SIBANYE-Stillwater's decision to restart its R6bn Burnstone gold project in South Africa's Mpumalanga was based on the hope the group would not be required to re-empower the project in two years' time when its current licence expires.
"We’ve made a decision to proceed," said Richard Stewart, CEO of Sibanye-Stillwater in an interview with Miningmx last week. "There’s still uncertainty around what’s going to be in the MPRDA with regard to empowerment, and if it works against us, that could definitely place that capital decision at risk."
Amendments to the 2002 Minerals and Petroleum Resources Development Act, gazetted in Parliament in May last year, shocked the mining sector because they appeared to ignore a High Court judgement in 2021 which ruled that companies that had complied with empowerment targets held that status in perpetuity.
Instead, the amendments opened the door to the mines and petroleum resources minister creating new regulations in terms of B-BBEE Codes of Good Practice. At the time, the Minerals Council of South Africa declared it had been blind-sided by the possible changes, known as the Mineral Resources Development amendment bill.
"The issue with Burnstone is that we’ve got to renew that licence in a couple of years’ time. If we’re forced to re-empower, that has a massive impact on the economics," said Stewart.
Burnstone is scoped to produce about 130,000 ounces of gold a year at steady state and has an estimated 25-year mine life. Sibanye-Stillwater plans to spend R3.5bn completing the project infrastructure over six years, with the processing plant expected to start in 2029.
The project comes as production from its gold division has shrunk drastically over the past five years from just over a million ounces in 2021 to 632,341 oz in 2025.
If anything, Sibanye-Stillwater's decision to go on risk with Burnstone could be a leading indicator of optimism in South Africa's mining industry about proposed amendments to the MPRDA following recent discussions.
Speaking at the Joburg Indaba last week, Ntokozo Nzimande, the Department of Mineral Resources' deputy director-general for mining, mineral and policy development said her department held constructive meetings with the Minerals Council in July.
“What product do you want to see come out of this legislative review?” she recalled asking Paul Dunne, president of the Minerals Council, and his team. The discussion was “very constructive”, she said.
Now that the bill was at Nedlac (National Economic Development and Labour Council), “we are at one in almost everything”, said Nzimande.