HomeIndustry SectorsFinance and PolicyDMR starts audit of all mining rights holders

DMR starts audit of all mining rights holders

Palabora open
pit, one of the mines
being audited by
Pretoria, South Africa — ESI-AFRICA.COM — 15 February 2011 – The Department of Mineral Resources (DMR) has started auditing all mining rights holders in order to establish if they are still honouring the conditions attached to their mining rights, according to departmental spokesman Bheki Khumalo.

Business Report reports that this development comes on the back of a dispute involving Vunene Mining, which has mining rights for Usuthu colliery that used to be owned by Eskom. According to Khumalo, the black economic empowerment firm said it would supply coal from Usuthu to Eskom, but this did not happen and instead it ended up exporting it.

Khumalo was unable to say how many rights holders were being investigated, neither could he say how far back the probe was going.

“This does not apply to Usuthu only. That is why the minister announced that we would audit everybody because we wanted to establish if people were honouring the conditions attached to their mining rights,” he said. “We should be finished by March because that is when the moratorium will also be lifted.”

The department has placed a moratorium on accepting new applications for mining rights because it wants to clear backlogs for old applications. Khumalo said that once it had established that a rights holder was not complying with conditions attached to the rights, it would begin the process of taking the rights back, using Section 47 of the Mineral and Petroleum Resources Development Act.

Section 47 of the act gives the minister the power to suspend or cancel a company’s prospecting or mining rights in the event of a contravention of the legislation.