Clumsy Law Making Could Hinder Capital

In the mining industry, where huge capital is required to develop projects and construct mines, the ability of the listed company to raise funds on the stock exchange is crucial. However the Mineral and Petroleum Resources Development Amendment Bill, 2012, published in December, could severely hamper South Africa's capital raising capability.

This is according to Otsile Matlou, Director and Head of Mining at ENS (Edward Nathan Sonnenbergs), who says the concern is with regards to amendments to Section 11 of the Mineral and Petroleum Resources Development Act of 2002 (MPRDA).

"If this amendment ever became law, then South Africa's ability to raise much needed funds for mine development and production from the capital market would essentially cease to exist. This would put an industry, already suffering from the effects of a devastating industrial action and a weak global economy, into greater difficulty," he says.