South Africa’s Chamber Sees Resolution to Mining-Law Impasse

South Africa’s Chamber of Mines, the nation’s main industry body, said it expects the government to address its concerns over planned amendments to mining laws that threaten to deter investment.

Parliament’s mineral resources committee is holding public hearings on the planned changes to the 2002 Mineral and Petroleum Resources Development Act, which propose the state be able to force mine operators to process some output locally and declare some minerals strategic to secure supplies. Anglo American Plc (AAL) and other mining companies say the law would affect their businesses negatively and gives the mines minister too much regulatory discretion.

“The chamber and the Department of Mineral Resources have been intensely engaged lately in a bilateral process aimed at minimizing areas of disagreement,” the organization said in a written submission to lawmakers. “Further engagement is required to resolve or minimize the areas of concern and further meetings have been scheduled. Many of these concerns if not all could be addressed in the bilateral process.”

South Africa is the biggest producer of platinum and chrome, and companies with assets in the country include Anglo American, BHP Billiton Ltd. (BIL) and Glencore Xstrata Plc. The government published planned changes to the law in December and received 80 responses, most which weren’t taken into consideration in the draft law that was submitted to Parliament.

‘Favorably Considered’

Musa Mabuza, deputy director-general of policy and promotion in the department, told lawmakers on July 30 that business was being won over to the proposed regulations and no adverse effect on investment is anticipated.

“While the chamber is aware that any agreement between it and the Department of Mineral Resources on the bill does not bind Parliament, it is hoped that such agreement would be favorably considered,” the industry body said. “It is further hoped that Parliament would support a process aimed at the chamber and the department minimizing areas of disagreement between them and afford them some time to conclude the current process as a matter of urgency before processing the law further.”

Peter Leon, head of Africa mining and energy projects at law firm Webber Wentzel, told lawmakers that several provisions in the draft law may be in violation of the Constitution and international treaties signed by the government.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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