South Africa

The principal statute governing mineral resources is the Mineral and Petroleum Resources Development Act No. 28 of 2002 (MPRDA), which establishes the state as the custodian of unexploited mineral resources and empowers the Minister of Mineral Resources and Petroleum (the Minister) to grant rights, permits and/or licences to exploit mineral resources (“Mineral Rights”). In granting said licences, the Minister is required to transform the minerals industry utilising the Mining Charter, which regulates transformative matters such as ownership, procurement, employment equity, human resource development, mine community development, housing and living conditions.

The Minister must ensure the sustainable development of mineral and petroleum resources within the framework of national environmental policy, norms and standards, while also promoting economic and social development.

Other statutes include:

• the Mining Titles Registration Act No. 16 of 1967, which establishes the titles registry such that registered rights are limited real rights;
• legislation relating to state royalties;
• principal environmental laws described below; and
• commodity-specific legislation such as the Precious Metals Act No. 37 of 2005 (“Precious Metals Act”) and the Diamonds Act No. 56 of 1986.

South Africa is continuously looking into ensuring policy certainty to improve investor attractiveness. Recent legislative developments such as the publication of the draft Mineral Resources Development Bill for public comment in 2025 demonstrate this ongoing effort.

A person may only prospect, mine or remove minerals if that person holds the appropriate right, permit or permission under the MPRDA. Once granted and registered in the Mineral and Petroleum Titles Registration Office (MPTRO), a Mineral Right constitutes a limited real right in respect of the mineral and the land to which it relates. The Mineral Right remains subject to the MPRDA, its terms and conditions, environmental authorisations, approved programmes, social and labour obligations, health and safety obligations and other applicable laws.

Surface access is usually secured through statutory rights under the MPRDA and arrangements with landowners, lawful occupiers or other affected rights holders, such as leases, servitudes, wayleaves, access agreements and compensation arrangements.

The MPRDA gives the holder of a Mineral Right statutory entitlements, including the right to enter the land to which the right relates, bring employees and equipment onto the land, prospect or mine for the mineral related to the right, and allows for the removal and disposal of minerals recovered during lawful operations. These rights are not absolute and must be exercised with due regard to the rights of landowners and lawful occupiers.

Mineral Rights are granted by the Minister and administered by provincial or regional offices. Other relevant authorities include municipalities, heritage and water authorities.

The main forms of mineral tenure under the MPRDA are reconnaissance permissions, prospecting rights, mining permits and mining rights. Prospecting rights may be granted for up to five years, renewable once for up to three years. Mining rights may be granted for up to 30 years, renewable for further periods, each not exceeding 30 years. Mining permits are intended for smaller-scale mining and are therefore granted for shorter periods.

A Mineral Right or an interest in such a right may not be ceded, transferred, let, sublet, assigned, alienated or otherwise disposed of without the Minister’s written consent, including the disposal of a controlling interest in a company that holds a Mineral Right, or in a company that controls such a holder, subject to the statutory exception for listed companies.

The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (the “Code”) sets minimum standards, recommendations and guidelines in that regard. It distinguishes between mineral resources (classified as inferred, indicated or measured, depending on the level of geological confidence) and mineral reserves (classified as probable or proved after the application of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental considerations). It is broadly aligned with international reporting systems such as the Australasian Joint Ore Reserves Committee Code and Canadian Institute of Mining as it is aligned with the Committee for Mineral Reserves International Reporting Standards reporting code.

Mining-related environmental authorisations are dealt with under the National Environmental Management Act No. 107 of 1998 (NEMA), with the Minister as the competent authority for environmental authorisations related to prospecting, mining, exploration, extraction or primary processing of minerals. A Mineral Right cannot lawfully be exercised unless the required environmental authorisation has been obtained, usually supported by an environmental management programme, specialist studies, public participation records, closure-related information and financial provisioning for rehabilitation and closure.

The National Water Act No. 36 of 1998 is key for water-use authorisations for abstraction, storage, discharge of waste or water containing waste, dewatering, impeding or diverting watercourses, streamflow reduction activities and activities affecting wetlands or water resources.

The National Environmental Management: Air Quality Act No. 39 of 2004 regulates atmospheric emissions and listed activities that require atmospheric emission licences, including certain smelting, refining, processing and combustion activities.

The National Environmental Management: Waste Act No. 59 of 2008 regulates waste management and contaminated land, and is relevant to mining waste, residue stockpiles and deposits, contaminated land reporting, remediation orders and waste-related authorisations.

The National Environmental Management: Biodiversity Act No. 10 of 2004 regulates threatened or protected species, alien and invasive species and biodiversity-related permitting.

