MINING INDABA
facing increasing pressure by their citizens to participate and
benefit from natural resources.
The starting point is always for there to be policy certainty,
because policies provide the framework for regulatory certainty.
For African governments to increase investment, not only
directly in relation to the natural resources sector, but also for
example, infrastructure development, policies which are clear, are
necessary. Sometimes, for example, it is not necessarily about the
percentage of indigenisation, but rather, that there is certainty
around indigenisation requirements with the expectation that
those requirements will remain stable for a particular period.
Transparency is critical – all processes, including applications
for prospecting or mining rights and how those rights can be
impacted upon, must be readily available and accessible to
stakeholders.
Just as important however, is the need for fair administrative
processes, where rights may be impacted upon or where the
exercise of administrative discretion, can impact on or disrupt
operations.
Lastly, the rule of law remains a critical factor, together with
accessibility to a court system which is independent, unbiased,
and which can determine disputes quickly.
A government which is willing to listen to all stakeholders and
respond appropriately, is more likely to attract investment. The
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African Mining January 2020
recently published new mining code in Mali is a good example.
Initially, stabilisation arrangements were not specifically
addressed, but shortly after publication, it was confirmed that
the stabilisation period would be limited to 10 years. There will,
of course, be extensive debate on whether a 10-year stabilisation
period (down from the previous 30-year period), is appropriate –
not all stakeholders will be happy with the 10-year period.
While there are significant challenges being faced by the
Zimbabwean government, the announcement of the intention
to repeal the Indigenisation and Economic Empowerment act,
in March 2019, and the changes to the indigenisation laws, is
another example of an African government grappling with those
challenges, which could present road blocks to investment.
The Indigenisation and Economic Empowerment Act was
implemented by former Zimbabwe President, Robert Mugabe
in 2008. It required that 51% of mines had to be black
Zimbabwean owned, which limited foreign ownership. The act
was subsequently amended to limit requirements to platinum
and diamond mining companies.
The initial amendments, which limited the indigenisation
requirements to diamond and platinum mining companies only,
and the subsequent announcements that the act will be repealed
and replaced, were driven by concerns that the requirements were
impacting on growth and development. The announcements by
President Mnangagwa that Zimbabwe was open for business had
to be supported by the implementation of meaningful change
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