Are South Africa’s Post-Apartheid Land Laws Working?

Sunday, 27 September, 2015

South Africa’s land laws are a lot stricter than they once were, that’s for sure.

Stricter on business, that is.Whereas under the old apartheid regime, companies could hold the rights to land in perpetuity, and whereas unusually that included both surface and subsurface rights, the advent of the post apartheid government changed all that.

Now, as is common with many countries around the world, including the UK, subsurface rights are under the control of the state. They can be used under license, but not owned outright.

In a country where land remains and is likely to remain a very contentious issues, it’s important that these things are laid out with some legislative clarity.

When it comes to the practicalities of operating on the ground, though, a certain element of pragmatism is also helpful.

So says Fortune Mojapelo, the man at the helm of Bushveld Minerals, a company pushing on with the development multiple mining assets centred around the famous and prolific Bushveld region not far from Johannesburg.

This is an area which accounts for the majority of the world’s platinum and platinum group metal production, not to mention a fair bit of its chrome and nickel.

It’s dominated by major players in the platinum industry like AngloPlatinum, Lonmin and Impala, but in recent years there’s been plenty of room for smaller companies to have a go too.

That’s partly on account of the sheer scale of the Bushvelds platinum endowment, but also a direct result of the post apartheid government’s introduction of a use-it-or-lose-it rule, under the terms of which licenses, previously held in perpetuity automatically revert to the state if the given owner does not undertake some form of work on them.

This too, is standard practice in other parts of the world.

But in spite of all these strides as to ownership, it’s still important to consider and if necessary to conciliate the local population on an ongoing basis, no matter what sort of title a company is sitting on.

“In South Africa, and title and mineral title are distinct”, says Fortune. “But when you’ve got mining title you’ll invariably enter into an agreement with the landowner.”

That’s step one. Step two is the local populace.

Here, there can be some easy wins for companies, providing they tread carefully.

“The land we’re looking at has a local community and the local community stands to benefit”, says Fortune. “It’s employment. Our mining laws require a social and labour plan in terms of the economic development of the area. We would source products and supplies locally where possible. All of these things are things that a responsible mining company would do, and we want to do that.”

Indeed, he says, “You cannot get your mining right without doing all that.”

In a sense it’s a simple exposition of a classic economic theory. One local enterprise stimulates others, and economic development then occurs across a wider front.

In South Africa though, things are complicated by the lingering legacy of apartheid and the bitterness it’s left in communities.

Unions in South Africa, for example, remain some of the most militant in the world, as workers struggle to absorb the reality that the leaders who once led them on strikes against apartheid era bosses are now themselves the bosses.

There are numerous examples of such figures, most notably Cyril Ramaphosa, a serious player in the ANC battle against apartheid, particularly at the end when he advised Nelson Mandela.

Ramaphosa was a union organiser with platinum miners on the Bushveld, but more recently he was a director of Lonmin – at the time when a largely black police force opened fire on striking workers at the Marikana mine, killing scores.

These contradictions make navigating the South African business environment particularly difficult when it comes to natural resources like land and metals.

Many argue that the once-feted black economic empowerment policy has failed. It has simply enriched a new set of elites, this time from the ANC.

But there’s no doubt that the new land laws have made a difference. There may be corruption in the Mines Ministry (widely alleged, though rarely on the record) and there may be contradictions in the Black Empowerment process.

But it is at least now possible for the people of South Africa to own and control the land and mineral assets of their own country via their democratically elected representatives.

That’s progress of a sort, even if a truly benign business environment does remain chimeric.