Mark Thomas and Christopher Majuru, mining dispute resolution specialists at Pinsent Masons, were commenting on the General (Mining) Laws Amendment Bill (7 pages/298 KB PDF) published on 7 August, with public submissions and stakeholder comments on the bill to close on 11 September.
The legislation proposes a range of changes aimed at tackling illegal mining activity, including significantly increased penalties for facilitating illegal mining and expanded enforcement powers.
The proposals include the creation of a new offence prohibiting any person from assisting or providing services that enable illegal mining activities, whether directly or indirectly, and granting members of the South African Police Service (SAPS) all the powers of an authorised person to enter a mining area under the Mineral and Petroleum Resources Development Act (MPRDA) including the powers conferred under the Criminal Procedure Act (CPA) – although excluding the power to conduct routine inspections and to issue and enforce compliance notices.
The proposed measures cater for the modern challenges faced in the South African mining sector and have been broadly welcomed by industry stakeholders, particularly given the growing challenges posed by illegal mining and related criminal activity in the sector.
While it is illegal to prospect and mine without the requisite permits and approvals, one of the notable proposed amendments is the extension of the prohibition to third parties in the illegal mining supply chain. Specifically, the proposed section 5B prohibits any person from assisting or providing any service to any person, directly or indirectly, which enables or aids another in illegal mining.
The bill also creates liability for any person who unlawfully and intentionally attempts, conspires with any other person, or aids, abets, induces, incites, instigates, instructs, commands or procures another person to assist or provide any service to anyone engaged in illegal mining.
Another proposed amendment would empower members of the SAPS, in respect of an offence under the MPRDA, to exercise all the powers of an authorised person under section 91. These powers include entering a mining, reconnaissance or prospecting area to obtain evidence if there is reason to believe that there is or has been a contravention of the MPRDA.
SAPS members are expressly excluded from the power to conduct routine inspections and from the power to issue and enforce compliance notices. However, the minister may assign to a specific SAPS member certain compliance powers on a case-by-case basis after consulting with the minister of police, so the default exclusion is not absolute. The changes are intended to strengthen regulatory oversight and enhance the state’s ability to identify and respond to non-compliance more effectively.
The bill would also dramatically increase penalties for certain offences under the Precious Metals Act, Diamonds Act and MPRDA. For example, no person is entitled to have an unpolished diamond in their possession, subject to a list of people who can. However, if the person does not fall into one of the listed categories, and they are convicted of an offence, the bill proposes that the maximum fine for the breach increase from R250,000 (approximately US$15,600) to R100 million (approximately US$6.2 million), and the maximum term of imprisonment rise from 10 years to 30 years.
The proposed changes reflect the South African government’s continued focus on combating illegal mining and strengthening enforcement mechanisms across the sector.
Mark Thomas said: “The amendments underscore the importance of robust KYC and compliance frameworks for any company in the mining value chain. Businesses should review existing relationships and operational controls to ensure they align with the heightened enforcement and liability landscape contemplated by the bill.”
Christopher Majuru said: “Although the proposals are a welcome step towards addressing illegal mining and strengthening regulatory oversight, mining sector participants should closely monitor the bill’s progress. Mining companies in particular will need to understand how the expanded enforcement powers and increased penalties could affect their interactions with regulators and law enforcement authorities.”
