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Environmental Obstacles to the Granting of South African Mining Rights - International Law Office

International Law Office

Energy & Natural Resources - South Africa

Environmental Obstacles to the Granting of South African Mining Rights

July 28 2008

The Mineral and Petroleum Resources Development Act (28/2002) sets out the criteria for the granting of prospecting and mining rights in respect of minerals on South African soil. The holder of a prospecting right has the exclusive right to apply for the mining right for a specific mineral over specific land. To be granted a mining right the applicant must, among other things, conduct an environmental impact assessment and submit an environmental management plan to the Department of Minerals and Energy for approval. The applicant must also notify and consult with interested parties within a set timeframe: 180 days from the date on which the application is accepted by the department.

The department may not approve a plan unless it has considered any recommendations and comments from related state departments, such as the Department of Environmental Affairs and Tourism. The Department of Minerals and Energy must then grant its approval, provided that:

  • the information contained in the management plan meets with the requirements set out in the act;
  • the applicant has made financial provision for the rehabilitation of negative environmental impacts; and
  • the applicant has the capacity to rehabilitate and manage negative environmental impacts.

Transworld Energy Minerals, the South African subsidiary of Australian mining company Mineral Resource Commodities, is the holder of the right to prospect for ilmenite in the sand dunes at the Wild Coast, an area of natural beauty on the southern coast of South Africa. Recently it applied to the department for a mining right over this area, as it was entitled to do as a result of its prospecting rights. However, the application has met with opposition.

Local communities have alleged that they were not properly consulted and have lodged a complaint with the Human Rights Commission. The Department of Environmental Affairs and Tourism also lodged a formal objection to the proposed development, albeit outside the stipulated time period. Some argue that the proposed mining development (estimated to be some 15 million tonnes of ilmenite per year for the next 20 years, that being the lifetime of the mine) will bring necessary economic benefits to a highly impoverished area. Others argue that the proposed development will destroy an area of natural beauty and will cause economic loss to the area by deterring tourists.

The department has not yet made a decision on the mining right application, but it is expected that the decision will reveal something about the South African government’s current approach to balancing environmental and mining interests, local and national interests, and foreign and South African interests.

For further information on this topic please contact Dimitri P Cavvadas at Fasken Martineau by telephone (+27 11 685 0800) or by fax (+27 11 685 0818) or by email (dcavvadas@jnb.fasken.com).

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