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Mining, natural resources and infrastructure newsletter, June 2019 - South Africa

  • South Africa
  • Africa
  • Health and safety
  • Infrastructure


Read our full newsletter available in PDF.

As the saying goes, the only thing that is constant, is change. Constant change has been normalised to such an extent that it has become the accepted point of departure for all decision-making, particularly regarding investment, in the Mining, Natural Resources and Infrastructure sectors.

Commentators have consistently suggested that one of the key challenges faced by the Mining, Natural Resources and Infrastructure sectors, is policy and regulatory uncertainty. The suggestion has been that if these two related, but separate challenges could be addressed appropriately, then investment decision-making would be easier, and investment would flow more freely into these sectors, in South Africa, and the rest of Africa.

One of the key policy and regulatory uncertainties that has impacted on the South African Mining and Natural Resources sectors, and to a lesser extent, on the Infrastructure sector (to the extent that mining infrastructure is a substantial component of the broader infrastructure sector), has been the long-running controversy surrounding what has commonly been referred to as Mining Charter 3. The Broad-Based Socio Economic Empowerment Charter for the Mining and Minerals Industry 2018 (“Mining Charter 3”), published on 27 September 2018 was regarded by many stakeholders, as a significant step forward after the troublesome years under the previous Minister of Mineral Resources, Mr Zwane.

The publication of Mining Charter 3 in September 2018, followed extensive engagements between the new Minister of Mineral Resources, Mr Gwede Mantashe, and industry stakeholders. Unfortunately, the publication of the Interpretation Guidelines, and then various amendments to Mining Charter 3, in December 2018, once again resulted in extensive debate, and uncertainty regarding various elements of Mining Charter 3. In this newsletter, we address some of the interpretational challenges surrounding Mining Charter 3, and the current legal challenges that have been brought in relation to Mining Charter 3.

There have been a number of recent judgements by the South African courts that have impacted on the Mining and Natural Resources sector, including what are commonly referred to as the Baleni Judgement and the Maledu Judgement, which have impacted on the discretion of the Minister of Mineral Resources to grant rights under the Mineral and Petroleum Resources Development Act, No. 28 of 2002. The recent private prosecution of BP Southern Africa Proprietary Limited by Uzani Environmental Advocacy CC, for environmental contraventions, has also raised various concerns for the Mining, Natural Resources and Infrastructure sectors. We address these three judgements, in more detail, in this newsletter.

We have, over the last eighteen months or so, focused on the importance of understanding, acknowledging, and preparing for the impacts of the Fourth Industrial Revolution (“Industry 4.0”), the Internet of Things (“IoT”), and Artificial Intelligence (“AI”). While we have focused on some of the more positive consequences of Industry 4.0, IoT and AI, there are of course a number of actual or perceived negative consequences, and in this newsletter, we delve a little deeper into some of these consequences.

It has been positive to see the change in approach by several investors when it comes to engaging, meaningfully, with communities that are located in and around existing and proposed mining operations. The importance of obtaining the “social licence” to mine has never been more critical, and we talk about some of the ways in which the community engagement process has changed for the better.

We also discuss some of the important changes that are addressing health and safety in the Mining, Natural Resources and Infrastructure sectors.

We have included a “Guest Corner”, and in this newsletter, we feature an article prepared by Tanya Pollak and Yashika Rowjee on the importance of including proper force majeure clauses in service level agreements, and an article by Tanya Pollak and Carmen Moss-Holdstock on South Africa’s employment tax incentives, aimed at encouraging employers to employ young job seekers. Both these articles are directly relevant to the mining, natural resources and infrastructure sectors.

We hope that you enjoy reading the articles, as much as we enjoyed preparing them for you. We look forward to engaging with you on any of the subjects that we have addressed in the articles.

The fourth industrial revolution, automation, the internet of things and artificial intelligence can have a positive impact on mining, natural resources, and infrastructure sectors

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Private prosecutions – the changing face of compliance in South Africa

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Health and safety in the workplace: how important is it?

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Engaging with communities – has the Minister of Mineral Resources been tied up in knots?

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Disruption in the African mining and natural resources sector

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Has the publication of Mining Charter 3 brought some policy and regulatory certainty to the embattled mining and natural resources sector?

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Guest section: The significance of force majeure provisions on contractual arrangements

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Guest section: South Africa’s employment tax incentive 

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