The South African mining industry has always, to varying degrees, been regulated by a framework of laws addressing key elements of the mining lifecycle such as prospecting, mining, environmental, water, emissions, land use, and post – closure commitments.

However, this legal framework is becoming more complex, and navigating the ever – changing legal framework and, most importantly, complying with the requirements of the legal framework, has become extremely challenging.  

By: Warren Beech, Chief Executive Officer of Beech Veltman Incorporated

While many countries with mineral resources in Africa have updated legislation, but retained a less complex legal framework, South Africa is on an accelerated path to becoming one of the most complex mining jurisdictions, impacting on investment, compliance, growth, development, and transformation.

1. In addition to the regular and routine amendments to environmental laws, such as waste and dust, there are numerous proposed or imminent changes to the mining, health, safety and environmental legislation that have far – reaching consequences.
2. These changes include significant changes to the Mine Health and Safety Act (MHSA) which are anticipated to be introduced in Parliament soon, proposed amendment to the Mineral and Petroleum Resources Development Act (MPRDA) and, under the Carbon Tax Act (Carbon Tax Act) there is the proposed  Draft Technical Guidelines for the National Greenhouse Gas Carbon Budget and Mitigation Plan Regulations (Draft Technical Guideline) and the Draft Technical Guidelines for the National Greenhouse Gas Carbon Budget and Mitigation Plan Regulations (Draft Regulations), both of which are currently open for public comment until 30 September 2025.

   Collectively, the changes will introduce stringent compliance requirements, enhanced enforcement powers and increased penalties for non – compliance. There is also the impact of carbon tax based on the implementation of the first commitment period starting in January 2026 under the Carbon Tax Act and the Draft Regulations (which will have to be promulgated before the end of 2025).

3. The amendments to the MHSA will include material changes regarding training to be provided to employees, significantly enhanced powers and functions of the Mine Health and Safety Inspectorate to enforce the provisions of the MHSA, and to issue “blanket instructions” which may address health and safety “beyond the mine fence”, and increased penalties that could include fines of up to 10% of  a mining company’s turnover in the preceding year or the value of exports, whichever is higher.
4. The proposed changes to the MPRDA include increased penalties (also based on percentage of turnover), increased criminal sanctions, regularisation of artisanal and small-scale mining, beneficiation responsibilities and requirements, and enhanced consultation and engagement requirements.
5. While the Draft Regulations are intended to give effect to the requirements of the Carbon Tax Act, the Draft Regulations and Draft Technical Guideline raise more questions than giving answers, around key aspects such as the calculation of a data provider’s emissions, the way in which carbon budgets will be allocated, and compliance requirements in the various commitment periods.
6. This new legislation, together with changes to key aspects of the mining and environmental legislation over the past two to three years, will significantly increase the complexity of the legal framework, and this will require mining companies to adopt a new approach, or risk non – compliance, and the consequences that flow from this.

   The new strategy must include a multi-disciplinary approach to compliance which acknowledges that perspectives add value and provide novel, practical, implementable solutions. Buy – in from key stakeholders such as the recognised trade unions, communities, regulators, service providers and employees is vital to achieving, and just as importantly, maintaining, a complaint operation.

7. Additionally, unless mining companies allocate appropriate resources (people and money) to identifying compliance requirements and ensuring that the compliance requirements are met, enforcement action is likely to follow, which can result in stoppages of operations, suspension or revocation of prospecting and mining licences, and even asset forfeiture where mining is regarded as illegal.
8. The legal framework, and compliance, is made even more complex by the regular judgments of the South African courts and, in relation to employment aspects, the Commission for Conciliation, Mediation and Arbitration and the Labour Court, which interpret and apply the relevant laws that apply to the mining and natural resources industry.
9. The statutory duty of care which was introduced by Section 28 of the National Environmental Management Act (NEMA) has been the subject of various judgments of the South African courts, and the scope of the “duty of care” is being extended through these various judgments, together with what is regarded as sufficient to meet the requirements.  

   The duty of care applies very broadly and incudes government. In the recent judgment (14 July 2025) of the High Court of South Africa, Gauteng Division, Pretoria, in the matter between Petrus Johannes Barnard & Others v The Minister of Environmental Affairs & Others (Barnard Judgment) the court had to address a claim for damages by Barnard & Others (Plaintiffs) which allegedly arose from the government’s  contamination of irrigation dams while conducting eradication of alien vegetation on the Plaintiff’s farm.

