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South African mining bill amended, but doubts remain

Tue, 01st Nov 2016 14:56

* Govt seeks regulatory certainty in mining sector

* Legislators say bill could be challenged in court

By Wendell Roelf

CAPE TOWN, Nov 1 (Reuters) - South Africa's parliamentpassed amendments to a long-delayed mineral resources law onTuesday, though doubts remain over whether it will provide theregulatory certainty needed to boost a declining mining sector.

Battered by a global commodities downturn that hit keyplatinum, iron ore and coal exports, Africa's mostindustrialised country hopes the bill will boost a flaggingmining sector forced into shaft closures and massive job losses.

The Mineral and Petroleum Resources Development Amendment(MPRDA) bill was first passed in 2014, but President Jacob Zumareferred the bill back to parliament over concerns that it mightinfringe global trade obligations and was unconstitutional,partly because it elevated the country's Mining Charter to thestatus of legislation.

The Mining Charter contains regulations meant to redressimbalances of the nation's past apartheid rule and stipulatesrules for white-owned companies to sell stakes to blackbusinesses.

The bill also gives wide-ranging powers to the minesminister to place certain minerals in a "value-addition"category requiring a portion of extracted resources to beprocessed domestically and not be exported in raw form.

It also allows the minister to declare minerals strategicand aims to give the state a 20 percent minority stake in newgas and oil exploration and production ventures, which theindustry has said would discourage investment.

The country's nascent oil and gas industry has previouslycalled for a separate bill after companies such as Shell, ExxonMobil, Total and Anadarko voiced concern over the proposed 20 percent governmentownership in new ventures.

A spokesman for the Offshore Petroleum Association of SouthAfrica did not answer a phone call seeking comment.

Mosebenzi Zwane, the minister of mineral resources,supported the bill, saying it vests the country's mineralresources in the hands of the state.

"The gains we have made in a short space of time can beaccelerated and amplified with the processing of this bill," hetold parliament. "It is our duty to create legislation thatwould stand the worst of times and the best of times."

The official opposition Democratic Alliance party remainscritical, however.

"This bill will worsen uncertainty by putting massive powerin the Mineral Resources Minister's hands to set the rules andchange them quickly," said James Lorimer, the shadow minesminister.

The bill will be referred to parliament's upper house andthen to Zuma for his assent, but legislators say the bill couldbe challenged in the Constitutional Court. (Editing by James Macharia and David Goodman)

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