How to Obtain the Right to Mine in South Africa

South Africa has the world’s fifth-largest mining sector in terms of gross domestic product value. The mineral wealth of the nation presents an opportunity for mining operations to be conducted on a large scale. However, due to the widespread disregard for legal processes, the mining sector of South Africa has been tainted by illegal mining operations which has had a devastating impact. The purpose of this article is to outline the legal process which ought to be followed in order to obtain the right to mine in South Africa.

The Mineral Wealth of South Africa

South Africa is home to the world’s largest reserves of gold, platinum group metals, chrome ore and manganese ore, and the second-largest reserves of zirconium, vanadium and titanium.

Furthermore, the nation is also endowed with the world’s largest resources of platinum group metals (87,7% of world total), manganese (80%), chromium (72,4%), gold (29,7%), alumino-silicates and accounts for over 40% of global production of ferrochromium, platinum group metals and vanadium.

The mining industry contributes 51,7% of world ferrochromium exports and 54% of alumino-silicates. It is also one of the world’s largest exporters of platinum group metals, gold and vanadium, and a significant exporter of manganese ore.

The cost of illegal mining activities:

Economic impacts:

• A loss of R20 billion a year.
• Uncontrolled theft of copper, electricity cables, dragline cables, and diesel, which degrades the mining infrastructure.
• Increases in security costs and costs related to unnecessary stoppages, repairs and maintenance.
• Cost to state and mining companies to commission Mines Rescue Services for rescues.
• Unquantifiable environmental and social costs.

Social impacts

• Influx of undocumented immigrants (90% of arrested illegal miners are undocumented immigrants).
• Significant safety and health risks to illegal miners as well as communities.
• Increase in crime and illegal trade.
• Destroys the social fabric of mining communities.
• Risk of loadshedding.
• Threats to employees, booby traps, and tampering with mine equipment.

How to obtain a Mining Right in South Africa:

The granting of mining rights is governed by the Minerals and Petroleum Resources and Development Act 28 of 2002 (“MPRDA”). The Minister and the Department of Mineral Resources and Energy (“DMRE”) decide who is allowed to mine and also where they are allowed to mine.

A mining right is only granted if:

• The mineral can be effectively mined, and the proposed operation can be conducted optimally with the necessary funding and expertise.
• The financing plan is suitable for the intended mining operation and its duration.
• The mining operation must not result in environmental damage.
• The necessary financial and other provisions for the prescribed social and labour plan must be in place and should not violate the MPRDA.
• The operation must be consistent with the Mining Charter.

The documents you require are as follows:

• Copy of identity document: An individual applicant must attach a certified copy of the identity document.
• A certified copy of the certification issued by the CIPC.
• Applicants must apply for environmental authorisation under NEMA, 2008, and NEWMA, 2008 for listed activities.
• The applications are done online through the Department of Mineral Resources and Energy.
• The contact email is: samradonline@dmr.gov.za
• There is a non-refundable application fee payable of R100.00.

An individual or a company cannot start mining in South Africa without the necessary authorisation. There are legal requirements that must be satisfied and complied with before a mining right is granted. These legal requirements are not unreasonable economic barriers but are safeguarding mechanisms to ensure that when mining operations take place, it is within legal bounds.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.