South Africa’s minister of minerals and energy has asked companies to apply for new mineral rights by the second quarter of next year, and plans to finalise a law to oversee the processing of minerals locally this year.
The deadline for companies and others to renew or assert their rights under the review of the sector is April 30 2009, Minister Buyelwa Sonjica told a mining conference in Cape Town on Tuesday.
”Under this law, South Africa’s government has taken over as custodian of mineral rights, and all companies must reapply for mining and prospecting licences,” Sonjica said.
”I would urge all stakeholders not to wait until the last minute to submit,” she added.
Mining accounts for 16% of the country’s gross domestic product and is one of the cornerstones of the economy, and moves by the government to regulate or change the industry often prompt unease in the sector and among investors.
South Africa’s mining charter, implemented in 2004, transfers all mining rights to the government and demands that mining firms meet a list of conditions before they can secure new mining licences.
Sonjica said a law to formalise the processing of minerals could be completed by the end of 2008.
The government hopes to boost local processing, or ”beneficiation”, of South Africa’s raw materials, metals and minerals in the country, rather than forfeiting employment and extra revenue to the countries where they are currently processed.
Sonjica also urged miners to be energy efficient and innovative in face of an electricity crisis that has gripped South Africa. The nation has faced weeks of rolling power cuts that have left millions of homes and businesses in darkness.
The power crunch prompted a temporary shutdown of major mines. Most major mining firms are still facing partial rationing of electricity, which has triggered fears of production losses and a slowdown in economic growth.
The power shortage last week shut down almost all of South Africa’s mining industry, inflicting losses estimated by some analysts to be in excess of R200-million a day.
Power has now been restored to the mines — but only at levels of 90% of their normal requirements.
The crisis has left company executives and shareholders anxious over potential losses in output and profits, and helped send precious metal prices to record levels on supply worries.
Platinum spiked to another record high above $1 800 an ounce on Tuesday. Production in platinum mines in South African, which supplies about two-thirds of the white metal, have been affected by the electricity supply crisis. — Reuters