And Mineral Resources Minister Susan Shabangu says she is sticking to the decision to award Imperial Crown Trading prospecting rights over 21.4% of Kumba Iron Ore’s Sishen mine
Inet Bridge and Reuters
Published: 2010/08/17 03:06:35 PM
South Africa has put a six-month moratorium on all new applications for prospecting licences in the country while a review of irregularities in the administrative process is ongoing, a minister said on Tuesday.
Mineral Resources Minister Susan Shabangu said all already launched mining right applications would be processed according to existing law.
Shabangu also said it would propose an amendment to the mining act to address the irregularities, with a proposal to be discussed by cabinet by the end of this year.
Shabangu earlier said she would immediately review the country's mining and minerals legislation.
This follows reports of growing investor concern over the country's mining regime following events that saw prospecting rights and rights over certain minerals awarded to third parties.
"I have noted with increasing concern the growing negative sentiment regarding South Africa's mining sector, specifically in relation to our regulatory framework," said Shabangu.
At the same time Shabangu the Department of Mineral Resources was sticking with its decision to award Imperial Crown Trading (ICT) prospecting rights over 21.4% of Kumba Iron Ore's Sishen mine.
Kumba, which also applied for the same rights, had appealed the government's awarding of the prospecting right to ICT.
"The appeal has not been granted. Kumba has lost that right," Shabangu said. ICT was controversially awarded the prospecting license over Kumba, which also applied for the rights. The rights over the stake reverted to the state after ArcelorMittal South Africa (AMSA, ACL), the previous holder of the rights, failed to renew its mining rights.
AMSA's failure to covert its rights was used by Kumba as a reason to cancel a nine-year agreement that saw AMSA receive discounted iron ore from the mine.
According to the DMR, Kumba applied for the conversion of its rights over Sishen in December 2005 and by the end of April 2009, AMSA had not submitted its application.
End of April 2009 was the deadline for all mining companies to apply for the conversion of their rights under the mining law. When the rights reverted to the state it became available to everyone, said Shabangu.