Last-minute changes to South Africa’s minerals law cause investor insecurity
South Africa’s last-minute amendments to its Minerals and Petroleum Resources Development Act (MPRDA) have raised concerns about the government’s intentions towards mining projects in the country.
The amendments state that for all oil and gas projects, in which the government will have a 20% free-carry interest, the government will now also have the option to buy the remaining 80% of these projects at “an agreed price”, instead of a market value price.
These changes have raised questions over what the government of the day might be able to impose on mining companies in the future, according to James Lorimer, shadow minister of the opposition party, Democratic Alliance.
“The law would only be enacted once the president signs it, and a lot can still change until then,” he told Metal Bulletin on Friday March 14.
However, he said he thinks it is unlikely that the government will impose constraints on mining companies similar to those in the oil and gas sector.
The news follows the South African National Assembly’s approval earlier this week of amendments to the act that will grant the minister of mineral resources sweeping discretionary powers over metals exports, which also concerned investors.
Publish date : Wednesday 19 March 2014 00:40
Story Code: 5589