FROM INSIDE AND OUTSIDE THE DEPARTMENT OF MINERAL RESOURCES Exposure both inside and outside the DMR Objectivity 7

TYPES OF RIGHTS (PROSPECTING AND MINING) IN TERMS OF THE MPRDA 8 TYPE OF RIGHT MAXIMUM PERIOD OF ISSUING RENEWAL Prospecting rightFive (5) years Renewal of a maximum period of three years (operations must take effect within 120 days as from the effective date) Mining Permit (not transferable) Two (2) years Maximum of three times of which a single time should not be longer than one [1] year Note: New maximum size of a mining area is 5 hectares. Mining RightThirty (30) yearsUnlimited renewals of which each one should not exceed thirty [30] years (operations should commence within one [1] year as from the effective date.

TRANSFORMATION IN THE MINING INDUSTRY The amended Mining Charter and Score Card provide guidelines relating to milestones that are to be achieved in terms of transformation and compliance with legal requirements. NB: (i)Transformation in the mining industry is deemed a very important matter; (ii)The full implementation of an approved Social and Labour Plan is an important factor in respect of transformation of the S.A. mining industry. 9

GENERAL CHALLENGES OF HOLDERS OF PROSPECTING AND MINING RIGHTS Risks in respect of prospecting and / or mining; Denial of access to properties not owned by holders; Ineffective communication with land owners, interested and affected parties; Lack of balance of relationships with land owners, interested and affected parties; Resistance by some land owners, interested and affected parties against prospecting and / or mining; Unreasonable claims of some land owners; and Lack of co-operation of some land owners. 10

GENERAL CHALLENGES OF FREEHOLD / LAND OWNERS Bullying / arrogance of some mining companies and other holders of prospecting and mining rights; Poor communication between holders of prospecting and mining rights and land owners; Poor / incomplete consultation by applicants for prospecting and / or mining rights; Possible wrong perceptions [generalizations] of some officials of the DMR and holders of prospecting and mining rights; Insufficient or incomplete information in respect of applications in respect of prospecting and mining rights. 11

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED Applicants for prospecting and mining rights are legally obliged to comply with relevant legislation (progress / performance reports); Objections to applications for prospecting and mining rights, the granting and execution thereof can be submitted (NB: Please note that there are deadlines for objections!!! (within thirty [30] days as from the date of notice issued by the Regional Manager in terms of Section 10 of the MPRDA. Late objections are noted and could possibly not be deemed valid. The Regional Manager must refer objections to the Regional Mining Development and Environmental Committee; 12

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ]. Appeals can be submitted after the granting of rights [Section 96 of the MPRDA]; Mining is a strong anchor in the SA economy and a given factor; Be mindful of rights in respect of e.g.  Land use;  Water;  Protection of historical buildings, structures and protected areas (South African Heritage Resources Agency);  Mine Health and Safety; 13

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ]. Prospecting and mining rights can be cancelled or suspended by the Minister of Mineral Resources in terms of Section 47 of the MPRDA in cases of:  A mining operation in contrast with the MPRDA  Violation of important terms and conditions of the right  Breach of the approved Environmental Management Plan / Programme  Inaccurate, wrong or misleading information submitted to the DMR 14

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ] Financial provision for rehabilitation (annual revision of quantum) Amendment of the MPRDA. Liaison with the DMR and maintaining good relationships are of paramount importance. The DMR can for example be requested to present information sessions. Do concurrent rehabilitation and minimize liability in respect of financial provision for rehabilitation. (Be mindful of other proposed amendments in respect of legislation). Take note of the following relating to the Mineral and Petroleum Resources Development Amendment Act, 2008 which came into effect on 07 June 2013, namely: 15

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ] (a)New definition of a mining area (e.g. any land or surface adjacent or non-adjacent to area but upon which related or incidental operations are being undertaken; (b)The objective to augment and substantially increase the socio-economic impact through mining is prominent. (c)Subsection 5 of section 43 of the MPRDA has been amended and provides that the Chief Inspector of Mines and each government department charged with the administration of any law which relates to any matter affecting the environment, must confirm in writing that the provisions pertaining to health and safety and management of potential pollution to water resources, 16

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ] the pumping and treatment of extraneous water and compliance to the conditions of the environmental authorisation, have been addressed. (d)Any authorised person may (at any time) request that any book, record, statement, etc. be provided to give effect to section 92 of the principal Act (routine inspections); NB:It is highly recommended that there be a constant awareness and quest to comply with applicable legislation 17

RECOMMENDATIONS AND COMMENTS RELATING TO THE QUEST FOR A WIN-WIN SITUATION IN SO FAR AS MINERAL REGULATION IS CONCERNED [ CONTINUED ]  Maintain good relationships with the DMR  Do not hide important issues for the DMR  Do not provide inaccurate / untrue information to the DMR  Do not hesitate to request advice on important matters  Monitor compliance constantly  Keep records available [inspections]  Submit reports / documentation in good time. 18

THE PATH TO GREATNESS IS ALONG WITH OTHERS [Baltasar-Gracian] (Spanish philosopher) THANK YOU!!! 19