Department of Mineral Resources on its 2012 Strategic Plan

Meeting report

Mr Thibedi Ramontja, DMR Director General (DG), said that the department addressed its duties through four decentralised programmes: Programme 1, Administration; Programme 2, Mine Health and Safety (MHS); Programme 3, Mineral Regulation (MR); and Programme 4, Mineral Policy and Promotion (MPP). Each Programme Manager presented their respective Programme’s performance and strategic plans.

Mr Nthupheni Ragimana, Chief Financial Officer (CFO) of the DMR, said that the presentation for Programme 1 would encompass (1) budget & spending outlook, (2) resource plan per programme, (3) expenditure estimate analysis, (4) resource plan per economic classification, and (5) branch strategic objectives

Mr Ragimana said that the DMR’s total budget for 2012/13 was R1,169 billion, an 8.8% increase from 2011/12. The money was split between departmental programmes (55.8%) and state-owned enterprises (44.2%). Under-spending was well below the 5% allowed, at 0.92% (R9,5 million). The increased budget would cover salary increases, and R350m of the increase would go to the the Council for Geoscience (CGS) and Mintek, split over the three-year Medium Term Expenditure Framework (MTEF).

The budget for Programme 1 (Administration) was R263m for 2011/12, and would increase by 0.7% to R270m for 2014/15 (below inflationary rate). This was, first, due to department’s efforts to decentralise funding for Programme 1 while redistributing the funds among the others programmes, and, second, due to general efforts to reduce government spending. The MHS budget, set at R135m for 2011/12 was projected to increase to R175m by 2014/15 due to the additional allocation of funds from Programme 1. The MR budget, set at R184m for this year, was projected to increase marginally to R195m by 2014/15 (below inflation rate) mainly due to the budget cuts. Finally, the MPP was projected to increase from the current R442m to R720m by 2014/15 (12,7% increase) due to the new funds received through the economic support competitiveness package.

Compensation of employees was increased due to inflationary adjustments. Expenditures on Goods and Services showed a decrease from 2011/12 to 2012/13, mainly due to a combination of the budget cuts (R16m) and a reclassification of some expenditures from the Goods and Services to Transfers Payments (R20m). Lastly, Transfers and Subsidies increased from R420m in 2011/12 to R560m, growing at 33%, also due to new funds received through the economic support competitiveness package.

Regarding stakeholder perspective, the DMR aimed to provide reliable and timely information by measuring performance, conducting compliance review and adhering to prescribed timeframes (e.g. for submission of annual financial reports, monthly reports to national treasury, etc.). The DMR also looked to improve service delivery by adhering to defined turnaround times and improving the level of customer satisfaction (1-5 index). The Department also aimed to educate and empower stakeholders, hoping to reduce both the number of complaints and the level of non-compliance with internal processes. The DMR would promote transformation policies, such as increasing the percentage of suppliers whose invoices were paid within 30 days.

In terms of learning and growth, the department examined leadership and management within the department, ensuring managers were well trained and on track to advance to the next level. They also aimed to attract, develop and retain skills with a number of human resource development initiatives and efforts to reduce employee attrition.

As for finances, DMR aimed to maximise utilisation of resources and eliminate asset losses. The Department strived to align its budget to the overarching strategy, avoiding major shifts from the original plan and managing costs effectively.

In terms of promoting corporate governance, the department examined its own performance and assessed the implementation of the management action plans according to feedback from internal and external audits. Lastly, the Department strived to effectively implement the compliance framework and aimed for 100% compliance.
 
Mr David Msiza, Deputy Director-General (DDG): Mine Health and Safety (Programme 2), said the Department’s objectives included the achievement of a 20% reduction in occupational fatalities, injuries and dangerous occurrences, and a 10% reduction in overexposure to silica and noise exposure limits. It intended to carry out 8 000 inspections and 396 audits.

The MHS administered several examinations for skills training, but there was a very high failure rate. It was reviewing the assessment process in conjunction with universities and the Mining Qualification Authority. However, the MHS was cognisant that the review could not compromise the quality of the examination process and would continue to ensure proper accreditation of service providers. It had entered into two service level agreements. The first agreement was with Wits University for training mine inspectors. The second was with Goldfields to provide learner inspectors to spend two years gaining experience, which would be followed by two years at a regional office to comply with qualification requirements.

Mr Joel Raphela, DDG: Mineral Regulations (Programme 3), said priority had been given to applications for new mining rights to promote job creation. In addition, an increase in compliance inspections was expected to spur job creation through the implementation of social and labour plans. The Programme would emphasise sustainable resource use and the alignment of social and labour plans with the New Growth Path. Mine closures would be assessed in line with Section 43 of the Minerals and Petroleum Resource Development Act (MPRDA) and the Department would implement the transformation policies. It planned to do 1 500 environmental programme inspections, as these have the capabilities of increasing compliance rates.

Mr Tseko Nell, Acting DDG: Minerals Policy and Promotion (Programme 4), said the Department intended to promote investment in the mining sector by means of 35 publications, seven strategic partnerships and support for 67 Small Micro and Medium Enterprises (SMMEs). It was in the process of completing three value chain specific implementation plans. It had embarked on an audit of mine dumps and tailings as part of its strategy of concurrent rehabilitation of mines, and was aiming to reduce the number of derelict and ownerless mines. The plan called for it to look at 12 mines this year. The Department would be working in conjunction with Mintek and CGS.  

