What is the New Mineral Resources Development Bill of 2025?
The Mineral Resources Development Bill of 2025, released for public comment on May 20, 2025, represents a significant update to South Africa's mining legislation. This bill aims to replace portions of the existing Mineral and Petroleum Resources Development Act (MPRDA) with new provisions that the Department of Mineral and Petroleum Resources (DMPR) claims will create a stable legal framework to attract investment and foster economic growth.
According to Mineral and Petroleum Resources Minister Gwede Mantashe, "The DMPR is mindful that a stable legal framework is essential to attract and retain investments, foster inclusive economic growth and sustainable resource development, and the Bill seeks to align mining legislation with evolving policies, economic conditions and global shifts, while ensuring that it reflects current industry needs and government priorities."
Minister Mantashe published an erratum on June 9, 2025, modifying two controversial aspects of the original bill. The erratum removed the requirement for ministerial consent on changes of control in listed companies and eliminated the controversial empowerment clause relating to prospecting rights—showing some governmental flexibility to modify contentious provisions after industry feedback.
Despite these changes, industry stakeholders and legal experts continue to express serious concerns about the bill's potential impact on mining investment opportunities and operations in South Africa. The bill's provisions have sparked debate about whether they will achieve the stated goal of creating regulatory certainty or if they will instead introduce new sources of uncertainty in new mining bill.
Why Are Industry Stakeholders Concerned About the Mining Bill?
Continued Regulatory Uncertainty
Despite Minister Mantashe's claim that the bill would provide a stable legal framework, industry representatives argue it does the opposite. The Minerals Council South Africa stated on June 11, 2025, that "the Bill in its current form [still] does not encourage or sustain the growth and investment that the mining industry needs to realize its full potential to create employment, stimulate the economy and fulfill its social mandate."
Minerals Council CEO Mzila Mthenjane expressed frustration that prior consultations appeared to have little impact on the final draft, noting, "The draft Bill is not altogether optimal. We did have engagements with the [DMPR], but we cannot see where our inputs were taken into consideration."
Legal experts from Herbert Smith Freehills describe the bill as "impractical, vague and legally risky," suggesting it may trigger protracted litigation rather than regulatory clarity. Some analysts have even accused the Bill of allowing for "indirect expropriation of mining assets" through its various provisions.
Ministerial Consent Requirements
One of the most contentious issues in the original bill was the requirement for ministerial consent for any change of control in both listed and unlisted mining companies. This provision raised significant concerns because:
- It would potentially clash with stock exchange regulatory frameworks
- It could introduce delays and uncertainty for institutional investors
- It might constitute extraterritorial overreach for multinational companies
- It would add an additional layer of bureaucracy to already complex corporate transactions
While the June 9 erratum removed this requirement for listed companies, unlisted companies still face ministerial approval requirements for significant shareholding changes, maintaining a level of regulatory burden that could deter investment.
Mining executives have pointed out that similar approval requirements in other countries often lead to delays of many months or even years, creating uncertainty that makes it difficult to plan and execute corporate strategies. In competitive global capital markets, such delays can be the difference between securing investment and losing it to jurisdictions with more streamlined mining permitting process.
How Does the Bill Address Transformation in the Mining Sector?
Transformation Mandates and BEE Requirements
The bill initially included transformation requirements for prospecting rights, contradicting Minister Mantashe's public statements that exploration firms would be exempt from empowerment rules. The June 9 erratum removed this controversial provision, aligning with Mantashe's previous public assurances that "once you… get into production, we want you to have a BEE partner."
However, broader transformation mandates remain firmly in place:
- The bill aligns Black Economic Empowerment (BEE) definitions with the Broad-Based BEE Act
- The Minister may issue new BEE regulations
- Breaching the Codes of Good Practice and Living Standards would constitute a violation of the MPRDA, effectively elevating these policies to binding law
Minister Mantashe has taken an uncompromising stance on these provisions, stating unequivocally: "We are not going to remove provisions for BEE in the Act." He went further, admonishing the Minerals Council not to "make subtle threats," and telling the organization "to prepare for legal challenges" if it continued to oppose certain provisions.
