A new Bureau for Economic Research report looked at urgent areas of reform that the Mineral and Petroleum Resources Development Act (MPRDA) needed to improve the mining sector.
Image: File Henk Kruger | Independent Newspapers
South Africa's mining industry is failing to capitalise on one of the world's largest mineral endowments because of regulatory delays, policy uncertainty and administrative inefficiencies rather than a lack of mineral resources, according to a new Bureau for Economic Research (BER) report.
The report comes as government finalises the revised Mineral Resources Development Bill, legislation widely expected to reshape the country's mining regulatory framework after the withdrawal of the initial draft in 2025 following strong industry opposition.
Prepared by independent consultant Robert Botha, the report argues that South Africa's mineral wealth—estimated at between $2.5 trillion (R41 trillion) and $4.7trln (R77trln)—continues to operate well below its potential because of structural weaknesses in the implementation of the Mineral and Petroleum Resources Development Act (MPRDA).
“The long-term stagnation of the industry is a function of regulatory friction, policy uncertainty, and administrative backlogs rather than geological exhaustion,” Botha said.
The report said that by evaluating the operational mechanisms of the MPRDA 28 of 2002 (as amended) alongside direct intelligence from industry stakeholders, this note outlines potential statutory amendments required to unlock dormant capital, catalyse early-stage greenfield exploration, reduce administrative bottlenecks, and improve investor confidence.
The report added that the legislative architecture governing South Africa's mineral complex is at a critical juncture, and policy uncertainty has increased.
“The initial draft Mineral Resources Development Bill 2025, published on 13 August 2025, was officially withdrawn by state authorities following intense and widespread objections from industry stakeholders,” said the report.
“While the withdrawal was a necessary step aligned with prior research recommendations, it has left a policy vacuum characterised by intense speculation and conflicting communications regarding the contents of the forthcoming revised draft.”
The report said that this uncertainty has been compounded by overlapping institutional frameworks.
“On 8 June 2026, the Department of Trade, Industry and Competition (dtic) published the Industrial Development Strategy 2026, which seeks to alter the mining incentive structure around exploration, extraction, processing, and investment.”
The report added that the strategy explicitly advocates for a review of mining legislation to enable the government to attach strict conditions to the allocation of mineral rights to force the beneficiation of minerals at source.
The report said that concurrently, the regulatory landscape faces persistent structural delays.
“At the Junior Mining Indaba in Johannesburg on 9 June 2026, the Department of Mineral and Petroleum Resources (DMPR) announced that the full rollout of the national online cadastral system has been postponed for a fifth time, pushing the target date out to 31 March 2027.”
The report added that the administrative friction within the DMPR operates as an indirect cost on mining investment.
“Following the structural transition to state custodianship under the MPRDA and the failure of successive internal administrative systems like SAMRAD, which were plagued by information externalities, a lack of transparency, and overlapping application errors, the state accumulated a substantial administrative backlog.”
The report said that the financial toll of this administrative paralysis is vast.
"A targeted industry survey conducted by the Minerals Council South Africa in 2021 covering just 21 operating companies revealed that 178 outstanding license applications had stalled over R30 billion in active, planned capital expenditure.”
The report added that the primary driver of this systemic delay is the absence of mandatory performance standards governing the state apparatus within the text of the MPRDA.
“While the Act routinely imposes strict, non-negotiable compliance windows on private sector applicants, it systematically omits binding timeframes for the state's internal evaluation and approval mechanisms.”
The report said that as policymakers finalise the revised Mineral Resources Development Bill, there is a critical window of opportunity to reverse this trajectory.
“By embedding strict statutory timelines across all licensing processes, codifying judicial precedents to protect capital mobility, and curtailing unilateral ministerial powers, the state can restore the policy certainty required to attract long-term, global capital.”
The report added that coupling these legislative amendments with robust institutional anti-corruption measures will be essential for rebuilding a healthy, transparent project pipeline.
“Ultimately, resolving these binding constraints is not merely an administrative cleanup; it is a macroeconomic imperative that can firmly reposition South African mining as a sunrise industry.”
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