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KING: REVIEW MINING LEGISLATION

04/02/2017 08:37:00 BY SIFISO SIBANDZE

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MBABANE – His Majesty King Mswati III has given a directive to the Ministry of Natural Resources and Energy to review the mining legislation so that it creates an environment that is competitive and attracts new investment.

He said: “In our pursuit of earning foreign revenue with our minerals, we need to ensure that we fully harness the opportunities presented by value addition on our products.”
Investors had been punching holes in the Legislation, saying it is not attractive at all to foreign investors.

A mining expert and interested investor in the country told this reporter that the King’s directive is welcome because reviewing the Legislation will attract more investors.
“The thorny issue about the current Legislation is the shareholding more so because mining is a capital intensive business, and therefore the shareholding structure should be making business sense to investors.

Investor

‘‘It will make more business sense if government shareholding could be reduced so that the core investor can have reasonable returns on investment,” said the mining expert and prospective investor.
The Mining and Minerals Act of 2011 stipulates that the King will acquire 25 per cent of shareholding without any monetary consideration and another 25 per cent shareholding in any mining enterprise that will be allocated to government.
Mining companies are also expected to pay rent for the area where company mining is going on to the head of State (royalties).

According to the Ministry of Natural Resources, the country has more than 100 million tonnes of coal, 500 million tonnes of iron ore, 2.1 milliom tones of gold and over 5 million tonnes of diamonds available in areas which are not mined.
Translating these mineral deposits to mining years, it could be 260 years for coal, over 300 years for iron ore, over 200 years for gold and a minimum of 21 years for the mining of diamonds.