"Once Empowered, Always Empowered" Uncertainty
Legal experts note ongoing uncertainty around the "once empowered, always empowered" principle. As Herbert Smith Freehills partner Patrick Leyden explained, "In 2021, the court struck… the provisions in the Mining Charter insofar as they imposed obligations on the holders of existing rights who had already met the targets… if you met your target, you were deemed to have complied for the duration of that right, including any subsequent renewals, regardless of whether your black shareholders ultimately sold out."
The new bill's language creates ambiguity about whether this principle will continue to apply, potentially requiring companies to maintain specific ownership structures indefinitely. This uncertainty has significant implications for investment planning and corporate structuring in the mining sector.
Legal Context: The "once empowered, always empowered" principle has been the subject of multiple court cases in South Africa, reflecting its importance to mining companies' long-term planning. The principle provides certainty that compliance with transformation requirements at the time of obtaining mining rights will be recognized for the duration of those rights.
What Are the Concerns About Forced Beneficiation?
New Beneficiation Requirements
The bill introduces a redefined concept of "beneficiation" as the transformation or value addition of minerals beyond a government-determined baseline. Key provisions include:
- Mandatory consideration of domestic beneficiation when reviewing right renewals
- Requirements for the Minister to promote local beneficiation
- Consultation with other Ministers on beneficiation matters
- Authority to set supply conditions supporting domestic beneficiation
These provisions signal a significant shift toward greater government involvement in determining how and where minerals are processed after extraction, potentially limiting mining companies' ability to make purely market-based decisions about mineral beneficiation in South Africa.
Section 26(2B) Controversy
A particularly controversial addition is Section 26(2B), which requires all mineral producers to make minerals available for local beneficiation. Critics note that the bill:
- Doesn't specify export limits
- Provides no clarity on required volumes or prices
- Grants wide ministerial authority without adequate checks and balances
Democratic Alliance Mineral and Petroleum Resources spokesperson James Lorimer warned that "forcing companies to supply material locally under ministerial directive – despite issues such as electricity instability and labour laws – would increase costs." He further argued that "local beneficiation was not currently viable, and that policy alone would not fix the problem."
International Trade Concerns
Legal experts warn that potential quantitative restrictions on exports could breach South Africa's commitments under:
- The 1994 General Agreement on Tariffs and Trade
- The 2016 EU–SADC Economic Partnership Agreement
Herbert Smith Freehills partner Peter Leon is "concerned that future quantitative restrictions on exports could breach South Africa's commitments" under the 1994 General Agreement on Tariffs and Trade, and the 2016 EU–SADC Economic Partnership Agreement.
Such restrictions could also force mining companies to breach existing supply contracts with international partners, potentially leading to legal disputes and undermining South Africa's reputation as a reliable trading partner.
How Does the Bill Handle Historical Mine Dumps?
New Regulatory Framework for Mine Dumps
The bill brings historical mine dumps under the MPRDA and potentially the Mineral and Petroleum Resources Royalty Act. This raises several concerns:
- Unclear application of Mining Charter requirements to these dumps
- Potential constitutional issues regarding property rights
- Requirements for tailings dam operators to apply for rights within two years or forfeit ownership to the State
This represents a significant change in how these assets are treated under the law, with potentially far-reaching implications for companies that have invested in tailings reprocessing technologies and infrastructure.
Constitutional Questions
Legal experts argue that if mineral custodianship of dumps outside existing mining areas reverts to the State, this could constitute an unconstitutional expropriation of private assets, raising serious legal questions.
Herbert Smith Freehills partner Patrick Leyden noted: "It's unclear whether the Minister would seek to impose any of the Mining Charter requirements on applications for new rights in relation to these dumps." Leyden also stated that the provision raises "serious constitutional questions."