10. In the course of determining whether the Plaintiff’s would succeed with their delictual claim for damages, the court had to canvas the “duty of care”. The court concluded (at paragraph 175) that “… the plaintiffs were owed a duty of care which is grounded in Section 24 of the Constitution”, and at paragraph 176 that “… the above Constitutional right is supported by a raft of legislative provisions, primary amongst them which is the NEMA. As articulated by the SCA in Global Environmental Trust & Others v Tendele Coal Mining (Pty) Ltd & Others at par 31: “both the MPRDA and NEMA are statutes that give effect to the right to have the environment protected for the benefit of present and future generations, enshrined in s 24 of the Constitution. It is a settled principle that courts are required to interpret statutes purposefully, in conformity with the Constitution and in a manner that gives effect to the rights in the Bill of Rights”.

    The court also emphasised that the defendant (the Minister) cannot contract out of its constitutional or statutory obligations and the Minister and the relevant Departments failed in the performance of the roles and responsibilities.

11. A range of consequences can flow from non-compliance with the “duty of care”. This includes private prosecution. The NEMA makes specific provision for private prosecution and establishes lesser requirements that must be met, for a private prosecutor to initiate prosecution under NEMA. The judgment of the High Court, Gauteng Division, Pretoria, on 1 April 2019 in the matter of Uzani Environmental Advocacy CC and BP Southern Africa Proprietary Limited was groundbreaking in several respects, primarily because it resulted in the private prosecution of BP.

    The court confirmed that private prosecutors can step into the gap created by a failure of the Director of Public Prosecutions to prosecute applicants that have submitted applications in terms of Section 24G of NEMA.

12. In addition to criminal prosecution and potential claims for damages, consequences include:
13. Reputational risk – often when the “duty of care” has not been complied with this can result in an impact on a company’s reputation and its relationships with key stakeholders such as the regulators, communities, trade unions, employees, investors and other business partners;
14. Media and publicity – non-compliance often results in unwanted media attention (particularly on social media) which plays into the reputational consequences referred to above. Adverse publicity also often leads to intervention by stakeholders such as the regulators, trade unions, non-governmental organisations, etc.;
15. Disruption to operations – issuing of instructions and directives. NEMA, National Environmental Management: Waste Act (NEM:WA)  and the National Water Act provide for the issuing of instructions and directives;
16. Criminal prosecution – NEM:WA, NEMA and the National Water Act all provide that non-compliance with the responsibilities under the relevant legislation and/or any terms and conditions of a licence/authorisation is a criminal offence, and a range of persons can be prosecuted including the company, its directors and officers, environmental and relate advisors, and any persons who have actually cause or may cause pollution;
17. Consequences in respect of mining rights, environmental authorisations and other licences. The MPRDA requires the holder of a relevant right to comply with the provisions of the MPRDA, the terms and conditions of the relevant right, and all other legislation such as NEM:WA, NEMA, the National Water Act, the MHSA etc. Non-compliance could result in the suspension or revocation of a relevant right;
18. Delictual damages – as mentioned above, the Barnard Judgment specifically addressed delictual damages arising out of a breach of the “duty of care”.
19. One of the key principles in support of health and safety obligations under the MHSA is the principle of “zero tolerance”, typically used in the context of compliance with mine rules and standards, including in relation to drugs and alcohol. The Labour Court has been consistent in its interpretation and application of “zero tolerance” regarding drugs and alcohol, but has become more flexible in relation to non-compliance with other rules in place.

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The Labour Court was again required, recently, to consider the interpretation and application of a “zero tolerance” workplace policy in the matter of Chill Beverages Internation (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration & Others (C160/2025) [2025] ZALC JHB 298 (14 July 2025) (Chill Beverages Judgment).

Chill Beverages manufactures and distributes various beverages. The employee was appointed as a forklift (machinery) driver and his duties included transporting raw materials (including heavy bags of sugar and containers containing up to 1000 litres of liquid ingredients) with a forklift.

The employee was dismissed for alleged gross misconduct after failing a breathalyser test on 20 May 2023.

