Lili Nupen, Founder & Director,

NUPEN STAUDE DE VRIES (NSDV)

"There should be different regulatory requirements for a company that is prospecting as opposed to a full-scale mining operation."

How has the 2018 mining charter impacted the industry?

The current version of the mining charter is much improved from the previous version, but there are still many difficulties. The procurement section of the 2018 mining charter is unworkable and was not adequately thought through when it was gazetted.

The fact that the charter is seen as a legislated document, where it is merely a policy, creates issues. The current ‘stick’ approach creates a sense of punishment for non-compliance rather than an incentive or ‘carrot’ approach for genuine transformation. The charter should be a guideline on how to transform sustainably instead of box-ticking a specific legislative requirement.

How would you describe the current investment environment for exploration?

The current exploration investment environment is dire, and few want to invest. Simply put - we need more flexibility. The South African regulation is a one-size-fits-all approach. In my view, there should be different regulatory requirements for a company that is prospecting as opposed to a full-scale mining operation.

Discussions are underway, and there is a push from the Minerals Councils and the Council for Geosciences for the junior sector regulations to be less stringent. I have performed an exercise to try and figure out which parts of the legislation can be relaxed for the junior sector, and I am busy engaging the regulator and various stakeholders on proposed amendments.

We recently raised R5.6 billion into the South African mining sector from offshore investors. From our experience there is great interest in commodities and international investors are willing to invest if there is clear collaboration with the regulator and other stakeholders to implement and roll out the operation.

Ntsiki Adonisi-Kgame, Executive for Natural Resources and Environment,

ENSAFRICA

"A lengthy application process has a domino- effect and hinders progress in exploration and, ultimately, investment in mining."

What are the current concerns with the 2018 mining charter?

Although the 2018 mining charter is an improvement from the previous versions, there are still many interpretational difficulties, such as on ownership. The mining 2018 mining charter makes provision for different categories of mining right holders and these are existing, pending and new mining rights holders. In terms of the 2018 charter, all existing mining right holders who were compliant with the 26% black ownership requirement when applying for rights would be deemed to be compliant for the duration of the mining right. The charter recognises the once empowered, always empowered principle, however this recognition is limited and does not apply to renewal and transfers of mining rights.

Companies applying for new mining rights are expected to have 30% black ownership. The 2018 mining charter prescribes how this 30% should be held – 5% free carried interest must be held by the host community, 5% free carried interest must be held by qualifying employees, and the remaining 20% by black entrepreneurs. We look forward to the court judgment and hope that we will have clarity soon in regard to our regulatory framework when it comes to transformation.

What is the reason behind the backlog in obtaining permits and licenses?

The Regulator requires capacity to handle large volumes of work and people with the required skill set to assess applications to finality and an online cadastral system that works. One of the biggest difficulties has been the defective online Samrad application system. The good news is that recently the DMRE indicated that they would be releasing a request for proposals for a new cadastre system. A lengthy application process has a domino- effect and hinders progress in exploration and, ultimately, investment in mining.

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Indusrtry Views: Insights on South African Mining Industry's Health