Regulatory factors undermining the competitiveness of mineral prospecting activities: a case study of South Africa
Globalisation has resulted in many countries developing strategies to support their mineral sector’s growth. Most of these countries have developed policies, regulations, and other guidelines to ensure they derive maximum benefit from their mineral wealth and promote growth. As a country wealthy in Mineral Resources, South Africa has also developed a mineral policy to address past injustices and boost the mining industry’s competitiveness by attracting investment. Although the country has developed a mineral policy to attract investment, the South African share of African exploration budgets has been declining over the years. The goal of this study was first to map the trend of investment in South African prospecting activities and then identify regulatory factors hindering investment in prospecting activities. The trend of investment in exploration activities was established by analysing expenditures incurred by the sample companies between 2015 and 2019. The results showed that the spending fluctuated over the years but was high during 2015 and 2019. Factors hindering investment in prospecting activities were gathered from an analysis of court cases in combination with the survey questionnaire. Denial of access to the land by property owners, the expensive application process, longer timeframe of processing applications, and granting the same property to different applicants were identified as hindering factors. In particular, the hindering factors were linked to the administration of Section 5(4) (c), Section 9(1) (b), and Section 17(2) of Mineral and Petroleum Resources Development Act 28 of 2002. This study further discovered that the government had identified similar issues established in this study and developed an exploration implementation plan that is aimed at resolving the problems, with a goal of boosting investors’ confidence. The government’s developed plan is considered adequate. Hence, it is recommended that its implementation be fast-tracked and well monitored. Furthermore, government should provide resources to ensure successful implementation of the plan. Lastly, the established trend of investment was based on an analysis of publicly listed companies. Therefore, medium and small companies can be included in future in-depth studies to gain more insight.
A research report submitted in partial fulfilment of the requirements for the degree of Master of Science in Engineering to the Faculty of Engineering and Built Environment, School of Mining Engineering, University of Witwatersrand, Johannesburg, 2022