The new mineral resources law, which awaits the president’s signature, faces growing opposition as the mines minister seeks a review, according to law firm Webber Wentzel.
Proposed changes to the 2002 Mineral and Petroleum Resources Development Act include giving the state the right to a free 20 percent stake in all new energy ventures and to change how projects are awarded. Firms such as Exxon Mobil, Anadarko Petroleum and Total say the law, passed by Parliament and the higher National Council of Provinces this year, will undermine their businesses and deter investment.
Mineral Resources Minister Ngoako Ramatlhodi, sworn in last month, said President Jacob Zuma must hold the bill so legislators address some clauses, the Financial Times reported on Wednesday. Another option could be to draft a bill for oil and gas, separate from mining, Ramatlhodi said.
“Certainly it created a real damper on exploration activity, the bill, and we heard from a lot of clients that everything was being put on hold,” Peter Leon, the head of Africa mining and energy projects at Webber Wentzel, said yesterday.
“I think the government has realised that, hence the about-turn by the new minister.”
Ramatlhodi was planning a meeting of the ANC’s economic committee to go through the bill on Monday.
Exxon, Anadarko and Royal Dutch Shell have begun prospecting in South Africa’s waters over recent years as new technology boosts their ability to find and pump oil from deep beneath the seabed. Anadarko said in April it halted spending on exploration in the continent’s second-biggest economy because of the legislation.
Zuma was obliged to sign a bill unless there was a question about its constitutionality, which there was, Leon said.
“The bill was not correctly passed by the National Council of Provinces because they never held public hearings” in each of South Africa’s nine regions, he said.
The DA “and the Legal Resources Centre wrote to the president and asked him not to sign the bill into law and I understand that he has taken legal advice on that.
“Now that the mines minister has weighed in as well, that will have another impact,” Leon said.” – Bloomberg