Lawyer Monthly Legal Awards 2023 These realities form a key component of any advice that we give. Without acknowledging these realities, expectations, including those of shareholders and funders, cannot be properly managed. It is only by identifying and acknowledging these risks and challenges, that they can be managed. In your experience, what are the key legal considerations for companies looking to enter the mining and infrastructure market, and how can they best prepare to tackle these? The South African mining industry is regulated by a complex legislative framework, which must be clearly understood by any companies wanting to participate in South Africa’s mining industry, whether directly, through extraction, or through beneficiation and other services. The starting point is therefore always to engage with multidisciplinary, trusted advisors, who have experience in the relevant fields. South Africa also faces some unique challenges, given South Africa’s history, and it is vital for companies to understand the complexities surrounding ownership and participation under South Africa’s Transformation Laws. Many overseas clients will not have had exposure to such complex Transformation Laws, and unless they have a proper understanding, not only of the Transformation Laws themselves, but also the requirements that must be met, the desired business outcomes may not be achieved. Many overseas companies do not fully understand the importance of the “social licence to mine”, which is vital for any involvement in South Africa’s mining industry. Could you describe a particularly challenging case or transaction you’ve handled in the mining, natural resources, or infrastructure sectors and the strategies you employed to navigate it successfully? The work that we do spans health, safety, environmental, commercial, mergers and acquisitions, compliance, regulatory and criminal. With our mining industry focus, this means that every matter has its complexities, and our starting point is always to ensure that we understand our client’s business, so that we can give practical, implementable advice. A basic philosophy that we embed in all of our advice is timeous, early engagement with stakeholders, so that they are part of the journey, or at the very least, flag issues of concern, so that they can be properly managed as the programme or project is implemented. Any attempt to participate in the mining industry, on a unilateral basis, without identifying and acknowledging stakeholder interests may lead to disastrous outcomes, and it is a key focus point of all the advice that we give. the construction of electricity generation facilities, such as solar and wind, attract less resistance from stakeholders, including employee representatives, but technology, for example, that monitors operator behaviour, fatigue patterns, productivity and related aspects, typically faces severe resistance, and in some cases, active sabotage, and circumvention. To address concerns, many of our clients have initiated comprehensive information-sharing programmes and reskilling initiatives to meet future requirements. Unfortunately, due to South Africa’s history, many employees in South African mines, are not necessarily able to change their existing skill sets, and this remains a significant challenge. As with all things new, resistance can be expected, and our advice typically includes information sharing, engagement and transparency initiatives. Given the volatile nature of global politics, how do you advise clients on managing the risks associated with resource nationalism and geopolitical tensions? South Africa has faced, and continues to face, calls for nationalisation and nationalism programmes. South Africa’s Mining Laws have tried to achieve a balance, by making the South African government the custodian of all minerals (as opposed to historical private ownership), with the minerals only being owned by companies and persons to whom rights to prospect and mine have been granted, once extracted. The rights to prospect and mine are subject to various commitments, including social and labour commitments and payment of royalties, to the South African government. Commitments under the approved social and labour plans require mines to implement programmes for, amongst others, community and other upliftment programmes. The social and labour plan commitments, together with the Mining Charter which addresses ownership by historically disadvantaged South Africans, are viewed by many South Africans, as insufficient, and there are regular demands for further nationalism programmes, and even nationalisation of South Africa’s mines. This is a reality of doing business in the mining industry in South Africa, and always forms a key component of our advice to companies wanting to do business in the South African mining industry. International events have significant impacts on South Africa and the mining industry, but these elements are often outside of the control of South Africa’s mining industry, and the practical focus is often more on geopolitical tensions which are closer to South Africa, including in neighbouring countries. Many of the persons engaged in illegal mining in South Africa, are reportedly non-South African citizens, which creates further tension. SOUTH AFRICA 115
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