The National Environmental Management: Protected Areas Act No. 57 of 2003 imposes restrictions on mining in protected areas and protected environments and requires ministerial permission in prescribed circumstances.

Community relations and consultation

The MPRDA requires consultation before the granting of Mineral Rights, and NEMA requires public participation as part of the environmental authorisation process. The purpose of consultation is to provide affected landowners and occupiers with sufficient information to make an informed decision on how to respond to the application.

Social and labour plans and community development

An applicant for a mining right is required to submit a social and labour plan (SLP) for approval, and the SLP must address human resource development, employment equity, local economic development, mine community development, housing and living conditions, procurement progression and processes for managing downscaling and retrenchment.

Compliance with an approved SLP is a material term and condition of a mining right. Failure to comply may expose the holder to regulatory enforcement, including directives, suspension, or cancellation proceedings.

The ESG framework for mining is a combination of hard law, policy instruments, listing requirements, governance codes, lender standards and voluntary frameworks. The binding legal framework includes the MPRDA, NEMA, National Water Act, Mine Health and Safety Act of 1996 (MHSA), labour legislation (the Labour Relations Act of 1995 (LRA), the Basic Conditions of Employment Act of 1997 (BCEA) and the Employment Equity Act of 1998), the Companies Act of 2008, the Carbon Tax Act of 2019 and the Climate Change Act of 2024.

Illegal mining affects abandoned, derelict and ownerless mines as well as operational mines, particularly in gold-bearing areas and in chrome and diamond mining regions.

The government has responded through multi-agency enforcement initiatives, including Operation Vala Umgodi, which is a coordinated response involving the police and other state agencies. The issue has also intensified public and regulatory focus on abandoned mine shafts, mine closure, rehabilitation and the criminal networks supporting illegal mining. In addition to operational interventions, the government is also considering policy interventions which will empower lawful artisanal or small-scale miners to enter the minerals industry. Alongside these enforcement measures, the government has sought to distinguish illegal mining from lawful artisanal and small-scale mining. The Artisanal and Small-Scale Mining Policy, 2022 establishes a policy framework aimed at facilitating lawful participation in the minerals industry, while recognising the need for stronger measures against illegal mining.

As at August 2026, the government has published the draft General (Mining) Laws Amendment Bill, 2026 (the “Bill”) for public comment. The Bill proposes amendments to the Criminal Procedure Act 51 of 1977, the Diamonds Act, the MPRDA and the Precious Metals Act. It proposes to amend the MPRDA to expressly criminalise illegal prospecting and mining activities and the direct or indirect assistance of persons engaged in such activities. It would also add these offences to Schedule 1 of the Criminal Procedure Act and significantly increase certain penalties under the MPRDA, Diamonds Act and Precious Metals Act, including maximum fines of up to ZAR 100 million and imprisonment of up to 30 years for specified offences. The Bill also proposes amendments relating to compliance and enforcement powers, including the conferral of certain MPRDA compliance functions on members of the South African Police Service.

The National Climate Change Response Policy White Paper (2011) is the policy framework for facilitating a just transition to a low-carbon and climate-resilient economy. Carbon tax is one of the key measures which are intended to achieve the objectives set out in the policy. The carbon tax design is influenced by the need to develop a comprehensive response to climate change, which response is impacted by international commitments.

South Africa is party to the Paris Agreement, pursuant to which it is required to develop a Nationally Determined Contribution, setting out the contributions it intends to achieve and its domestic mitigation measures in accordance with the global response to climate change.

South Africa has significant reserves of minerals relevant to energy transition, including platinum group metals, manganese, gold, vanadium, chromium, iron ore, rare earth elements, copper, cobalt and lithium. The Department of Mineral and Petroleum Resources announced the approval of the Critical Minerals and Metals Strategy in 2025, together with the publication of the draft Mineral Resources Development Bill. These link critical minerals to electric vehicles, hydrogen fuel cells, wind turbines, battery storage, microelectronics and advanced manufacturing. The strategy addresses extraction, exploration, geoscience mapping, beneficiation, value addition, localisation, infrastructure, energy security, research and skills development.

The draft Mineral Resources Development Bill may also affect critical minerals if enacted, particularly if it changes application processes, beneficiation obligations, small-scale/artisanal mining rules, export controls and the treatment of strategic minerals.

