Department of Mineral Resources on its Strategic Plan, with specific reference to Programme 2: Mine Health & Safety, Programme 3: Mineral Regulation; Programme 6: Mineral Policy & Promotion

Meeting report

Opening Remarks by the Acting Chairperson

The Committee Secretary welcomed everyone to the meeting and announced that the Chairperson, Mr O Sefako (ANC, North West) would be attending another meeting and asked the Committee Members to nominate an acting Chairperson for the meeting.

The Committee unanimously nominated Mr A Nyambi (ANC Mpumalanga) as the acting Chairperson of the meeting.

The Acting Chairperson read apologies from the Minister and Director General of the Department of Mineral Resources.

The Acting Chairperson welcomed the team from the Department and acknowledged the presence of the Deputy Minister of Mineral Resources. He asked the Committee members and the Department team to introduce themselves.

Remarks by the Deputy Minister Godfrey Oliphant

Deputy Minister Oliphant thanked the Acting Chairperson and the Committee or inviting the Department to the meeting. He expressed delight on the opportunity to brief the Committee on various aspects of what the Department of Mineral Resources does. He said the various Deputy Director Generals and officials present would be making inputs on topical issues that concerned the Department. He said in previous engagements with the Committee there had been some questions asked the Department which would be responded to.

The Deputy Minister highlighted that the mining industry had been having an interesting time both with the complexity that was facing the industry and also with the excitement going forward. He added that knowing the beautiful geology, South Africa still remained one of the main significant jurisdictions of mining because it had been mining formally for over 100years and the beautiful geology of the country still suggested that mining would be ongoing for the next 100years.He said it was important to try to resolve the legacies of the past and also plan for the future. The legacies included issues that related to the rehabilitation of the economy and environment that had been damaged over many years as it needed a lot of resources to resolve. He said the strides made over the years in Health and Safety would be elaborated in the presentation. There was a Summit last year with the Researchers Council to try and chart a way forward to deal with Health and Safety measures. In terms of economic growth, important investments were being done over the last ten years of MPRDA.

The Deputy Minister told the Committee of the challenges that were facing the industry now such as Commodity prices and compliance issues. Prices of platinum and coal were very low and companies were battling in that regard. When the law was passed and implemented in 2004, programmes of transformation for the next ten years were given which were elaborated in the Mining Charter. The Mining Charter tenure of transformation process ended December last year and at the moment the Department was dealing with assessing compliance. He said at the appropriate time as indicated by the Minister these issues in the public domain would be brought before the Committee for proper report.

The Committee was given an update on the MPRDA Amendment Bill which was still seating with the Parliament and NCOP as it was referred to them by the President. He said it was a topical matter that had to be taken forward.

Briefing on the 2015/16 Annual Performance Plan

Mr David Msiza, Chief Inspector of Mines DMR briefed the Committee on the 2015/16 APP of DMR. The mandate of the Department was found in section 24 of the Constitution of South Africa (Act 108 of 1996).

The Mineral and Petroleum Resources Development Act (Act 28 of 2002) and the Mine Health and Safety Act (Act 29 of 1996) provide the regulatory framework for the promotion and regulation of the industry, as well as the equitable access to and the sustainable development of the nation’s mineral resources and related matters.

The Minerals and Mining Policy of South Africa ensured the transparent and efficient regulation of the development of South’s Africa’s mineral resources and mineral industry to meet national objectives and bring optimum benefit to the nation.

Vision 2019: a globally competitive, sustainable and meaningfully transformed mining and mineral sector.

Vision 2030: a leader in the transformation of South Africa through economic growth and sustainable development by 2030.

Mission: to promote and regulate the minerals and mining sector for transformation, growth and development, and ensure that all South Africans derive sustainable benefit from the Country’s mineral wealth.

Values: Batho Pele (People first), Ethics, Honesty, Integrity, accountability, professionalism and Ubuntu.

Strategic Outcome-Oriented Goals include increasing investment in the mineral, mining and petroleum sectors; transforming mineral sector; equitable and sustainable benefit from mineral resources; efficient, effective and development-oriented Department.

