Blog: Mining industry not expected to oppose third draft of Financial Provisioning Regulations – Webber Wentzel – Creamer Media’s Mining Weekly

The April 22 publication of an intention by the Department of Forestry, Fisheries and the Environment (DFFE) to again amend the transitional arrangements contained in the National Environmental Management Act (Nema) Financial Provisioning Regulations provides “more breathing room” for mining right holders to comply, says law firm Webber Wentzel.

Webber Wentzel partner Garyn Rapson and trainee attorney Lerato Molefi, note in a statement that the regulations were first published on November 20, 2015, and created a provision applicable to holders of prospecting or mining rights who applied for such rights before November 20, 2015, regardless of when the right was obtained.

The firm states that the DFFE has indicated that a third draft of the replacement regulations is being prepared, which Webber Wentzel expects will again be issued for public comment before the final replacement regulations are gazetted.

They say the effect of this provision was that the holder of such rights must currently comply with the regulations no later than June 19 this year.

Until finally transitioned, the legal experts note that such mining right holders are regarded as having complied with the provisions of the regulations if the holder continues to comply with the old Mineral and Petroleum Resources Development Act system of calculating and annually assessing its financial provisioning for rehabilitation and closure.

“The proposed amendment (the third such one) seeks to further extend the transition date for compliance to June 19, 2022.”

The legal experts explain that this further delay in terms of the transition to the regulations was inevitable because they are to be repealed and replaced by a new set of financial provisioning regulations.

In addition, the delay was expected owing to the first draft set of replacement regulations being published on November 10, 2017 under regulation GN R1228; while the second draft of the replacement regulations was published on May 17, 2019 under regulation GN R667.

The replacement financial provisioning regulations cannot be made final until National Environmental Management Laws Amendment Bill IV (NEMLAA 4) has been gazetted into law.

Webber Wentzel points out that NEMLAA 4 plays a crucial part in this puzzle as it proposes a range of changes to the Nema, which must be made final before the final set of replacement regulations can be published.

Members of the public are invited to submit comments on the proposed amendment of the regulations’ transition date by May 22.

“We suspect that the mining industry will not be jumping to oppose the amendment, as the further extension of the deadline will be a welcome relief for many,” the law firm states.

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