South Africa’s evolving mineral and petroleum industries

South Africa’s mineral and petroleum industries faced significant changes in 2024 in view of the establishment of the Government of National Unity and legislative developments in these industries. 

In May 2024, South Africa had its seventh general election the results of which paved the way for South Africa’s second Government of National Unity since democracy in 1994. President Cyril Ramaphosa in his cabinet announcement stated that the Electricity and Energy portfolios would be merged, and that Mineral and Petroleum Resources would be established as a separate ministry. The administration, powers and functions previously entrusted to the Minerals Minister were transferred, with the Minerals Minister administering mineral and petroleum resources, diamond, precious stones and geoscience related legislation, and the Electricity Minister administering electricity, energy, nuclear, and gas related legislation. In a statement released by the Presidency, it was confirmed that the Department of Mineral Resources and Energy will continue to exist until the legislation and relevant human and financial resources are transferred.  The DMRE will be replaced by two departments, the Department of Mineral and Petroleum Resources and the Department of Electricity and Energy. Stakeholders and analysts welcomed the creation of these ministries with the view that focussed attention will be given to tackling South Africa’s energy challenges and delivering a national energy transition, however, these changes are still subject to implementation. 

The establishment of the GNU was supported by the minerals industry. The Minerals Council South Africa embraced the separation of the minerals and energy portfolios highlighting the opportunity it presented for the creation of a legislative environment which would grow the mining industry by encouraging investments in exploration, new mine development and existing operations. The effect of the GNU encouraged and unified the industry’s call for co-operative governance and transparency. In a statement dated 2 July 2024, the Minerals Council stated that, “…A priority for the mining industry in the seventh administration is the need to harmonise the regulatory requirements in various departments to expedite processing of rights to explore, build a mine or expand an existing operation…Of equal importance is the implementation of the mining cadastre, a digital platform to transparently and efficiently manage mineral right applications and licences.”. The leading African mining conference, Mining Indaba 2025, takes place next week in Cape Town and presents an opportunity to take stock of South Africa’s mining industry and its objective to promote economic growth and mineral resource development in South Africa. 

However, uncertainties and challenges in 2024 continue to pose risks in 2025 from a policy and legislative perspective. There remains anticipation regarding possible amendments to the Mineral and Petroleum Resources Development Act, 2002 flowing from the Minerals Minister’s Review Summit in July 2023 which focused on the determination of South Africa’s future mining legislative framework. Fortuitously, the centrality of mining in the South African narrative and increased public participation in legislative processes as a function of democracy has seen proposed laws including those which affect mining put to the test of withstanding constitutional muster, failing which judicial challenges often follow. 

In regard to petroleum, in October 2024, President Ramaphosa assented to the Upstream Petroleum Resources Development Act, 2024. The UPRDA introduces the concept of a “petroleum right” which is intended to combine the functions of exploration rights and production rights as currently provided for in the MPRDA, and licensing rounds for petroleum rights which would be triggered by Ministerial invitation. In summary, the UPRDA regulates South Africa’s petroleum resources with the effect that sections in the MPRDA which currently provide for upstream petroleum will be repealed and replaced. The UPRDA is not yet in force and only comes into operation on a date fixed by the President in by proclamation in the Gazette. In view of the importance of security of tenure and continuity of tenure, transitional provisions have been provided for in the UPRDA which should be considered with reference to the transitional provisions in the MPRDA, when the mining legislative framework transitioned from the Minerals Act, 1991 to the MPRDA. 

Looking forward, the conglomeration of governments, investors, local and international mining and petroleum companies at Mining Indaba 2025 should facilitate productive exchanges of insights on policies, strategies and technologies which will shape the future of minerals and petroleum in South Africa and beyond.  In closing, reference is made to an extract of Minerals Council CEO Mzila Mthenjane’s statement following the establishment of the GNU, “If South Africa is to fully realise the growth opportunities of its minerals potential and enter the race for critical minerals, it needs a modern, efficient and conducive operating and regulatory environment to position itself as a mining investment destination of choice. The prize is a competitive and growing mining industry that benefits the whole of South Africa’s society.”.