Amendments to the 2002 Mineral and Petroleum Resources Development Act will secure the state a free 20% stake in all new energy ventures and also entitle the state to potentially take over new oil and gas ventures in their entirety.
The state will also effectively be able expropriate an additional unspecified amount at a so called “agreed price.”
This replaces the 30% ceiling on an additional share acquisition and “fair market value” clauses that were subsequently removed.
The Bill also proposes increasing the discretionary influence of the Minister of Mineral Resources, Susan Shabangu, thus increasing the risks of cronyism and creating great uncertainty within the sector.
The initial incarnation of the Bill was subject to heavy criticism.
The proposed changes will frighten off future investment in the industry, slowing down growth and removing any prospects of job creation within the sector, according to opposition parties in Parliament.
“We are on the path of changing the mining and petroleum industry in South Africa, whether you like it or not,” Mineral Resources Minister Susan Shabangu told lawmakers. “Change is painful, change is bitter, especially when you are stuck in the past. This act is about the people of South Africa.”