According to one of South Africa’s leading corporate law firms, today’s speech by Minerals Minister Susan Shabangu was a breath of fresh air that was marked by a promise to halve the time taken to process applications for prospecting and mining rights in South Africa and a firm stance on nationalisation.

Peter Leon, head of natural resources and regulatory at Webber Wentzel in Johannesburg, and also chairman of the mining law committee of the International Bar Association (IBA), said that Shabangu’s statement that nationalisation would not happen in her lifetime in her post speech press conference, was likely to be welcomed by foreign and domestic investors.

“Her speech seems to mark a significant departure from her and the governments previous hard-line approach towards the South African mining industry.

“Today the Minister’s stance was far more inclusive and facilitatative.

“Most encouragingly, she said that the controversial MPRDA (Mineral and Petroleum Resources Development Act) amendment act, signed by the president last April, would not be implemented until all stakeholder concerns had been addressed.

“She also indicated that the contentious codes of good practice would be reviewed.”

Last year’s much criticized codes of good practice attempted to amend the Mining Charter retrospectively by, amongst others things, requiring that BEE (Black Economic Empowerment) transactions had to be fully paid for within two year of the deal.

This is impractical as most BEE transactions are highly leveraged and long term in nature and therefore would require most mining BEE deals to refinanced at high cost in challenging economic conditions.

Leon noted that the government’s prescriptive approach to the mining industry is being softened and that for the first time since SA mineral regulatory reform began 10 years ago, a government minister had recognised that transformation and international best practice are not mutually exclusive.

“They can work together for the benefit of the country as a whole,” said Leon.

“Of course we have to wait and see what comes out of the March mining summit but these are early positive signs.”

The March summit brings together Government, business and labour to discuss sustainable growth and meaningful transformation in the South African mining industry.