Risk Management
the mining company applying for a mining right. This might seem
manageable on paper but can be daunting to put into practice. For
example, when the new law was passed, one mining company found
itself needing to obtain the go-ahead to mine from over 200 000
individual land owners. Such consent was only required under the
old law at the point the mining company planned to enter onto the
landowner’s land (i.e., post-issuance of the original mining right). This
could potentially undercut the viability of the project, considering the
resources needed to undertake such wide-scale consultation.
are required to consult extensively with ministers, local authorities
and communities. Such consultation can be challenging at the
best of times but is more challenging in the current climate of
tensions between the authorities and certain international mining
companies, some of which are in standoffs with government over
matters such as alleged violation of environmental regulations and
tax disputes.
Compounding the challenges of consulting communities is that
once a decision on a mining right has been reached, it no longer
means that such right is secure. An example is the power given
to the Tanzanian parliament to direct that existing agreements
with international investors be reviewed and renegotiated if the
terms are considered ‘unconscionable’ (such as when an agreement
requires Tanzanian parties to submit to foreign laws and foreign
dispute resolution forums).
Tanzania’s current stance on such matters could be seen as a
resurgence of nationalism, which can also be considered to be
a form of populism.
Pres. Uhuru Kenyatta of Kenya. Populism has resulted in the mobilisation
of communities against mining companies.
The new law also requires large-scale mining projects to enter into
community development agreements as a condition for issuance of
a mining licence.
Meanwhile, in South Africa, where the debate over land
ownership has escalated dramatically in the past few years,
there are indications that populism is on the rise in a
number of spheres. We have seen this in certain recent court
decisions, which are in turn challenging established economic
and legal orthodoxies.
On the populist bandwagon
An added complication regarding community consultation in
Kenya is the vastness of the country. Substantial portions of land
are tribal land and potential areas for mining might easily cross
through land belonging to more than one tribe.
Protecting local interest in Tanzania.
The situation is slightly different – but perhaps even more
challenging – in neighbouring Tanzania, which has recently passed
various new laws designed to ensure that the country and its
citizens benefit from Tanzania’s mineral wealth through, among
other things, local content requirements.
When wishing to mine on land owned or occupied by holders of
other rights in respect of that land, mining companies in Tanzania
South African Minister of Mineral Resources Gwede Mantashe has been
placed under pressure by community demands.
Rhetoric by Tanzanian president John Magufuli has resulted in a strained
relationship between government and international mining companies.
32 AFRICAN MINING JULY - AUGUST 2019
A court judgment that has undoubtedly evoked concern among
international mining investors in South Africa is the Xolobeni
ruling of November 2018. Here, the High Court in Pretoria ruled
that the minister for mineral resources had no lawful authority
to grant a mining right to an Australian company to mine on
communal land without the ‘full and informed’ consent from the
community concerned, the Umgungundlovu community in South
Africa’s Wild Coast area.
www.africanmining.co.za