Overview

Few industries have changed as dramatically as South Africa’s mining and energy sector. Once dominated by a handful of private mining companies, the sector has seen private ownership of mineral rights converted to state custodianship, a new-order licensing regime and black economic empowerment obligations imposed on local and foreign players.

These developments are provided for in the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) that came into effect on 1 May 2004, necessitating fundamental changes in the way mining companies operate in relation to ownership structures and the acquisition of rights to prospect and mine.

The evolving regulatory landscape (including the Mining Charter, as amended, and the Codes of Good Practice for the Mineral Industry) has not been without controversy and has resulted in a growing number of administrative disputes over the granting of prospecting and mining rights. In addition, mining companies are subject to increasingly stringent environmental regulation, particularly around waste management and rehabilitation of the surface of the earth disturbed during prospecting and mining.

The Werksmans Mining & Resources Practice has a well-established international network and extensive experience in structuring mining transactions to meet legislative and regulatory requirements including the impact of the Mineral and Petroleum Resources Royalty Act. Mining clients include North American, European and Australian companies, as well as some of the major South African mining houses and empowerment mining companies.

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