Development of framework for streamlining prospecting and mining right application process in South Africa

Abstract

Mining has been one of the most significant contributors to South Africa's social and economic progress. South Africa is endowered with a diverse of minerals and mining activities are driven by large corporations and small-scale miners. However, the legislative uncertainty undermines the role of the small miners in society and the economy. This is despite interventions by the government, through legislation, which affords everyone an opportunity to participate in mining, through acquiring prospecting and mining right applications. The promulgation of the Mineral and Petroleum Resources Development Act (MPRDA), 28 of 2002, was meant to address the imbalances of the past which amongst others include inequitable access to “the nation's mineral and petroleum resources”. Some of the requirements needed for exploration and mining rights applications to be granted have been seen as stumbling blocks for Historically Disadvantaged South Africans (HDSA’s) and emerging junior miners, to fully participate in the sector. For example, finances and technical availability is one of the main reasons why HDSA’s haven’t participated fully in the mining activities of the country. This study proposes a framework, which aims to assist HDSAs and emerging miners to participate in the mining industry through acquisition prospecting and mining rights. The research data was collected in two phases. Phase one was the quantitative phase. In this phase, questionnaires were circulated to more than 50 potential respondents involved in the mining and related sectors. The quantitative data was analyzed statistically for interpretation. The second phase of data collection was done through qualitative method, where specific questions were sent to 10 experts in the sector. The results were also analyzed through the identification of common themes and interpreted to contribute to the design of the framework. The results of this study show that although the MPDRA provides emerging junior miners with the prospect to enter the mining industry, there are still barriers or hindrances blocking them from entering the mining industry. Challenges ranged from the initial compilation of documents, processing of the applications and requirements which need to be met, to departmental challenges. The study reveals that historically disadvantaged South African and emerging miners, do not have the necessary skills to compile applications and attach relevant documents to meet certain regulatory requirements. In addition, the study shows that the Department of Mineral Resources and Energy (DMRE) expects historically disadvantaged individuals and emerging miners to provide proof that they have the financial and technical ability to carry out the proposed prospecting and mining right works programmes. Financial and technical requirements have been the common areas that results in prospecting and mining rights applications being declined. Moreover, the internal process at the DMRE seemed to favor large-scale mining companies, who have financial resources and technical expertise to carry out prospecting or mining rights. The framework for streamlining prospecting and mining rights applications will create an environment that enables indigenous people and emerging junior miners to obtain prospecting and mining rights and will provide economic growth for smaller communities. It will also afford the DMRE to have better control, by providing a section, which will be dedicated to assisting historically disadvantaged people and emerging junior miners by providing guidance in terms of the application process and also recommending for funding.