South Africa: Mining licence process map
What is the process for awarding mining rights in South Africa? What steps must the company and the government follow?
These ‘maps’ present this process as a step-by-step guide. They sheds light on a process that is often complex and complicated, making it more transparent.
Corruption Watch has produced three process maps – two that describe the process of awarding mining licences and one that describes the process of obtaining environmental authorisation to mine.
The first details the process of awarding mining rights for small-scale mining, and the second details the process of awarding prospecting and mining rights for mid to large-scale operations.
Read more about the process below and download the process map to see what steps exactly a company must follow to obtain permission to mine. You can also read about Corruption Watch’s work to assess and mitigate the corruption risks in the process of awarding mining permits in South Africa, via the South Africa country page link below.
See also:
Mining permit
This document describes the process of obtaining a mining permit for small-scale mining.
Under South African law, all mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans.
The Mineral and Petroleum Resources Development Act (‘MPRDA’) sets out the framework for mineral governance. Access and use of land above mineral or petroleum resources requires a balancing of legal rights and interests exercised between key stakeholders in order to ascertain whether mining can take place on occupied/ traditional, private owned land.
The department of Mineral Resources and Energy headed by the Ministry of Mineral Resources and Energy is responsible for the awarding mining permits.
In South Africa the key pieces of legislature regarding the awarding of mining permits are the MPRDA, the Broad-Based Socio-Economic Empowerment Charter (‘Mining Charter’), and the National Environmental Management Act (‘NEMA’).
Mining permits can only be authorised if minerals can be mined optimally within a period of two years. The permit is valid for the period specified in the permit, which may not exceed a period of two years, and may be renewed for three periods, each of which may not exceed one year.
Mining and prospecting rights
The process of obtaining a prospecting right in South Africa and the process of obtaining a mining right are virtual the same. This document described both processes.
The Mineral and Petroleum Resources Development Act defines and governs both processes.
The Minister of Mineral Resources and Energy grants a prospecting right if the application meets the legislative requirements of section 17 of the MPRDA. The same minister grants a mining right if the application meets the requirements of section 23.
A prospecting right is valid for five years and may be renewed for a period of no longer than three years. A mining right comes into effect on the effective date on which the right is executed. It may be reviewed for further periods, not exceeding 30 years at a time.
Section 104 (1) of the MPRDA also provides for the granting of “preferential right to prospect or mine” to a traditional community to prospect on community land.
A unique aspect of prospecting right is the ‘use it or lose it’ principle, which states that the holder of a prospecting right should commence prospecting activities within 120 days from the date on which the prospecting right becomes effective. Furthermore, according to section 20 of the MPRDA, the holder of a prospecting right may only remove and dispose of any mineral found during prospecting operations in quantities as may be required to test, identify or analyse it.
Environmental authorisations
Under the National Environment Management Act: ‘No person may prospect for or remove, mine, conduct technical co-operation operations, reconnaissance operations, explore for and produce any mineral or petroleum or commence with any work incidental thereto on any area without an environmental authorisation’
Any person who wishes to apply for a prospecting right must simultaneously apply for an environmental authorisation.
The prospector must lodge the environmental authorisation at the office of the Regional Manager in whose region the land is situated; and pay a non-refundable application fee.
Ultimately, the Minister of Mineral Resources and Energy is the authority that grants environmental authorisations related to prospecting or petroleum resources.
Under section 43 of the NEMA, people can appeal the environmental authorisations, which suspends the operation of the authorisation until the appeal is finalised.
Once the Minister grants the environmental authorisation, the Minister of Environment, Forestry and Fisheries becomes the appellate authority for the decisions relating to granting or refusal of the environmental authorisation. This often creates overlapping jurisdiction because the Minister of Environment, Forestry and Fisheries often goes beyond considering whether the environmental authorisation should have been granted or not and considers the desirability of mining itself.