Investor uncertainty looms over South Africa's mining sector despite new regulations

South Africa’s mining sector remains engulfed in investor uncertainty despite the recent gazetting of the Draft Minerals Resources Development Bill of 2025.

The government aims to enhance mineral exploration and bolster international investment through this initiative, but experts have voiced concerns about the existing complexity and lack of clarity that may hinder progress.

South Africa, a major mining hub in the region, has identified platinum, manganese, iron ore, coal, and chrome ore as “high-critical minerals” under the new Critical Minerals and Metals Strategy.

It has also classified commodities such as gold, vanadium, palladium, rhodium, and rare earth elements as minerals with moderate to high criticality while copper, cobalt, lithium, graphite, nickel, titanium, phosphate, fluorspar, zirconium, uranium, and aluminium were identified as minerals with moderate criticality.

While the Minerals Council on Wednesday said it was in the process of reviewing the new Bill and the new Critical Minerals Strategy, South African mining experts have said there was still investor uncertainty pervading the industry.

“There's still a lot of investor uncertainty, which will only likely be cleared when the actual regulations come,” independent mining policy expert, Sandra Gore, told Business Report on Thursday.

“The mines are highly burdened with obtaining multiple permits across the board and, you know, are often duplicate the approvals needed from separate departments.”

Under the proposed Bill, local beneficiation will be spearheaded by the Minister of Minerals and Petroleum Resources. This was likely to cause some tension with some investors given the large amounts of capital required to set up local beneficiation facilities.

Gore said the issue of local beneficiation was a double edged sword as there was also need for local empowerment and upliftment of communities.

“You don’t want the government hauling you in a free markets as to how much you must beneficiate locally,” said Gore.

“But at the same time, you don't want your minerals going overseas to international smelters and this has been also just delegated to regulation levels, so there's no answers on that yet.”

Other experts explained that the new amendments included provisions that aimed to promote local beneficiation by requiring mineral producers to make minerals available for local beneficiation, which in the current state “is vague and provides too much administrative discretion”.

Partners and consultants at Webber Wentzel said Minister Gwede Mantashe’s proposed amendments had dropped references to petroleum and the regulation of the exploration and production of petroleum products.

This was in alignment with the Upstream Resources Development Act 23 of 2024, which, although not yet in force, aims to provide separate regulation of the petroleum industry.

“The Bill includes a somewhat unhelpful definition of 'controlling interest', requiring ministerial consent in terms of section 11 for a change of control in listed and unlisted companies,” said Jonathan Veeran and other experts at Webber Wentzel in a note.

“This requirement could prove impractical for listed companies as stock market transactions are fluid and subject to their own rules and regulations, potentially leading to compliance conflicts.”

They further noted that to address tailing dumps and associated issues that had resulted in the Jagersfontein disaster the new mining Bill was introducing the concept of 'historic residue stockpiles'.

Under this, transitional provisions give mine owners two years to either include the dump/stockpile in its mine works programme by way of an amendment in terms of section 102 or apply for a right insofar as the material is situated outside an existing mining area.

Failure to apply for a right will result in the dump/stockpile reverting to the State. To close the regulatory loopholes associated with old mine dumps, similar amendments have been proposed to the National Environmental Management Act (NEMA).

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