The DMR was also working with the Department of Water and the Department of Science and Technology on acid mine drainage (AMD). It was sealing abandoned shafts. It had reviewed the MPRDA and the MHS Act, and Amendment Bills had been drafted and certified by the State law advisors. It was conducting policy impact study reports and developing baselines on transformation in the industry.

Ms Patricia Gamede, DDG: Corporate Services (Programme 1), said it had a communications strategy to alert stakeholders on the progress and endeavours of the Department in trying to achieve its mandate. It was facilitating projects for women in mining. There had been a decrease in vacancies, but attracting, developing and retaining skilled staff was difficult, especially in the area of inspectors.

In terms of internal processes, the Programme reviewed its policies and procedures on an on-going basis. Additionally, they had focused on providing effective legal support, as well as compliance with human rights legislation through financial declarations and performance agreements.

Discussion
Mr A Nyambi (ANC) expressed concern over the budgetary data in Programme 1 not being as clear and straightforward as Programmes 2, 3, and 4. He also asked whether the four programmes were working properly as they currently were or whether they should be restructured to allow the DMR to more effectively conduct its business.

Ms B Abrahams (DA) asked for the current number of beneficiaries in Programme 1’s brick making project for women. She also asked what projects the department had for disabled people and for what levels of disability. Regarding benefits to communities, she asked what percentage of the community at large would benefit from the DMR’s work and in what provinces. And in relation to the MMP’s rehabilitation of mine dumps, she asked what would be done regarding health issues resulting from the dumps and what kind of opportunities would be provided to local residents in these areas.        

Mr K Sinclair (COPE) asked what else the government could do in regards to illegal mines, as this continued to be a lucrative enterprise. He also asked for the status on beneficiations and whether the DMR should be moving toward the implementation phase.

Ms E van Lingen (DA) was concerned that the presentations were vague and unclear about how much money was being spent on derelict mines and the mining environment. Aside from the CFO presentation, the other presentations gave the impression that the DMR was not running well and that it had to reduce irregularities. Further, this was an NCOP committee and the presentations had failed to show how much money was going to be spent in each of the provinces.

Mr B Mnguni (ANC) asked whether the department was on target to meet its goals on the issue of transformation, and if targets were not achieved by 2014, how much would need to be transferred. And, regarding mineral policy, he asked how far the department was from reaching its targets.

Ms M Dikgale (ANC) asked whether MHS’s efforts to contribute to skills development were targeted just for mineworkers or a broader outreach programme.

Mr Ramuntja responded in turn. First, in response to Mr Nyambi regarding the quality of the four programmes, they were currently working properly as the programmes adhered to the Department’s mandate. These programmes addressed the DMR’s problems and advanced their goals as they work to manage the industry. However, Mr Ramuntja conceded that the DMR should potentially look to increase capacity.

In regards to Mr Mnguni’s question on transformation and policy enforcement, and whether the department was transforming enough, Mr Ramuntja replied that the department itself had transformed; but challenges remained in the transformation of the mining industry. However, if the DMR properly implemented the elements of the current plan, they should be successful in transforming the mining industry as well.

Ms Gamede, in response to Ms Abraham’s question, said that approximately 20 women currently got assistance from the Department of Trade and Industry, but this number was subject to vary as some women came and went. And in regards to projects for the disabled, the Department was still looking for projects. Notably, some mining companies continued to resist assisting the DMR with projects for the disabled.

Mr Ramontja, in reply to Ms Abraham’s question on mine dumps, said the biggest challenge remained that some of those mines were owned by private companies. The DMR had to work with the Minister to come up with a comprehensive strategy to address this issue.

In response to Mr Sinclair’s question on illegal mining, in the past the Department had been successful in addressing this problem by engaging the police, stakeholders and the community to find a solution. The mines agreed to devise a plan and to rehabilitate, which proved successful. Rehabilitating the mines would minimise the problem of illegal mining, but rehabilitation posed challenges. For instance, some companies that mined continuously could become bankrupt and unable to rehabilitate.

Regarding beneficiation, the department developed a strategy and was working on implementation. This needed to be a collaborating approach with other departments as well, like the Department of Trade and Industry and the Department of Science and Technology. The Minister had previously said that they did not expect miners to be the beneficiators. Miners generally facilitated beneficiation.

Regarding derelict mines, the Department did not have enough resources to fully address this problem. Therefore, this issue was likely to take many years to resolve. He stressed that this issue was not unique to South Africa, as it affected any country that engaged in mining.

As for mining in the provinces, the Department could provide a report that addressed this information. The DMR’s work was not centralised and took place principally in provinces through its regional offices. Also, DMR’s associated institutions would have programmes in the provinces. The DMR could provide the Committee with additional information in this regard.

Mr Ragimana replied to the question on finances, saying the DMR had to ensure that all issues were addressed concurrently. The DMR had a centralised control system with regional support staff. As for costs, the DMR would work on the numbers and get back to the Committee with a response.

Mr Msiza said that as mining grows in other regions, the DMR would aim to ensure that rural areas also benefited from mining operations.

Mr Raphela responded to Mr Mnguni’s question on whether the targets would be reached by 2014, indicating that since the last assessment in 2009, the department had introduced a three-part structure to monitor progress. With annual reports and efforts to increase compliance and enforcement, the DMR was confident that it would be able to meet its targets.

The meeting was adjourned.