Legislation can make or break a country’s mining industry. A sustainable mining sector requires clear and robust regulations that cover anything from environmental protection, community interests, transformation, and health and safety to national revenue.

‘Environmental and other mining law frameworks are continuously evolving in Africa, and it’s critical that the mining sector keeps abreast of key legislative and regulatory developments, which are likely to shape and reshape mining strategies and compliance obligations,’ says Paula-Ann Novotny, partner at Webber Wentzel law firm. ‘This is particularly important as the global energy transition accelerates, driving matters of operational integrity, investor confidence and long-term resilience to become key governance metrics.’

In May 2025, South Africa published the Draft Mineral Resources Development Bill for comment, in what is going to be the mining sector’s biggest regulatory overhaul in more than two decades. The proposed legislation will replace the 2002 Mineral and Petroleum Resources Development Act (MPRDA). In an unusual move, the Minister of Mineral and Petroleum Resources amended the Bill by an erratum notice during the public comment period, correcting certain controversial aspects. ‘The strategic objective of the draft Bill includes (i) ensuring policy and regulatory certainty and enhancing investor confidence; and (ii) reducing bureaucratic inefficiencies and improving turnaround times for mining rights, permits and regulatory approvals,’ says Bowmans Attorneys. The law firm cautions that several provisions may in fact deter investment instead of attracting it.

In its effort for clarity, the Bill intends to separate mining from petroleum regulation. ‘The Bill’s proposed definition for “mineral” explicitly excludes “petroleum”, ensuring a distinct legislative approach for each sector,’ says James Ross, director of corporate and commercial law at Cliffe Dekker Hofmeyr. ‘We recommend that clients involved in both mining and petroleum activities undertake a thorough review of their portfolios to confirm which operations fall under the Bill’s mining-centred regime and which activities will rather fall within the standalone petroleum legislation.’

Industry stakeholders have strongly criticised the proposed legislation. The Minerals Council South Africa, which represents 90% of the country’s mining industry, says it will engage with the Department of Mineral and Petroleum Resources on key elements of the Bill, such as beneficiation, empowerment, tailings and mine closure provisions – all of which ‘rely heavily on unpublished regulations and, in their current form, are potentially disruptive to mining operations and potential investment’.

‘There are a number of welcome proposals in the Bill, and a number which, if enacted in the current form, would result in increased regulatory uncertainty,’ says Ntsiki Adonisi, ENS head of natural resources and environment. Section 11 of the MPRDA under the Bill (as corrected by the erratum notice) is one of the most controversial provisions, which the ENS lawyers say appears to create further ambiguity and confusion on how to practically apply this section.

‘The Bill provides that ministerial consent is required for a disposal of “any interest” in an unlisted company holding a right,’ says Adonisi. ‘The broad language used in section 11 seems to include transactions that do not alter the effective control of the company, thereby imposing an onerous and disproportionate regulatory burden on companies and their shareholders. The requirement for ministerial consent for every change in interest will result in substantial delays in transactions.’ And the absence of prescribed timelines for the processing of ministerial consents further exacerbates the delays, she says.

Another controversial provision centres on mandatory beneficiation. The Bill introduces a mandatory obligation on producers to make minerals available locally, but with limited details.

ENS explains that in terms of the proposed section 26(2)(c), the minister is empowered to publish conditions to ensure security of supply for local beneficiation.

‘Despite this, the Bill does not provide detailed guidance on how “security of supply” will be determined, nor does it specify which mineral resources will be subject to these requirements or the process for stakeholder engagement in setting these conditions,’ says Adonisi. ‘While the policy rationale is acknowledged, this will likely affect commercial flexibility for mining companies, particularly in respect of existing offtake agreements and export arrangements. Other concerns arising from this relate to the potential for the minister to intervene in the allocation and pricing of mineral products.’

The regulation of historic residue stockpiles is yet another contentious provision. The Bill seeks to bring pre‑MPRDA dumps (which constitute movable assets as held by the courts) within the ambit of the MPRDA regime with a two‑year ‘regularise or risk reversion to state custodianship’ pathway, says Adonisi. ‘This raises expropriation risk concerns. If the state wishes to expropriate historical dumps, the state must do so by law of general application and make provision for compensation for such expropriation,’ she says.

Interestingly, the Bill introduces a new definition for ‘associated minerals’, which are minerals that are physically inseparable from the primary mineral. ‘Holders must declare and apply to include them in mining rights under section 102,’ reports Bishop Fraser Attorneys (BFA). ‘This resolves uncertainty in multi-mineral deposits.’

However, ENS argues that the mandate to mine or dispose of associated minerals (and to seek inclusion within 60 days) assumes that no one holds associated minerals. ‘The Bill lacks a clear framework for overlapping titles and working arrangements, creating legal uncertainty,’ says Adonisi. ‘Most converted mining rights are in respect of primary minerals and the associated minerals.’

Over and above the highlighted concerns, she notes that the absence in the Bill of clear investment promotion measures is a missed opportunity. Not only that, but she says the Bill’s failure to introduce clear and enforceable timelines for administrative acts only serves to perpetuate the delays and backlogs experienced in the industry.

In a first for the industry, the Bill introduces a dedicated licensing regime for artisanal and small-scale mining (ASM) operations to include disadvantaged groups and curb illegal mining. These miners predominantly operate outside the law in South Africa – under dangerous conditions in the country’s more than 6 000 abandoned mines – because the barriers to entry are so high in the formal mining industry.

‘A new licensing regime under section 27A introduces artisanal mining rights, limited to 1.5 hectares and valid for up to two years,’ says BFA. ‘Section 27 of the MPRDA will regulate “small scale” mining permits. The minister may designate areas and invite applications, particularly from historically disadvantaged persons. Sections 5B and 5C introduce offences for aiding illegal mining and handling minerals without proper documentation.’

Illegal mining is a massive problem, especially when linked to organised crime syndicates. According to official figures, South Africa lost an estimated ZAR60 billion to illegal precious metal trade in 2024 alone. The Minerals Council has called for a dedicated national strategy to combat illegal mining, stronger law enforcement co-ordination and improved border control to curb smuggling. This requires legislation that makes illegal mining a serious criminal offence rather than simple trespassing, triggering harsher penalties.

The Bill’s proposed penalties have raised serious concern. ‘Fines up to 10% of South African turnover and exports, plus criminalisation of section 11 breaches, are viewed as disproportionate and chilling to commerce,’ says ENS.

‘The proposed penalties do not sufficiently deal with illegal mining. Tying a fine to turn- over for illegal mining could make the penalty meaningless for illegal miners, offering little deterrent to individuals with minimal or no turnover.’

Fundamentally, if it can enhance or impede a mining industry, the proposed legislation will require amendments to deliver much-needed clarity, stability and credible investment incentives.

By Silke Colquhoun
Images: iStock