Minerals and Petroleum Resources Development Bill

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 contd

• 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 contd

• Schedule 1 Laws repealed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 iaps 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 HDPs
• 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 nations 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
• 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
• 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