Lawyers warn MPRDA bill's 'change of control' clause could paralyse mining deals

Mining lawyers reviewing South Africa's draft Mineral Resources Development Amendment Bill, approved by Cabinet for public comment in May 2025, warned that a provision requiring ministerial consent for any “change of control” of a mining right holder was drafted so broadly it could be read to cover routine share trading in listed mining companies, not just deliberate ownership transfers.

Peter Leon of Herbert Smith Freehills Kramer summed up the industry's reaction bluntly: “It's mostly stick, very little carrot.” Bowmans lawyers Charles Young and Wandisile Mandlana flagged that Section 11 of the bill left unclear whether the consent requirement applied only to direct shareholding changes or extended to indirect changes further up a corporate structure — a distinction that matters enormously for JSE-listed miners whose shares change hands constantly. Bowmans noted that the equivalent uncertainty already applied to indirect changes of control involving black economic empowerment partners, meaning a routine corporate restructuring at a JSE-listed miner could inadvertently trigger a ministerial review process never intended to apply to it.

Empowerment still unresolved

While the bill dropped a proposal to impose new empowerment requirements on prospecting rights, existing mining rights would still require empowerment compliance, and the minister would gain discretion to revise or withdraw existing black economic empowerment arrangements. President Cyril Ramaphosa had separately endorsed “equity equivalence” programmes — alternatives to direct ownership transfer, such as procurement or enterprise-development commitments — as one way to satisfy empowerment obligations, but the bill gave no detail on how such programmes would be assessed or approved.

Why it matters

Political analyst Theo Venter argued the drafting showed officials “can't read the room” on investor sentiment, warning that uncertainty over ownership approval was already deterring prospecting activity. Minerals Council chief executive Mzila Mthenjane said the ambiguity added yet another layer of risk on top of the MPRDA amendment process's other contested provisions.

What happens next

With the public comment period on the bill having closed on 13 August 2025, the drafting concerns raised by lawyers were expected to feature prominently in submissions urging Parliament to narrow the change-of-control definition before any final bill is passed, rather than leave the courts to resolve the ambiguity later, as happened with the 2018 Mining Charter.

Sources

• Miningmx: Tinkering with reform puts SA mining in limbo again, 17 Dec 2025

Photo: The Union Buildings in Pretoria, seat of the South African government. Ruby D-Brown, Wikimedia Commons, CC BY 4.0.