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Moratorium on new prospecting right applications pending licence audit

17 August 2010 at 8:10 pm

  • Information on status of licensing applications to be available on DMR website from 1 Sept
  • Prospecting rights will now be issued by Head Office, and no longer by Regional Offices
  • List of amendments to MPRDA to be submitted to Parliament

SAPA — There will be a six-month moratorium on new prospecting applications while a full audit of all mineral rights granted since 2004 is conducted, Mineral Resources Minister Susan Shabangu announced on Tuesday.
She also promised greater transparency in the way rights were allocated, and an immediate centralisation of the issuing process.
The moves were aimed in part at combating perceptions of corruption and inefficiency, she said in a statement.
Her announcement comes amid growing concern over allocations under the Mineral and Petroleum Resources Development Act (MPRDA), most recently over Sishen iron ore mining rights, and prospecting rights for secondary minerals at a Lonmin platinum mine.
The act, which came into force in 2004, vests all mineral rights in the state.
Business Leadership SA warned on Tuesday that the controversies were affecting confidence in the country.
Shabangu said in Tuesday’s statement that she had noted what she called the “growing negative sentiment” regarding the mining sector’s regulatory framework.
“There is no doubt that clouds have been gathering over our country’s mining reputation and I want to reassure all our stakeholders that South Africa is indeed a mining jurisdiction worthy of future investment,” she said.
She said it was clear the act contained “a number of ambiguities”, and that the lack of transparency in and access to her department’s licensing data was causing unnecessary suspicion.
It was also clear that her department had administrative capacity problems and that there were increasing perceptions of corruption and incompetence.
Shabangu said a number of amendments to the act, including one dealing with the order in which applications were processed, would be submitted to Parliament as soon as possible.
With effect from September 1, information on the status of exploration and mining licences would be accessible on the department’s website.
“This is in the interest of transparency and means that all stakeholders, including members of the public, will have access to our new electronic administrative system,” she said.
In the interim, her department was developing a new system of “license-process-tracking” which would be ready for public access within the next six months.
“With effect from 1 September 2010, we will impose a moratorium on the receiving of prospecting applications,” she said.
“The moratorium is to be published in the Government Gazette shortly and will last for six months to allow for a comprehensive audit of the licences granted since the promulgation of the MPRDA.”
All other existing licensing activities would, however, continue as normal.
With immediate effect, prospecting rights would no longer be issued at regional level and would instead be issued from the department’s head office.
Officials with the rank of chief director would, from September 1, be deployed to regional offices to strengthen leadership and oversight at “the coalface of service delivery”.
Shabangu said it was important to consider that her department had dealt with no less than 25,600 license applications since 2004.
An ongoing internal investigation had revealed more than a hundred cases of apparent administrative irregularities.
It had been decided that all cases of double-granting of licenses would be resolved within the next three months.
Allegations of abuse of office or corruption would be dealt with speedily and effectively.
“Toward this end we would like to encourage the media and the general public to furnish us with the relevant information,” she said.
“I am confident that these measures will produce the desired results to ensure that South Africa continues to rise in the global rankings as a reputable mining jurisdiction.”

Download the Minister’s full address here.