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OPINION | Junior Mining Indaba begins amid major illegal mining and social concerns. What now?

Athi Jara explains the current legislation.

The Junior Mining Indaba begins in early June, with junior miners navigating a minefield of concerns about illegal mining and social impact. Athi Jara explains the legislation.


The Junior Mining Indaba will take place on 1 and 2 June 2022 at the Johannesburg Country Club. This year’s discussions will focus on the global economic and geopolitical environment and the impact on junior mining, as well as the regulatory environment.

This conference follows the Investing in African Mining Indaba 2022, which took place at the Cape Town International Convention Center in May. At the African Mining Indaba, Minister of Mineral Resources and Energy Gwede Mantashe referred to a renewed focus on sustainability by the investment community and the developed world, which drives the development of ESG assets – estimated at more than $ 50 trillion by 2025 and represents more than a third of the projected $ 140.5 trillion in global assets under management.

Environmental regulations

Junior miners should be aware of the current applicable legal framework. In particular, the National Environmental Management Act, 1998, which authorizes the Minister of Forestry, Fisheries and the Environment to publish cunning activities that may not start without an environmental permit.

In accordance with these authorization provisions, the Minister published the Environmental Impact Assessment Scheme and three Listing Notifications. This EIA scheme lists prospecting and mining projects as activities that may not start without an environmental permit.

Certain specialist studies must be done as part of the application process for an environmental permit. In a recent judgment of Earthlife Africa Johannesburg v Minister of the Environment and othersthe Supreme Court ruled that the specialist studies undertaken could include assessments of the impact of climate change in accordance with South Africa’s obligations under international treaties such as the Paris Agreement and the Kyoto Protocol.

The President also signed the Carbon Tax Act 15 of 2019 into the law of 22 May 2019, which legislation imposes a carbon tax on greenhouse gas emitters, which may cover certain mining operations.

Finally, junior miners should be aware of the provisions of the National Water Act, 1998, which require a water use license for undertaking water use for mining activities that affect water resources.

Impact on communities

ESG also requires mining companies to be made aware of the importance of the “social license to operate” that mining projects require to ensure that their activities are not undertaken to the detriment of the existence of surrounding mining communities.

Mining communities are often most affected by mining activities. It is these communities that are most affected by noise, vibration and explosion activities arising from mining projects. These communities are also most affected by any environmental pollution or degradation that occurs at mines.

The investment community recognizes that it is imperative that these communities be included in all discussions regarding the development of the mining sector.

However, a lacuna (or gap) still exists in the legal framework regarding which communities should be consulted by mining companies.

Mining communities can group themselves into a number of formal structures, which include: the registration of municipal trusts, joint ventures or associations for municipal ownership (or CPAs).

There may also be traditional authorities, traditional leaders or traditional councils that have jurisdiction over a particular mining community. Finally, there may be divisions or factions within the community itself – with one part of the community supporting a mining project and another part of the community opposing the mining project.

This often raises the question: to what extent should a mining company consult with a community and especially with whom?

This issue of community consultation should be considered in the light of the evolving case law on municipal consultation, with the courts in the Baleni and others against Minister of Mineral Resources and others en Maledu and others v Itereleng Bakgatla Mineral Resources (Pty) Ltd and another cases which decide that in addition to consultation, the consent of the community must be obtained by applicants for coin titles where the community has informal fundamental rights under the Interim Protection of Informal Land Rights Act, 1996.

A difficulty then arises as to whose permits must be obtained for purposes of complying with this requirement, in view of the diverse character of mining communities.

The impact of illegal mining

It remains to be seen how junior mining companies will be affected by the recently published Artisanal and Small Scale Mining Policy 2022, which aims to address the critical challenge of illegal mining in the South African mining and minerals industry.

This policy proposes amendments to the Mineral and Petroleum Resources Development Act, 2002, with new mining titles targeting small-scale miners and artisanal miners.

This could be an opportunity for some junior mining companies to obtain mining titles without being subjected to the current cumbersome (and costly) licensing process.

The power of the policy lies in its implementation to achieve the intended objectives.

Athi Jara, Mining and Environmental Law Practice Director by Werksmans Attorneys. Views are the author’s own.

OPINION | Junior Mining Indaba begins amid major illegal mining and social concerns. What now?

Source link OPINION | Junior Mining Indaba begins amid major illegal mining and social concerns. What now?

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