Codes of good practice released by South Africa’s Department of Minerals and Energy will negatively impact the junior and black economic empowerment (BEE) sectors of the industry, a leading association has warned.
The South African Mining Development Association (SAMDA) said that it finds areas of the new codes alarming.
SAMDA said it is concerned that the absence of an offset provision will hamper the ability of junior and BEE companies to enter or remain in the market, as they have to meet all the requirements of the codes to gain future mining rights.
The stipulation that BEE companies need to be debt-free within just two years of any acquisition to receive ownership will also negatively impact the junior minors and future funding, the association said.
In addition, it argues against the housing and living codes that it said will burden the junior minors as medical care has to be extended to the dependents of mine workers.
SAMDA has also raised concerns about guidelines stating that junior minors have to assist and facilitate the acquisition of land for housing by employees.
It has requested the government to withdraw the codes to allow for more consultations before the main mining charter review later this year.