Minerals Council fears MPRDA rewrite will unwind 'once empowered' ruling

The Minerals Council South Africa has warned that officials in the Department of Mineral and Petroleum Resources (DMPR) remain unhappy with a 2021 High Court ruling that protects mining companies from having to top up black economic empowerment shareholding every time they renew or transfer a right, and may try to reverse the principle through pending amendments to the Minerals and Petroleum Resources Development Act (MPRDA).

Council chief executive Mzila Mthenjane said officials were “really sore about the once empowered, always empowered” doctrine and might “want to weave in the Mining Charter” to address it through the amendment process, rather than through fresh charter litigation.

What the 2021 ruling protects

The High Court found in 2021 that companies which had already met Mining Charter empowerment thresholds did not need to find new black shareholders every time they applied to renew a right, so long as the original empowerment deal remained in place. The ruling gave the industry a measure of certainty after years of dispute over the 2018 Mining Charter, and the Minerals Council successfully defended it at the time.

Reopening that question through the MPRDA rather than the charter would let government avoid a repeat of the charter's legal history, but the Council argues it would achieve the same practical effect: forcing companies to renegotiate ownership deals at each renewal.

Why it matters

South Africa's exploration spending has fallen sharply, from R6.1 billion in 2006 to about R1.2 billion in 2023 on the Council's figures, and investors already cite regulatory uncertainty as a deterrent. Reopening a settled empowerment question, even indirectly, risks adding to that uncertainty just as the department is trying to use a new critical minerals strategy to attract capital.

Mthenjane said discussions with the department remained “positive and constructive” despite the disagreement, and that the Council did not yet have sight of the exact wording officials were considering.

What happens next

The Council's comments came ahead of the formal gazetting of draft MPRDA amendments later in 2025, which would give the industry its first real opportunity to see whether the ownership provisions matched its fears. Any attempt to unwind the once-empowered principle would be expected to draw the same kind of legal challenge that produced the 2021 ruling in the first place.

Sources

• Miningmx: Minerals Council harbours concerns about MPRDA review, 03 Feb 2025

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