Technical Note: Mine dumps often contain valuable minerals that were not economically extractable with earlier technologies. Advances in processing methods have made many dumps potentially valuable assets, which explains why ownership and regulatory control of these dumps has become a contentious issue.
What Are the Potential Impacts on Mining Investment?
Industry Reaction
The mining industry has responded strongly to the proposed legislation:
- Minerals Council CEO Mzila Mthenjane stated that the organization's inputs during prior consultations were not reflected in the bill
- Newly elected Minerals Council president Paul Dunne questioned whether the bill would improve the investment climate or create jobs, stating: "When we examine the Bill, we ask ourselves two questions: does it contribute to an improved investment climate and is it employment positive? Our considered answer is no, it does not, and [it] shall not go unchallenged."
- Sibanye-Stillwater spokesperson James Wellsted indicated the industry would "defend against it vigorously," adding: "We don't believe this Bill has been appropriately considered or reflects our inputs. As an industry, we will defend against it vigorously."
These responses reflect deep concern across the industry about the bill's potential impact on mining operations and investment.
Investment Concerns
Critics argue that the bill will deter foreign investment in South Africa's mining sector by:
- Creating additional regulatory hurdles
- Introducing uncertainty around ownership and control
- Imposing beneficiation requirements that may not be economically viable
- Potentially conflicting with international trade agreements
Many industry analysts point out that transformation requirements are already a hurdle for foreign investors, who often end up seeking more accommodating jurisdictions. The additional requirements in the new bill could further discourage investment at a time when South Africa's mining sector faces significant challenges, including unreliable electricity supply, infrastructure constraints, and increasing operational costs.
How Has the Government Responded to Criticism?
Ministerial Position
Minister Mantashe has taken a firm stance on the bill, particularly regarding transformation requirements:
- He stated unequivocally that "we are not going to remove provisions for BEE in the Act"
- He admonished the Minerals Council not to "make subtle threats"
- He told the organization "to prepare for legal challenges" if it continued to oppose certain provisions
This confrontational approach suggests limited appetite for major concessions on key aspects of the bill, despite industry concerns about uncertainty in new mining bill.
Limited Concessions
The June 9 erratum demonstrates some willingness to modify controversial aspects of the bill, but critics argue these changes are insufficient to address the fundamental concerns about regulatory uncertainty and investment deterrence.
The erratum specifically removed:
- The requirement for ministerial consent on changes of control in listed companies
- The controversial empowerment clause relating to prospecting rights
While these modifications address two specific concerns, they leave many other contentious provisions intact, including beneficiation requirements, historical mine dump regulations, and various aspects of the transformation mandates.
What Happens Next for the Mining Bill?
Public Comment and Legislative Process
The bill is currently in the public comment phase, allowing stakeholders to provide feedback before it advances through the legislative process. Key milestones ahead include:
- End of the public comment period
- Potential revisions based on stakeholder input
- Parliamentary consideration and debate
- Possible legal challenges if passed in its current form
Given the level of industry opposition, the legislative process could be lengthy and contentious, with multiple rounds of revisions and debate before the bill is finalized.
Industry Strategy
Mining industry representatives have indicated they will continue to advocate for changes to the bill to address their concerns about investment climate and job creation. Some observers suggest the government may ultimately implement a compromise version that retains some controversial elements while modifying others.
Democratic Alliance spokesperson James Lorimer offered a more cynical view: "We've seen this before with mining legislation. The ANC puts something completely unacceptable on the table. There's an outcry. People complain and suggest other ways and threaten court action. Then, what we get is 50% of that terrible Bill… and everybody says 'Oh well, it could have been worse.' And they accept it. But the problem is, it did get worse. There's still a 50% bad Bill and I suspect that is what's going to happen here."