Ms Irene Singo, DMR Chief Finance Officer gave the overview of the 2015/16 budget. Below is the outline in terms of expenditure estimates and programmes:

Programme                                        Medium-term expenditure estimate 2015/16

1. Administration                         293,223
2. Mine Health and Safety            175,840
3. Mineral Regulation                   260,443
4. Policy and Promotion               889,036
5. Compensation of Employees     528,440
6. Goods and Services                 277,661
7. Transfers and Subsidies           800,919
8. Payments for capital assets     11,522

    Total                                            1,618,542

 

Expenditure analysis: the Department received a baseline increase of R150 million over the MTEF and a baseline reduction of R73.5 million resulting in the net increase of R76.3 million over the MTEF: R42 million was allocated for the enforcement of the MPRDA 2002.

The Department was allocated R108 million over the MTEF on Shale Gas exploration.

Transfer and Subsidies would contribute 49.5% of 2015/16 total budget or 45.79% over the MTEF. Mine health and Safety Council did not receive allocation from National Treasury as part of cost containment measure.

Mr Mthokozisi Zondi: DMR Deputy Chief Inspector of Mines briefed the Committee on Mine Health and Safety (MHSI).

The Mine Health and Safety (Regions) was responsible for conducting audits, inspections, investigations and inquiries, enforcing the Mine Health and Safety Act and its provisions, examination services and providing professional services.

Governance Policy and Oversight (Head Office) was responsible for governance, development of policy and legislation that enhanced enforcement work, technical support of the region, chairing of tripartite structures(i.e MQA and MHSC);administration and issuing of government certificate of competency; and facilitation of HIV and AIDS work in the mining sector.

Prgramme 3: Mineral Regulation the strategic objectives include promoting job creation; promoting sustainable resource use and management, reduce state environmental liability and financial risk, implementing transformation policies/legislation, monitoring and enforcing compliance, improving turnaround times.

One-Environmental System Implementation Plan:

1. Training of Regional managers, deputy Directors and assistant directors as EMRI by January 2015 still ongoing.
2. Training of 60 additional MEM officials as EMRI to increase compliance by June 2015/Sept 2015 was in process, 30 targeted for reach period.
3. Finalize process flow which had been completed, mapping being finalized.
4. Recruitment and selection of staff started recruiting.

Framework Agreement: in July 2013 the former Deputy President facilitated the development of the Framework Agreement for a sustainable Mining Industry as mandated by the President.

SPP: Revitalization of Mining towns: in late 2012, an Inter-ministerial Committee for the revitalization of distressed Mining Communities was established to address Part 3 of the Social accord(SPP):addressing socio-economic challenges in mining districts and their labor sending areas. The IMC had focused on integrated and sustainable human settlements; improved socio-economic conditions; improved working conditions of mine workers; decent living conditions for mine workers.

Fifteen mining areas in five provinces and their associated labor sending areas had been prioritized for the revitalization of distressed mining communities: Limpopo, Gauteng, North West, Mpumalanga and Free State.

Twelve labor sending areas in two provinces had been prioritized for the revitalization of distressed mining communities: Eastern Cape and KZN.

Update on other strategic projects

Socio-economic diagnostic studies coordinated by DMPE: draft baseline diagnostic completed for all 15 mining towns and the 10 major labor sending areas drawn from EC and KZN; Offices of the Premier to play a crucial role in this process.

A Migrant Labor study had been completed with the participation of labor, business and Government. Policy proposals had been made relating to the development of integrated human settlements, the development of sustainable economic opportunities in the labor-sending areas, and the improvement of workplace relations in the mines.

Six districts investment opportunities studies had been conducted by IDC for the following regions: West Rand, Sekhukhune, Lejweleputswa, Bojanala, Waterberg, Nkangala.

These analyses were designed to assist municipalities attract investment and job opportunities to their regions by creating enabling economic development environment.

Continuous alignment of government plans to enhance Joint Programme Implementation remain key. Partnering with mining companies and government in the housing delivery encouraged.

Programme 4: Mineral Policy and Promotion strategic objectives include promoting investment in the Mining sector, promoting sustainable resource use and management, facilitating transformation in the Mining sector, developing and reviewing internal processes, improving turnaround times.

