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 nations 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

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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

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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

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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

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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.

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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

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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.

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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 Khulas
  audited financial statements
• What then?
• How do we get HDSA players in the sector?

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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
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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!