This perspective suggests a potential strategy of proposing extreme provisions initially to make later compromises more acceptable to industry stakeholders—a negotiating tactic that, if accurate, raises questions about the government's approach to mining policy development.
FAQ About the New Mining Bill
How does the new bill differ from the existing MPRDA?
The new bill introduces significant changes in several areas, including transformation requirements, beneficiation mandates, and the treatment of historical mine dumps. It also grants broader ministerial powers in certain areas while attempting to align with other legislation such as the Broad-Based BEE Act.
Key differences include:
- More explicit beneficiation requirements with potential export restrictions
- New regulatory framework for historical mine dumps
- Enhanced ministerial powers regarding approval of ownership changes
- More detailed alignment with BEE legislation and Codes of Practice
Will the bill affect existing mining rights?
The bill creates uncertainty around existing rights, particularly regarding transformation requirements and the "once empowered, always empowered" principle. Companies with existing rights may face new compliance obligations, especially related to beneficiation and BEE ownership structures.
The ambiguity around how these provisions will be applied to existing rights is a significant source of concern for current mine operators, who made investment decisions based on the mining claims framework in place when they acquired their rights.
How might the bill impact South Africa's mining competitiveness?
Critics argue the bill could reduce South Africa's attractiveness as a mining investment destination by introducing additional regulatory burdens and uncertainties. This could potentially lead investors to prioritize mining jurisdictions with more stable and predictable regulatory frameworks.
Factors that could impact competitiveness include:
- Increased compliance costs related to transformation requirements
- Potential restrictions on mineral exports due to beneficiation mandates
- Uncertainty regarding ownership and control requirements
- Additional administrative burdens related to ministerial approvals
What alternatives has the industry proposed?
The Minerals Council and other industry stakeholders have advocated for a regulatory approach that provides greater certainty, reduces ministerial discretion, and balances transformation objectives with the need to attract investment and create jobs. They have suggested more collaborative approaches to developing mining legislation.
Specific proposals include:
- Maintaining the "once empowered, always empowered" principle
- Creating more market-based incentives for beneficiation rather than mandates
- Establishing clear, objective criteria for ministerial approvals
- Protecting existing rights from retrospective regulatory changes
Balancing Regulation and Investment: Finding a Path Forward
The Mineral Resources Development Bill of 2025 represents a significant attempt to update South Africa's mining legislation, but it has generated substantial controversy within the industry. While the government aims to promote transformation, beneficiation, and state control over mineral resources, mining companies and investors express concern about regulatory uncertainty and potential deterrence of investment.
The June 9 erratum addressed two specific concerns but left many others unresolved. As the bill moves through the legislative process, the key challenge will be finding a balance that advances South Africa's socioeconomic objectives while maintaining an attractive environment for mining investment.
South Africa's mining sector faces significant competition from other jurisdictions for investment capital. Creating a regulatory environment that provides certainty, limits administrative discretion, and establishes clear, objective criteria for compliance could help address industry concerns while still advancing transformation and beneficiation goals.
The outcome of this legislative process will have significant implications for the future of South Africa's mining industry, which remains a crucial contributor to the country's economy, employment, and export earnings. Finding common ground between government priorities and industry concerns will be essential to ensuring the sector's long-term sustainability and growth, including addressing the mine reclamation importance for environmental sustainability.
Industry Perspective: Mining executives often emphasize that policy certainty is as important as the specific content of regulations. Even challenging requirements can be accommodated if they are clear, consistent, and allow for long-term planning. The uncertainty created by vague provisions and broad ministerial discretion is often cited as more problematic than the actual compliance costs of well-defined regulations.
Ready to Stay Ahead of South Africa's Mining Regulation Changes?
Don't miss critical developments that could impact your mining investments. Discovery Alert's proprietary Discovery IQ model provides instant notifications on significant ASX mineral discoveries and regulatory shifts, ensuring you're always positioned ahead of the market. Explore how investors capitalise on major mineral discoveries by visiting the Discovery Alert discoveries page.