Acid Mine Drainage (AMD): the CGS prepared a comprehensive report on AMD in 2010; Cabinet established an IMC on AMD, constituted by DWS,DEA,DPME,DMR,DST and NT to consider the appropriate interventions sought to mitigate the effects of AMD, with focus on Wits Basin. A pumping and treatment facilities was installed at the Western Basin to neutralize acid water that was already decanting and to maintain acid mine water to well below the environmental critical level.

Beneficiation Strategy: Cabinet approved the beneficiation Strategy as a policy, the current MTEF commits development of the Mineral Beneficiation implementation plan (DTI as lead and DMR as support).

The MPRDA was being amended to provide the regulatory basis to provide for security of mineral supplies intended for local beneficiation and classification of minerals as strategic.

Shale Gas Exploration: the interdepartmental committee had developed Regulations for Petroleum Exploration and Exploitation to address the following: augment gaps identified in the current regulatory framework governing exploration and exploitation of petroleum resources, particularly in relation to Hydraulic Fracturing and prescribe good international petroleum industry practices and standards that would enhance safe exploration and production of petroleum.

The Communication Strategy and Regulations were presented to the IMC in April 2015 and would be submitted to Cabinet.

 

In conclusion, the Department was committed to continue with the journey of good financial management and implementation of the APP. In the implementation of the APP it would continue to work with stakeholders.

Discussion

Ms C Labuschagne (DA, Western Cape) thanked the Department for the clear presentation. She referred to the Policy initiative from the Strategic Plan 2014-2019 and asked when the last impact assessment of the Legislation was done; the outcome and the next regulatory impact assessments of identified legislations as the NCOP’s actual mandate was legislation. She referred to Communication marketing compared to the generalized and popularized awareness of Shale gas and hydraulic fracturing; she asked if the whole campaign was based on research; cost of the campaign; campaign role players and if there were donors to the campaign. She added that the Committee had not been given a feedback or presentation on the public entities under the Department and asked what entailed the oversight role of the Office of the Chief Operating Officer over the public entities. She required clarity on the online system for lodging and administrating mining and prospective applications. She asked the Department to provide breakdown on the different sectors within the mining industry and how they complied with the mining regulations. Also to be provided was the progress report on the eradication of illegal mines and the Department’s strategy on how to eradicate them. She referred to the acid mine drainage and asked if the report of the on-the-field investigation of the Oliphant Catchment area had been completed, when it would be released, the findings and the impact thereof. She asked the Department to do a report on the impact to the Committee. She requested that the Committee be briefed on the full beneficiation implementation plan framework of the Department. She referred to the Strategic Objectives on Resource management and account policy and asked for a presentation to the Committee on the timeframe for these. She asked for the progress and status of the MPRDA Act which was referred to the National Assembly and also to the President. She referred to the Department’s vision 2019 and asked what the Department was utilizing to ensure that South Africa mining was competitive and portrayed as been attractive as a destination for mineral mining and development. She asked how competitive SA mining was and its ranking in the developing countries and the rest of the world.

Deputy Minister Oliphant replied that the vision of mining competitiveness for 2019 would be provided in a comprehensive report as there were many indices used in mining for ranking. He said there were areas where the South Africa was doing well and vice versa. He added that the MPRDA amendment Act was not back to the President as it was still in the Parliamentary system due to Constitutionality and procedural issues.

Mr Joel Raphela, a DMR Official said further upgrades were effected to the online application system (SAMRAD) including implementation of a user-friendly modernized GIS system which was compatible with the other GIS systems used by other Departments including the one used by Environmental Affairs. This was to ensure that concerns and challenges related to applications in Geo sensitive area become well managed so that they can automatically block applications in those areas which would address the concerns raised. As part of support to the implementation of integrated mining licensing system(implementation of the one-environment system),data pertaining to environmental sensitive areas were provided by Environmental Affairs which had since been uploaded into SAMRAD to ensure that there was better data for purpose of decision making in managing applications and mining in environmentally sensitive and protected areas. He said a comprehensive report would be provided on compliance issues, breakdown of illegal mining, the various activities and interventions of the Department in respective regions.

