Despite an insatiable worldwide appetite for minerals, and despite the treasure trove of mineral resources in its soil, mining in South Africa has been on a long-term decline. Reversing this is a national economic priority, which will demand a new legislative framework.

This is the view of the Institute of Race Relations (IRR), South Africa’s oldest think tank, which today launched its Growth and Employment in Mining (GEM) Bill in a webinar. This is an alternative piece of legislation designed by IRR head of policy Dr Anthea Jeffery, which proposes a radical restructuring of mining law.

The IRR notes that the contribution of mining to GDP has declined from 21% in 1980 to some 7% today. It has shed about 55 000 jobs in the past two decades, and over the same period, exploration spending in the country has plummeted from R6.3 billion in 2006 to R738 million in 2025.

Dr Jeffery said that much of this can be attributed to the impact of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, which imposed onerous, uneconomic demands on mining firms, and subjected their operations to extensive discretion by the minister and a bureaucracy that often lacked understanding of the industry and was even hostile towards it.

For example, the vesting of mineral rights in the state (“custodianship”) has delivered a negative message about property rights and the security of investments.

Similarly, requirements for mining firms to cede a quarter of their equity to “empowerment” partners as a condition of licenses, along with uncertainty over whether the demands would remain the same over time, have placed an extensive burden on them, and been a disincentive to mining in South Africa.

Speaking at the webinar, IRR projects and publications manager Terence Corrigan said that the GEM Bill was meant to be a concrete proposal for an improved environment. It was intended to move the debate beyond criticism of what was not working to show what would work.

To this end, a letter has been sent to President Cyril Ramaphosa outlining the main features of the proposal.

Dr Jeffery explained that the GEM Bill would introduce a system in which race and political connections would be irrelevant to obtaining mining licenses. These would be issued on the basis of suitable technical capacity and financial resources to develop and operate a mine; to comply with safety, health, and environmental obligations; and to rehabilitate affected areas prior to closure.

“These clear criteria allow objective evaluation, limit bureaucratic discretion, and reduce the scope for corruption and other abuses,” she said.

Property rights would be protected. In the event of expropriation, fair market compensation would be paid.

The GEM Bill would also reorient mining’s socio-economic contribution from one based on racial empowerment policy to the IRR’s system of economic empowerment for the disadvantaged (EED). This would focus on rewarding firms for the contributions they are making to the economy as a whole and on incentivising firms to assist poor people.

Dr Jeffery identified three key features of this that would make it superior to the existing system. “First, EED identifies disadvantage by income rather than race. This complies with the Constitution’s founding value of non-racialism and bars the further enrichment of a small black elite. Second, it introduces a new EED scorecard that allows mining companies to earn voluntary EED points for their vital contributions to investment, growth, employment, export earnings, tax revenues, mine health and safety, and environmental stewardship.”

Dr Jeffery added that South Africa had fallen behind comparator countries in its attractiveness as a jurisdiction for mining, referring specifically to neighbouring Botswana.

She cautioned that the risk of failing to take action to reset the legislative environment was not necessarily more of the same, but possibly greater and more destructive demands, and a further shrinkage of the industry.

However, change in mining would send a powerful signal that South Africa was serious about pragmatic reforms, and “open for business”.