Assessing competitive resource tenders as an option for mining rights allocation in South Africa

This research paper examines competitive resource allocation systems (auctions or tenders) as a potential alternative to the 'first-in, first-assessed' (FIFA) principle for mining rights in South Africa, weighing the potential for increased state revenue and transparency against the risks of institutional weakness and delayed resource development.

• Competitive resource allocation systems are proposed as an alternative to the first-in, first-assessed (FIFA) principle, which was specified in section 9 (1)(b) of the Mineral and Petroleum Resources Development Act of 2002 (MPRDA) but is no longer included in the draft bill. This shift is supported by Minister of Mineral Resources Susan Shabangu’s 2012 budget vote speech, where she indicated the Department of Mineral Resources' intent to auction lapsed or revoked mining licences.
• Competitive bidding systems offer three primary advantages: they can increase the state's share of economic rents from mineral resources, mitigate the state's informational disadvantages compared to private firms, and increase transparency in rights allocation. These systems are most effective when geoscience data suggests high-value mineral deposits. However, their success depends on clear, publicised evaluation criteria and timelines to prevent favouritism, which can be difficult to administer in environments with weak institutions.
• The FIFA system provides distinct advantages over competitive bidding, including lower administrative burdens, faster application processing, and the encouragement of private sector exploration in areas with limited known reserves. The state must balance the potential gains of an auction system against the risk of delaying the development of mineral resources.

APA

South African Institute of International Affairs (2013). Assessing competitive resource tenders as an option for mining rights allocation in South Africa. https://saiia.org.za/research/assessing-competitive-resource-tenders-as-an-option-for-mining-rights-allocation-in-south-africa/

Chicago

South African Institute of International Affairs. Assessing competitive resource tenders as an option for mining rights allocation in South Africa. 2013. https://saiia.org.za/research/assessing-competitive-resource-tenders-as-an-option-for-mining-rights-allocation-in-south-africa/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Assessing competitive resource tenders as an option for mining rights allocation in South Africa |date=3 November 2013 |url=https://saiia.org.za/research/assessing-competitive-resource-tenders-as-an-option-for-mining-rights-allocation-in-south-africa/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2013assessing, author = {{South African Institute of International Affairs}}, title = {{Assessing competitive resource tenders as an option for mining rights allocation in South Africa}}, institution = {South African Institute of International Affairs}, year = {2013}, month = nov, url = {https://saiia.org.za/research/assessing-competitive-resource-tenders-as-an-option-for-mining-rights-allocation-in-south-africa/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }