South Africa boasts an abundance of mineral wealth and offers considerable investment opportunities.
Prior to 2004 the right to mine was associated with land ownership rights. The legislation has since been revised and now the State exercises sovereignty over all mineral and petroleum resources within the country as they are considered the common heritage of all South Africans.
The current legislation endeavours to promote economic growth, equitable access, employment and social and economic advancement for all citizens. Under the custodianship of the State, the Minister of Mineral Resources may grant or refuse any application for prospecting and mining rights.
The application process is strict and reflects the Government's policy to enforce black economic empowerment requiring at least 26% ownership by historically disadvantaged South Africans. Applicants must comply with environmental and rehabilitation legislation and adhere to various health and safety regulations. It is also imperative that the applicant gives due consideration to the rights, interests and socio-economic development of the area in which it expects to operate.
Current legislation allows for the renewal of prospecting and mining rights. In the case of prospecting rights, they may not extend beyond five years and may be renewed once for up to three years, and in the case of mining rights, they may not extend beyond 30 years and may be renewed for further periods of up to 30 years each. As a prerequisite to renewal, the holder of a prospecting or mining right must fulfil several obligations. Failure to comply with a variety of obligations could result in cancellation or suspension of the right.
Occupational health and safety on mines is governed by the Mine Health and Safety Act, No. 29 of 1996, which requires that employers ensure that persons on mines are able to work safely and without risk to their health. Failure to comply with this Act could result in the imposition of fines by the regulator or criminal prosecution.
“As a prerequisite to renewal, the holder of a prospecting or mining right must fulfil several obligations. Failure to comply with a variety of obligations could result in cancellation or suspension of the right.”
For a comprehensive document outlining the implications of this area of law in South Africa
click here.