During the arbitration proceedings, it was undisputed that Chill Beverages had an Alcohol, Drug and Substance Abuse Policy (Policy) in place, and that the employee had been made aware of the Policy. The Policy prohibits employees from having any intoxicating substances in their bloodstream during working hours, and they are forbidden from using any alcohol during work or within six hours before the start of their shift. The Policy included a “zero tolerance” clause and that certain levels of alcohol would automatically lead to a disciplinary hearing and possible dismissal.

On 20 May 2023, the employee was subjected to a breathalyser test when entering the factory. The employee tested positive for alcohol  and had to undergo the test several times. Chill Beverages also used different devices to ensure that the initial device was not faulty (an important element). The employee was also required to wait in the canteen, where he could eat and drink before being re-tested. The employee tested positive for alcohol in all tests that were administered by Chill Beverages.

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The employee prepared a statement in which he submitted that he had used medication (cough mixture) and was unaware that it contained alcohol. The evidence at the arbitration was that the employee did not smell of alcohol and displayed no visible signs of being intoxicated. He was also a first offender, with six years of service at the time of his dismissal.

In summary, the employee’s case was that he unknowingly contravened the Policy because he did not know that the cough mixture contained alcohol.

Chill Beverages argued that it had a “zero tolerance” policy, and that an employee working on machinery while under the influence posed a serious occupational safety risk.

The employee referred a dispute to the CCMA alleging an unfair dismissal. The arbitrator considered Chill Beverages’ Policy and found that each case must be considered on its own merits taking into account the nature of the employee’s role, the risk to the work environment, and the employee’s service record.

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The arbitrator found that the employee was a credible witness, and no evidence was presented to dispute the employee’s claim that he was unaware that the cough mixture contained alcohol. The arbitrator found that certain elements were important, namely that the employee was not intoxicated and did not show signs of intoxication.

The arbitrator determined that there needs to be independent evidence of an employee being under the influence of alcohol or being intoxicated (despite testing positive) and that the employee was clearly not intoxicated. The arbitrator referred to Samancor Chrome Ltd (Western Chrome Mines) v Willemse & Others (referenced above) where it was established that numerous factors can lead to a positive breathalyser test result, other than consuming alcohol.

Chill Beverages challenged the finding of the arbitrator that the employee did not violate the Policy, despite testing positive, which had not been disputed. Chill Beverages also questioned the conclusion of the arbitrator that evidence indicated that the employee was not under the influence (impairment) of alcohol, despite testing positive.  Further, Chill Beverages submitted that the arbitrator failed to recognise that the nature of the work being carried out at Chill Beverages by the employee was high risk.

In summary, Chill Beverageschallenged the arbitrator’s award, because, it argued, the arbitrator had disregarded the “zero tolerance” mandate (despite acknowledging the strict Policy) on the basis that the employee had unknowingly consumed alcohol in medication, his apparent lack of intoxication, clean record, and the distinction made by the arbitrator regarding detectable levels of alcohol and actual impairment.

The Labour Court rejected the arguments presented by Chill Beveragesand held that the arbitrator had, appropriately, considered the employee’s credibility, mitigating factors, and assessed all elements holistically. The Labour Court emphasised the duty on the employer to show that dismissal is both suitable and proportionate to the offence.

• The various aspects addressed above, demonstrate clearly that carrying out mining and prospecting operations in South Africa is not easy, and investors must ensure that they have a proper understanding of the complexities so that appropriate decisions can be made, and stakeholder expectations can be managed.

Warren Beech, Chief Executive Officer

Warren Beech, Chief Executive Officer of Beech Veltman Incorporated, is an internationally recognised legal expert in mining, energy, natural resources, environmental and infrastructure law. With over three decades of experience, he is widely respected for his in-depth understanding of the regulatory and commercial landscape across these sectors.

Warren has advised on a number of complex mining transactions, both in South Africa, Africa, and internationally. He regularly acts as a trusted commercial advisor to multinational corporations involved in cross-border mining and energy projects.

His practice is multidisciplinary, with a particular focus on commercial, health and safety, environmental compliance, regulatory frameworks, and broader governance issues. He is also deeply involved in matters relating to the energy transition and advises on renewable energy projects.

Acknowledged by Chambers and Partners, Who’s Who Legal, Best Lawyers and The Legal 500, Warren is ranked among the top legal professionals globally for his contributions to mining, energy, and natural resources law.