Submission on the Mineral and Petroleum Resources Development Bill

1. Submission on the Mineral and Petroleum Resources Development Bill Vuyani Ncoko Smart Geosciences cc Geological & Geophysical Contractors & Consultants

2. Contents • To comment on: • Section 2(d) of the Act • Section 17(1)(a) of the Act • Other experiences • Prosecting/ Exploration Finance • Anglo Khula • Small Scale Mining Finance • Small Scale Mining and Beneficiation • SSMB Case History • SSMB: Suggestions

3. Section 2(d) “substantially and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources.” • Implementation:

4. Section 2(d): Application Forms; e.g Prospecting Right • PART B: OWNERSHIP OF PARTICIPATION BY HISTORICALLY DISADVANTAGED SOUTH AFRICANS (HDSA) • *(the completion of Part B is optional for applications for a prospecting right) • Please mark the appropriate block regarding the ownership or participation by Historically Disadvantaged South Africans: • HDSA controlled: 50% + 1 vote HDSA • Strategic Partnership: 25% + 1 vote HDSA • Broad-based Ownership: HDSA dedicated mining unit trusts, employee share or ownership schemes.

5. Section 2(d) • 100% HDSA owned - excluded • Prospecting Right Contract • Section 16 “Provisions relating to section 2(d) of the Act” ‘In the furthering of the objects of this act, the Holder is bound by the provisions of an agreement or arrangement dated …….. Entered into between the Holder/ empowering partner and ……….. (the empowerment partner) which agreement or arrangement was … ‘

6. Section 2(d) • If applicant is 100% HDSA, • Imply founder members are the empowerment partner of the Holder • Whereas the members are the company • Paragraph designed for foreign Co. • Need BEE partner • Suggestion: • An alternative paragraph • Acknowledging 100% HDSA ownership • One paragraph to be deleted on drafting the Contract

7. Section 17(1)(a) • “the applicant has access to financial resources and has the technical ability to conduct the proposed prospecting operation optimally in accordance with the prospecting work program” • Implementation:

8. Section 17(1)(a) THE APPLICATION MUST BE ACCOMPANIED BY THE FOLLOWING: • A. Details of the land or area Provide a plan as contemplated in regulation 2(2). • B. Prospecting work programme Full particulars of the prospecting work programme contemplated in regulation 7. • C. Financial and technical competence Provide details and documentary proof of the applicant's technical ability and financial resources compatible with the prospecting work programme that are readily available or how they will be provided for, to enable the applicant to carry out the prospecting activities in terms of the prospecting work programme and to mitigate and rehabilitate relevant environmental impacts satisfactorily. • D. Title deed(s) in respect of land Provide a certified copy or copies of the title deed or deeds in respect of the land or area to which this application relates. • E. Existing rights and past compliance with provisions of the Act

9. Section 17(1)(a) • Implications: • Both technical and financial resources in-house; or • Agreement with a company known to have these capabilities in-house • E.g. AAC, Rio Tinto, De Beers, Mvela Resources, etc.

10. Section 17(1)(a) • Not cater for • Company A: has technical capabilities – no money • Company B: financially sound – no expertise • A or B lodges an application with • B backing A or A backing B; • agreements signed • Creates difficulty with mine economics personnel

11. Section 17(1)(a) - Suggestion Suggestion: • divide section into two independent sections • implications: • Financial competence: • provide proof of financial resources to fund the prospecting work program, • E.g., if Prospecting Work Program costs R5million, • applicant must provide proof of access to R5million. 2. Technical competence: • then provide proof of technical capability or access thereto.

12. Other experiences • Regulation 2(2)(a) “the co-ordinates and spheroid (Clarke 1880/Cape Datum, WGS84/WGS84, WGS94/Hartebeesthoek94) of the land to which the application relates;” • Regional Offices demand co-ords

13. Other Experiences • If the prospecting area is greater or less than a farm portion, please supply the co-ordinates of the corner points of the area/s in degrees, minutes and seconds or decimal degrees or LoX and LoY or indicate on Topocadastral map(s). In the case of applications based on Topocadastral maps, the applicant must seek assistance from the Enquiry desk at the relevant Regional office. With reference to co-ordinates, provide in decimal degrees. • If possible, please provide the co-ordinates in a digital format e.g. ASCII* file (longitude, -latitude). When co-ordinates is provided in ASCII format, the LO, spheroid and datum information must still be completed on this form. • If the application is for a whole farm portion/s there is no need to provide co-ordinates. • * An ASCII (American Standard Code for Information Interchange) file is any form of text file that can be interchanged between different users and interpreted through any software.

14. Other Experiences • Consultations: Section 16(4)(b) • Farmers demand PWP and EMPlans • Who is supposed to provide these to them • Chiefs demand 26% participation • Problem when time comes to finance own portion

15. Prospecting /Exploration Finance • Finance problem: • No money for exploration/ prospecting by banks, IDC, NEF etc. • Anglo Khula • “to facilitate the entry of HDSA junior mining companies by funding feasibility studies up to the completion of a Bankable Feasibility Study” • DME refuses to grant - demands Anglo Khula’s audited financial statements • What then? • How do we get HDSA players in the sector?

16. Small Scale Mining Finance • Small Scale Mining and Beneficiation • A number of needy companies • Problems: • Takes too long to get decision If granted: • Lack of communication btw SSMB and client • Client not consulted when payments are made if there are any • CGS slow

17. SSMB Case Study

18. SSMB: Suggestions • Communication, communication!!! • CGS delays not acceptable • outsource work to HDSA consulting and contracting companies • Skills transfer

19. MPRD Bill • Well… these are our thoughts!! • I thank you!