Johannesburg - The proposed new mining bill could send South Africa's international attractiveness rating further down, the SA Institute of Race Relations (SAIRR) said on Wednesday.
“The new mining bill could send South Africa tumbling even further down the Fraser index,” said spokeswoman Anthea Jeffrey in a statement.
She said South Africa had dropped to 64 out of 96 in the 2012/2013 Fraser Institute’s international policy potential index.
The index measures the attractiveness of a country to investors from different mining countries.
Jeffrey said: “If the draft Mineral and Petroleum Resources Development Bill of 2012 is made law, the country’s score is sure to tumble further.... For the bill ignores economic reality, while giving the mining minister many more discretionary powers.”
There would be a number of obstacles involved with implementing the bill, including competitive pricing, Jeffrey said.
She said the bill had extraordinary rules.
“Under the bill, mining companies that fail to promote beneficiation, irrespective of how uneconomic this might be, will face fines of up to five percent of annual turnover.”
“It could also see key managers and directors sent to prison for a period of up to 10 years.”
In October, veteran ANC MP Ben Turok and others held a meeting to which the government, media, academics, engineering councils, mining companies and unions were invited.
Clarification on the meaning of beneficiation was discussed.
Turok defined beneficiation as the transformation of a mineral or a combination of minerals to a higher value product.
In a presentation, the value chain of beneficiation was explained as consisting of exploration, extraction, processing, beneficiation, semi-fabrication, and fabrication.
“South Africa has been judged as the best resourced mineral country in the world. However, the beneficiation of these minerals is very low,” he said.
South Africa held 88 percent of the world's reserves of platinum group metals, but only 0.4 percent of these metals was beneficiated locally. - Sapa