20100817
reuters

PRETORIA (Reuters) - South Africa will impose a six-month halt on new mining prospecting bids pending to allow the overhaul of the minerals law after damaging disputes with two firms over rights, a minister said on Tuesday.

Mining Minister Susan Shabangu said all applications already placed would be processed according to existing law and past decisions were unlikely to be overturned.

But the ministry would propose amending the mining act, likely to come into effect next year, to prevent a recurrence of the kind of confusion in two cases that raised questions about government competence and transparency.

"We are going to do an audit to eliminate inefficiencies," she told reporters, but dismissed concerns that this would worry investors.

"We are not closing down business ... we need to make sure that we create a better space for business."

The measure came in response to an appeal by Kumba Iron Ore and Lonmin over the government's granting of a prospecting right to Imperial Crown Trading (ICT) and Keysha Investments, respectively, over areas they were already mining.

While awarding a prospecting right over an area already being mined might not "make sense", it was legal, Shabangu said, adding that the audit and amendment would address the issue.

An area of the mining act that would be amended is the question of whether firms needed to make multiple applications for associated minerals, as was the case with Lonmin, she said.