Private parties undertaking mining-related activities in South Africa are subject to several principal duties, royalties and taxes, as follows:

• The corporate income tax rate of 27%, (other than for gold mining companies). Gold mining companies are subject to a unique tax regime under which the applicable income tax rate is determined using a profit-sensitive sliding-scale formula, rather than the fixed corporate income tax rate.
• Income derived from conducting mining operations is subject to certain ring-fencing provisions in section 36 of the Income Tax Act No. 58 of 1962 (ITA), which provides for the calculation of taxable income from mining operations, including specific rules on capital expenditure deductions, the treatment of assessed losses from mining, and the redemption of capital expenditure against mining income.
• Tax incentives are provided to mining companies needing to fund and comply with regulated environmental obligations.
• Mineral royalties fall under the Mineral and Petroleum Resources Royalty Act No. 28 of 2008 (the “Royalty Act”). The royalty payable is determined in accordance with a specific formula and is dependent on whether the mineral is a refined or unrefined mineral resource. Royalties are profit-based rather than a flat ad valorem charge on revenue, hence the royalty burden adjusts according to the profitability of the mining operations. Payment of the mineral royalty is triggered upon the transfer of the mineral resource.
• Value added tax (VAT) applies to the supply of goods and services in the ordinary course of business. Where minerals are exported, export sales may be zero rated for VAT purposes, provided certain requirements are met.
• Mining operations with greenhouse gas emissions are further subject to carbon tax under the Carbon Tax Act, which imposes an additional tax on carbon dioxide equivalent emissions.

Domestic and foreign-owned mining companies are subject to the same income tax rates, royalty formulae, VAT, diesel usage incentives and carbon tax liabilities.

Non-resident shareholders and lenders may be subject to withholding taxes on dividends, interest and royalty payments. As cross-border structures must comply with exchange control requirements administered by the South African Reserve Bank, South Africa has concluded a network of double taxation agreements which may provide relief from withholding taxes in appropriate circumstances.

Non-resident shareholders holding at least a 20% interest in a South African mining company may be subject to South African capital gains tax (CGT) upon the disposal of their shares as South African mining companies are, in many instances, considered property-rich companies.

Tax stabilisation agreements are not a feature of South African fiscal law. There is no statutory framework under which mining investors may negotiate fixed or guaranteed tax terms with the state.

The income tax regime provides several incentives that are attractive to companies which carry on mining operations in South Africa.

• The capital expenditure deduction regime in section 36 of the ITA allows for deduction of expenditure incurred on shaft-sinking, mining equipment and mine development, against income earned from the mining operations. These deductions are generally more accelerated than the capital allowances for non-mining taxpayers, enabling mining companies to more rapidly recover their substantial upfront capital investment.
• The sliding-scale formula used for gold mining companies is explicitly designed as a fiscal incentive to keep marginal mines operational and acts as an automatic economic stabiliser for struggling mines. If a gold mine’s profit margin drops to 5% or lower, the formula yields a zero or negative tax rate, which means a marginal mine could pay 0% corporate income tax on its gold mining profits.
• Mining companies carrying on eligible activities are further permitted to claim a rebate for diesel usage. The scheme provides financial relief from the General Fuel Levy and the Road Accident Fund Levy for diesel consumed in primary production activities. Qualifying mining companies may claim a refund on 100% of eligible diesel purchases. Prior to 1 April 2026, claims were capped at 80% of eligible diesel usage.
• Section 11D of the ITA provides a research and development (R&D) tax incentive, under which eligible R&D expenditure may attract an enhanced deduction of 150% of the expenditure incurred. This incentive is available to mining companies that undertake qualifying R&D activities and has since been extended to 31 December 2033.
• The energy efficiency savings tax incentive in section 12L of the ITA provides a deduction for verified energy efficiency savings. The incentive has been extended and is in place until 31 December 2030.
• The Carbon Tax Act provides various allowances that effectively reduce the carbon tax liability for qualifying activities, including trade-exposure allowances for sectors exposed to international trade, and performance allowances based on greenhouse gas emissions intensity benchmarks.
• Mining companies are eligible to claim accelerated tax deductions for renewable energy investments under section 12B of the ITA. To be eligible, mining companies must legally own the renewable asset. Furthermore, mining companies must choose between section 12B and the standard section 36 mining capital allowances, as the law strictly prohibits claiming concurrent or duplicate deductions on the same generation infrastructure.
• The Royalty Act also contains a profit-sensitive formula that reduces the effective royalty rate as the profitability of a mining operation declines, effectively providing relief to marginal operations.

CGT applies to the transfer or sale of mining property, typically including land and mining rights. Any capital gain is included in the taxpayer’s taxable income at the applicable inclusion rate and taxed at the normal income tax rate. For companies, the effective CGT rate is 21.6%. Capital losses may only be utilised against capital gains, subject to certain ring-fencing provisions.

