Ominous shadow of bill that will hobble mining's potential
THE Mineral and Petroleum Resources Development Amendment Bill, which is before Parliament, seeks to impose a raft of unrealistic requirements on a mining industry already facing a maelstrom of adverse conditions. Problems confronting the sector range from erratic electricity supply and faltering commodity prices to warring unions, unrealistic wage demands and soaring input costs. In these circumstances, the government should be doing all it can to promote regulatory certainty, as it in fact promised to do in the Framework for a Sustainable Mining Industry that it signed in July.
Instead, it obliges the minister of mineral resources to "initiate or promote" local beneficiation irrespective of whether it can be done cost-effectively. It also gives the minister unfettered discretion to decide the percentages of minerals required for beneficiation, along with the "developmental pricing conditions" to be applied "in the national interest".
But Eskom cannot supply the electricity needed for smelting and similar processes. Nor does South Africa have the engineering and other skills required for making many end products.
Its labour costs are also much higher than those in competitor countries such as China and India. Such factors render the bill’s insistence on domestic beneficiation unrealistic and harmful.
The bill also empowers the minister to impose export controls on any minerals she "designates" as needed for beneficiation.... Read the full, comprehensive news article and discuss at Business DaySimilar Stories