It has been claimed that poor laws relating to the mining industry are having a negative effect on the growth of the sector in South Africa.

A new report from Merrill Lynch has claimed that increasing regulation, coupled with underinvestment in the sector, has stymied the potential for mining firms to grow.

"The most enduring and uncertain constraint on investment in the mining sector has been increased regulation in the sector, which started with the 2002 Mineral and Petroleum Resources Development Act,'' the report states, according to Business Report.

This act details the transforming of old mining order rights into new rights and the Merrill Lynch report suggests that the changes required under these rules - as well as others - have made it difficult for mining companies to attract investment.

However, South Africa's Chamber of Mines said earlier this week that it expects investment to reach as much as R18 billion this year, which is higher than at any time since 2003, suggesting that the negative impact of the regulation may now be beginning to recede.

Source:

Merrill Lynch says bad mine laws slow growth, 8/11/07
http://www.busrep.co.za/index.php?fSectionId=&fArticleId=4118717

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