1. Minerals and Petroleum Resources Development Bill
Briefing to the Portfolio Committee on Minerals and Energy
26/10/2001

2. Introduction
19/09 - Cabinet approved introduction of Bill into Parliament;
26/09 – DME refers Bill to SLA for certification
Draft Bill still with SLA
Purpose is to give broad overview of the draft Bill

3. Introduction cont’d Chapter 1 – Definitions
Chapter 2- Fundamental Principles
Chapter 3 – Administration
Chapter 4- Minerals and Environmental Regulation;
Chapter 5 – Minerals and Mining Development Board
Chapter 6- Petroleum Exploration and Production
Chapter 7 – General and miscellaneous

4. Introduction cont’d Schedule 1 – Laws repealed
Schedule 2 – Transitional Arrangements
Chapter 8 –Diamond Chapter has been removed – new Bill being drafted – Precious Metals and Diamonds Bill

5. Administration (Chapter 3)
Minister has executive and political authority –
All original powers vest in the Minister;
Minister grants rights and approves EMPs;
DME to play supporting role to the Minister
Director- General designates officers to perform function of Regional Managers;
Minister can delegate powers – c 101;
Administration of Act founded on principle of administrative justice
Empowers Minister to divide the country into regions

6. Fundamental Principles (Chapter 2)
Objectives remain the same
Mineral resources are part of the national patrimony;
State is the custodian
Promote equitable access;
Promote empowerment – BEE and Community
Create jobs
Security of tenure for prospecting and mining operations

7. Fundamental Principles
Environmental Protection
Ensure companies contribute social upliftment of communities;
Prospecting and mining rights are registerable, transferable and bondable and entitles holders to –
Access the land;
Prospect and mine for minerals;
Remove and dispose of minerals; and
Other ancillary rights.

8. Mineral and Environmental Regulation (chapter 4)
Firs-come-first-serve applies
Consultation with i&ap’s from the beginning
Applications lodged at regions;
Granting of rights based on stipulated criteria
Applicant must comply with granting criteria

9. Minerals and Environmental Regulation
Criteria – The Minister must grant prospecting right if –
Applicant has access to finance and technical ability;
Estimated expenditure is compatible with prospecting work programme;
Prospecting will not damage the environment
Applicant can comply with Mine Health and Safety Act; and
Application will promote empowerment and create jobs

10. Minerals and Environmental Regulation
Holders of rights have exclusive entitlement to apply and be granted -
Renewal of its rights; and
new right
Imposes performance obligations on holders of rights
Promotes access to information;
Created mining permit for small scale miners
Strict environmental compliance requirements

11. Minerals and Environmental Regulation
Promotes beneficiation;
Advances the interests of HDP’s
Balances interests of landowner and that of holder of rights;
Establishes early warning system in the event of downscaling;
Provides for security of tenure;
Discretionary powers removed where appropriate

12. Minerals and Environmental Regulation
Category of rights and permits
Prospecting right – 5 years, renewable 3 years
Mining right – 30 years, renewable
Retention permit – 3 years, renewable 2 years
Mining permit – 2 years renewable 1 year

13. Minerals and Mining Development Board (chapter 5)
Plays crucial role in advising the Minister –
Sustainable development of mineral resources
Transformation of the industry
Human resources development of the industry
Broadly representative of stakeholders
Independent from the Department
Funded by moneys appropriated by Parliament
Board must establish Regional Mining Development and Environmental Committees

14. Petroleum exploration and production (Chapter 6)
Deals with upstream petroleum industry;
Petroleum Agency to perform function of Regional Manager
Rights and Permits –
Exploration right -
Production right
Reconnaissance permit;
Technical co-operation permit

15. General and Miscellaneous (Chapter 7)
No major changes
Provision for access to the courts;
Internal appeal; and
Right to take dispute to court
Transformation of the industry
Housing and living condition;
Guideline for transformation of industry
Code of good practice
Appointment of contractor – holder or right must ensure contractor complies with the law

16. Transitional Arrangements (Schedule II)
The objectives are to -
Guarantee security of tenure for prospecting and mining operations;
Give holders of old order rights opportunity to comply; and
Promote equitable access of the nation’s mineral resources

17. Transitional Arrangements
Three categories of rights
Old order prospecting right’ – 2 years
Old order mining rights – 5 years
Unused old order right – 1 year
Old order prospecting and mining rights will be converted into prospecting rights or mining rights, respectively
Unused old order right must apply for prospecting rights or mining rights

18. Transitional Arrangements
Sunset clause for companies who do not pay royalties to any body
Communities continue to receive royalties if –
Development plan;
Proper financial controls;
Money is being used for community development; and
Royalties is used for the benefit of all members of the community
Individuals will continue receiving if –
Stoppage will cause hardship;
Royalties being used for social upliftment

19. Conclusion Old order New dispensation
Private control over access to mineral resources
Fragmented
Security of tenure
No statutory performance requirements
New dispensation
Public control over access to mineral resources
Consolidation
Security of tenure
Statutory Performance requirements

20. Conclusion Old order New dispensation No ready access to information
Frustrates grass roots exploration by new entrants
New dispensation
Access to information guaranteed
Promotes and facilitates new investment in the minerals and mining industry