Ms Singo added that the unit of the Chief Operating Officer supports the Minister in terms of the role of the Minister in oversight of entities mainly coming from the PFMA managing the agreement that they sign on a monthly basis, making sure that the quarterly reports were in place. There were officials within the Department that represented the Department in all the SOEs and they report on the operational performance of SOEs on their Executive board meetings on weekly basis hence there was some control around the governance of oversight on the state of the entities.

Mr David Msiza, a DMR Official said some of the reports would be forwarded to the Select Committee. He added that DTI was leading in the beneficiation framework and the Department was supporting in this process through its SOEs and NQA skills developments. The sector had identified some of the skill needs that had to be looked at and to ensure that there were enough entrepreneurs in the sector. The Department was engaging with FET colleges to come up with syllabi that would help the Department. MINTEK also helped some Provinces with their projects.

Ms B Masango (DA, Gauteng) commented that mine health and safety was not getting enough money due to tightening of funding hence there was need to work on that especially where the safety of women in mining was concerned. She asked for the implication of not allocating money to mine health and safety. She referred to the six district investment opportunity studies conducted by IDC as there was a huge need of job opportunities especially in area like Nkangala area. She asked for details on the investment opportunity studies specifically in Nkangala area.

Mr Joel Raphela replied that the six investments study conducted by IDC was underway: the Department would provide a comprehensive report on the progress of the study. The study was meant to ensure that when investments at reviving economic activities were made they were targeted at anticipating some of the constraints and what led to collapse or failure of previous interventions.

Mr David Msiza said there were enough budgets as engaged with Treasury for women in mining safety. One of the identified areas from the Summit held last year was the transformation work focusing on women. Research had been done through the Mine Health and Safety Council on women in mine security. The Department would come up with a guideline on how to deal with the security of women and their safety. The Department was also engaging with women in mining workers especially in the Rustenburg area and would be coming up with programmes to deal with those issues. Research was done on women safety devises (personal protective equipment) and the Department would come up with guidelines to help the women. Through the Council, the Department had developed promotional materials such as DVDs to ensure that male colleagues took the matter of sexual harassment seriously s there had been a lot of sexual harassment cases raised in the sector.

Mr C Smith (DA, Limpopo) commented on revitalizing mining towns especially Limpopo the essence as seen in local municipalities like Mokopuani and Mohalakwene which were growing in terms of resources like platinum reef which was said to be richer than the Rustenburg reef. He asked if the Department was been proactive or reactive in terms of the constraints and burdens brought to the towns through mining. He asked what the Department was doing to ensure that when a mine comes to present its social responsibility report it included discussions on what the needs of the town would be in terms of the burden that mining would bring on road or water infrastructure. He said there was a gap between what interaction was taking place with a municipality to make sure that the plan was viable and could contribute or cover all the gaps at the local municipal level. Going forward in terms of strategy when mining or exploration rights were given within flat lines of river system in flee land areas as there were quite a few mine upstream that companies were exploiting. He expressed concern at how close some plant mines were to rivers as no right should be given to explore in those areas. He said there should be interaction between the Department and the Department of Environmental Affairs as there seemed to be a gap.

Mr Joel Raphela replied that the special Presidential package was an intervention aimed at addressing a number of issues such as challenges arising from mining ghost towns and emerging challenges related to town that were in declining states. He assured members that Mohalakwene was not left out. He added that part of the aim of the special presidential package was also to ensure better integration and alignment between the social labor plan of mines and the IDP of municipalities. Applicants were required under the identification of the project to be implemented to consult and engage with the municipality also to convey in writing to the Department to the effect that had been identified were those that were aligned and drawn from IDPs of municipalities. Going forward on the amendment of MPRDA certain amendments had been proposed such as coordination of SLPs at the district level. He added that the implementation of the integrated system was intended to address some of the identified challenges in the past so that mining in certain areas could be restricted as well as the tightening up on the content of environmental authorization to prevent some of those challenges. He added that the Department had a structured manner of working closely with Department of Environmental Affairs and Department of Water and Sanitation through inter-Departmental project implementation Committee operated by the Department including coordinating some joint enforcement activities as identified as operating illegally including instances were exploration could be threatening.

