Mining in South Africa

July 8, 2019

LEXOLOGY - / 05 JULY 2019 - 14.04/  HERBERT SMITH FREEHILLS LLP 

 

 

 

Standing

What is the nature and importance of the mining industry in your country?

 

The mining industry has historically been a key driver of the South African economy. Economic activity in modern-day South Africa has been centred on mining activities, their ancillary services and supplies. The country’s stock exchange in Johannesburg was established in 1887, two decades after the first diamonds were discovered on the banks of the Orange River, and almost simultaneously with the gold rush on the world-famous Witwatersrand. Today, the South African mining sector employs approximately 450,000 workers (4.6 per cent of the South African workforce) and contributes to roughly 7.3 per cent of the country’s gross domestic product.

 

 

 

Unsurprisingly, the country’s mineral wealth is a valuable source of foreign direct investment. In spite of prevailing regulatory uncertainty, the mining industry remains a key focus point of the government and the private sector, and continued efforts are being made to engage foreign investors to stimulate further growth.

 

Target minerals

What are the target minerals?

 

South Africa has the world’s largest resources of platinum-group metals, manganese, chromium, gold and alumino-silicates. The country accounts for over 40 per cent of the global production of ferro-chromium, platinum group metals, vanadium and alumino-silicates exports, and is one of the world’s largest exporters of platinum group metals, gold and vanadium. In addition, South Africa has large deposits of copper, zinc, iron, coal and diamonds.

 

While South Africa is not endowed with any significant lithium deposits, it has approximately 70 per cent of the world’s high-grade manganese ore reserves. Manganese, which is primarily used in steel production, is also a key element in the production of lithium-ion batteries. Increased global demand for manganese resulted in a 32 per cent year-on-year increase in manganese production in South Africa in 2017 and, in 2018, South Africa produced approximately 33.5 per cent of global manganese production.

 

Regions

Which regions are most active?

 

Various underground geological formations are found in South Africa. These formations span the country and as a consequence, mining activities take place in most of its provinces.

 

Some significant examples of these geological formations include:

  • the Witwatersrand Basin (gold, uranium, silver, pyrite and osmiridium deposits);

  • the Bushveld Complex (platinum-group metals and associated copper, nickel, cobalt, chromium and vanadium-bearing titanium-iron ore deposits);

  • the Transvaal Supergroup (manganese and iron ore deposits);

  • the Karoo Basin (bituminous coal and anthracite deposits); and

  • the Phalaborwa Igneous Complex (copper, phosphate, titanium, vermiculite, feldspar and zirconium deposits).

Legal and regulatory structure

Basis of legal system

Is the legal system civil or common law-based?

 

South Africa has a mixed legal system. Its doctrines and concepts are influenced both by the civilian tradition (in an uncodified Roman-Dutch form brought by early Dutch settlers) and by the common law tradition (introduced during the British colonial period).

 

Regulation

How is the mining industry regulated?

 

The mineral resources sector is primarily regulated by statute and in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). The common law will apply to the extent that the MPRDA does not regulate a specific issue but the provisions of the MPRDA will prevail to the extent of any inconsistency

 

The mining industry is regulated at national level by the Department of Mineral Resources (DMR) which through its regional offices implements and administers the MPRDA.

 

CONTINUE READING THIS ARTICLE ............. : https://www.lexology.com/library/detail.aspx?g=e1b4b860-f68a-42cd-8ae1-6e8554102451

 

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Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

 

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