A transfer duty may also be payable on the acquisition of immovable property, including Mineral Rights that constitute immovable property. Transfer duty rates are progressive and depend on the value of the property acquired. However, where VAT is charged on the transaction, transfer duties are not payable.

The transfer of securities in a company may attract securities transfer tax, which is levied at a rate of 0.25% on the taxable amount of every transfer of a security.

See tax incentives in Section 4, above.

Foreign investors may apply for and hold mining rights under the MPRDA, acquire shares in companies that hold such rights, and participate in mining joint ventures, subject to the prescribed minimum levels of ownership by historically disadvantaged South Africans (HDSAs).

The section 11 consent regime mentioned above applies regardless of whether the acquirer is domestic or foreign.

The exchange control regime imposes reporting and approval requirements on certain cross-border capital flows that cross-border structures must comply with.

South Africa was historically party to numerous bilateral investment treaties (BITs) that protected mining and exploration investments. There has been a policy shift which has seen South Africa terminate most of its BITs in favour of domestic regulation. Investments made under BITs which have not been terminated or BITs with surviving sunset clauses continue to enjoy treaty protection. Recent investments in exploration and mining are primarily protected under the domestic laws including the Protection of Investment Act 22 of 2015, constitutional law, and administrative law, rather than treaties. Regional frameworks, such as the African Union’s African Mining Vision (2009) and the Southern African Development Community’s Protocol on Mining, provide cooperative structures for the mining sector.

Debt financing from commercial banks is the primary means of financing (both domestic and international banks). In this regard, syndicated lending is common for larger transactions. The terms on which debt is made available will typically reflect the risk of the mining right, the commodity and the quality of the security package available.

Mining companies may raise equity financing through the Johannesburg Stock Exchange (JSE) and international securities markets. Numerous South African mining companies also maintain listings on international exchanges, including the London Stock Exchange, the Toronto Stock Exchange, and the Australian Securities Exchange, either as primary or secondary listings. Cross-listing facilitates access to a broader pool of capital and enhances international visibility.

Private equity and venture capital investors are also another source of funding particularly for exploration-stage and junior mining companies. Funding by private credit actors may be in the form of:

• direct lending;
• mezzanine debt;
• equity or quasi-equity instruments like preference shares; and
• streaming or royalty arrangements.

Traditional banks, and to a certain extent, public markets, have had to carefully consider funding coal-mining activities due to their environmental policies; this has opened a funding gap that private credit funders have fulfilled.

A Mineral Right, being a limited real right, is capable of being encumbered, with Ministerial consent. Any encumbrance or cession of a Mineral Right is required to be registered against the title in the MPTRO.

Where the mining right holder owns the relevant land, lenders may take mortgage bonds over the immovable property, registrable at the relevant Deeds Registry.

Security over movable mining assets, including plant, equipment and vehicles, is typically taken by way of a notarial bond (general or special) registered at the relevant Deeds Registry.

Lenders may:

• take a cession in security of contractual rights associated with the mining operation, including insurance proceeds, bank accounts and intra-group receivables; and
• take a pledge over shares in the company, providing an indirect security interest over the mining assets at the company level.

The Council for Geoscience is responsible for geological information. It avails geological maps, mineral maps, geophysical data, geochemical data, active mine information, coalfield data and other geoscientific information useful to exploration and development companies.

Other sources include JSE announcements, annual reports and Competent Persons Reports for listed mining companies, environmental impact assessment reports and environmental management programmes made available through public participation processes, mining title records from the MPTRO, and municipal planning documents.

Access to environmental authorisations, water-use licences, compliance notices, directives, closure plans, financial provisioning information and historical mining-title records may require direct requests to regulators, and formal requests under the Promotion of Access to Information Act No. 2 of 2000.

The choice of structure is driven by considerations of limited liability, tax, Broad-Based Black Economic Empowerment (B-BBEE) compliance, regulatory requirements, and the preferences of the parties and financiers.

Common structures include:

• private companies with limited liability, separate legal personality and flexibility in shareholder structuring;
• publicly listed companies (these are subject to additional governance, disclosure, and reporting requirements under the Companies Act and the JSE Listings Requirements); and
• joint ventures, whether incorporated (i.e. a private or public company) or unincorporated (i.e. a contractual arrangement under which two or more parties contribute assets, rights or services to the joint venture and share revenues, costs and risks in agreed proportions without incorporating a separate legal entity).

Trusts and ring-fenced companies are commonly used in project finance structures, B-BBEE ownership schemes (particularly to facilitate community and/or employee participation), and streaming or royalty arrangements.