Ms E Prins (ANC, Eastern Cape) asked if the Department could share with the Committee the status of the report on Women in Mining Strategy was completed on the 31st March 2015.

Mr David Msiza replied that the Department had committed to come up with a draft by the end of July 2015.

The Acting Chairperson commented that the Department should be consistent when giving reports of districts, Provinces and number of tripartite conducted in order to make it simple for the Committee to conduct oversight. He added that whenever the Department wanted to deal with Parliament as per the Constitution it should invite the Portfolio Committee without leaving out the Select Committee as the Select Committee played important role in oversight.

Deputy Minister Oliphant agreed that when there are important meetings, workshops or activities the NCOP and Select Committee must be invited. He added that some of the initiatives do come from the Committees on important matters that they wanted the Department to invite them to. He said the Department was available to come to Select Committee on specific issues. He wished to see better relationship coordination between the Select Committee and the Portfolio Committee. He said in future Mineral Regulations would be asked to give a breakdown of the districts and opportunities.

Mr Smith commented that civil society concerned about possible mining activities needed to put the site on the table had been having challenges as they had to compete with companies that had more financial resources. He added that in American model, funds were made available for civil society to challenge mines in terms of environmental studies and others. The challenge in South Africa was that the mines were appointing the same people that do environmental studies which would have conflict of interests and the civil society challenging the mines would have to do counter studies to prove that the environmental studies was not correct. The cost of paying specialists to do the studies was high; he asked if the Department was working on a framework that would enable civil society challenge mines on environmental impact studies. He added that there should be infrastructural impact studies in terms of municipal infrastructure on burdens brought towns by mines.

Deputy Minister Oliphant replied that there should be a debate on how to help civil society on issues that affected communities. The Department had tried to strengthen the law in terms of what should be done in consultation; rural development was playing a key role in terms how to assist communities on consultation in mining areas. Other interventions like the American model could be discussed at a later stage. He added that the Committee should do oversights to mines and the Department would come up with strategies to deal with issues on impact assessments of mine areas. Reports on other matters raised would be sent to the Committee.

Mr Joel Raphela added that on matters pertaining to mining and applications the MPRDA had a provision for objections that had to be lodged and considered through a structure called (RMEDC) Regional Mining and Environmental Development Committee. It was an important and cheaper route of dealing with objections and finding a balance between competing interests as sometimes mining could compete with other land use priorities. It also encourages stakeholder to better understand the regulatory framework.

The Acting Chairperson said the challenges facing south Africa was unemployment, inequality and poverty and the mining sector was important in terms of dealing with all the challenges. He noted the point raised by the Deputy Minister on the need for the Select Committee to work closely with their colleagues in National assembly in order not to be left out on initiatives brought by the Department.

Deputy Minister Oliphant thanked the Acting Chairperson for the efficient manner in which the meeting proceeded and thanked members for the encouraging and enlightening issues raised. He said it was important to focus on the sector as it was the backbone of the economy. He said the Department hoped to navigate the concerns raised by the President so that the issue of MPRDA would be taken seriously by the NCOP and National Assembly and the matter of National House of Traditional Leaders. He added that the mining industry was at an important and critical phase as the issue of transformation was on the table and the issue of mining industry performance under the difficult externalities influenced by global economic forces, commodity prices but believed that the mining industry would bounce back. It was important to consistently raise the issues of environment as the matter of legacy had to be dealt with. The matter of illegal mining was syndicated and the Department had been dealing with some syndicates. The issue of ex-mine workers was important as the Department had provided special clinics for ex-mine workers in some Provinces. He added that the Department would launch a campaign on how to proceed with payments of ex-mine workers.

The Acting Chairperson thanked the Deputy Minister and his team for the presentation. The Committee unanimously accepted the Budget Vote 29 and the APP 2015/16 of the Department of Mineral Resources.

Consideration and Adoption of Minutes

The minutes of the meeting of the 19 May 2015 were considered by the Committee.

Ms B Masango moved the motion for adoption of the minutes. This motion was seconded by Mr C Smith.

The Committee Secretary updated the Committee on the dates of further meetings.

The Acting Chairperson thanked members for the efficiency displayed during the meeting.

The meeting was adjourned.