Hon Chairperson, hon Minister and Deputy Ministers present today, Members of Parliament, good morning to you. I extend a special welcome to the officials of the department who have been so supportive, and to all our guests I say good morning.
I would like to start by saying that the hon Fred Gona has been going through a difficult time owing to ill health, and as the Portfolio Committee on Mineral Resources we wish to give him our best regards and wish him a speedy recovery.
The 2012 Mangaung ANC conference gave a clear mandate with resolutions. Some of the resolutions are already being implemented by the Department of Mineral Resources and by the portfolio committee in its efforts to meet requirements related to its oversight work. This is not only the expectation of our government but also those of our commitment to building a developmental state, including economic growth in the mining industry.
Inspired by the theme of "Unity in Action towards Socioeconomic Freedom", we need to acknowledge an area where work still needs to be improved, and where work has already been done we need to compliment ourselves. We, as the ANC, therefore wish to support Budget Vote 32: Mineral Resources.
Amidst continued challenges and areas in need of improvement, I wish to give praise and show appreciation for the ANC-led government on progress made by the Department of Mineral Resources since its split from the then Department of Minerals and Energy in such a short space of time.
Accolades of praise need to be given in various ways - in areas of this ANC- led government - to hon Minister Shabangu, whom we greatly welcome, to the hon Deputy Minister Oliphant, and to all officials of the Department of Mineral Resources, led by the humble Dr Ramontja, in acknowledging that the Portfolio Committee on Mineral Resources has succeeded in service delivery through interactive working relations and co-ordination on various platforms.
We also need to commend our relations with entities of the department, with specific appreciation going to Mintec and Geosciences for having always shown their support for the portfolio committee by ensuring their policies and practices on mineral resources are of the best, and for also helping to remove discrepancies created in the past in our endeavours to ensure that the industry yields fruit for all South Africans.
Experiences of and encounters in our oversight work have been both good and bad, to the extent that where there were problems we had to ensure that the mining industry was called in and requested to comply with the department in ensuring that matters of compliance were adhered to.
Even though our challenges relate to our fellow opposition members - who even pass remarks on how our oversight work is a waste of time - will then be the very people who go behind our backs and do independent oversight instead of working with the collective to ensure that our work is unified and fruitful, and that more is achieved, rather than chasing individual praise. I am sure the hon Lorimer would recall this well. The mining industry will have to ensure that they now step up to the plate and stop acting like crybabies.
A lot of problems that we are still experiencing in the mining industry, including the issues of the strikes, appearances of low investments, myths, threats to the industry, and leaving the country must come to an end.
Instead, the industry should ensure that it complements the components of government and all other relevant stakeholders who are making every effort to ensure that negotiations within the mining industry are a success and that all employees in the mining industry start to benefit in all possible aspects.
It is sad to actually note that there are still mining industries which are not prepared to step up to the requirements of a social labour plan within their companies.
Since 1994, the ANC-led government pronounced its commitment to ensuring that the lives of previously disadvantaged people and conditions of employment are improved and realised. There is absolutely no reason why we should be begging them to do the same. Various platforms are there to talk. The doors within the ruling party are still and will always be open.
The portfolio committee has always shown interest in the most remote of mining companies and all efforts have been made to ensure that every stakeholder is made comfortable to participate and grow within the industry. I therefore will never understand, especially when it comes to the Chamber of Mines, why it is that we still face a bleak picture in the mining community.
To the Minister of Labour, and the Minister of Mineral Resources as well, I wish to plead with them to ensure that they continue going the extra mile, as they have always done. Firstly, the issue of the peaceful co-existence of unions and, secondly, the recruitment of union membership with violence necessitate a determination of a minimum entry level in the mining industry. Furthermore, regarding issues of payment and salaries, there has to be reclassification as a matter of urgency of, in particular, rock drill operators.
We welcome the victory achieved by the Minister of Mineral Resources in the Constitutional Court against AgriSA. AgriSA argued that the commencement of the Mineral and Petroleum Resources Development Act, the MPRDA, expropriated mineral rights. This judgment puts to bed the debates about the MPRDA being unconstitutional. I think the hon Schmidt would agree with me.
The Department of Mineral Resources facilitated a programme involving Anglo Platinum in job preservation. We once again congratulate the Department of Mineral Resources. Anglo Platinum and organised labour led processes related to the restructuring. This intervention has led to jobs being saved and ensured that the company continued to operate sustainably. It has also demonstrated the need for stakeholders to work together when faced with challenges. We must compliment them as the possible retrenchment of about 14 000 employees has gone down to just below 2 000 currently. This honestly means that there needs to be more of an open mind when it comes to the mining industry. [Applause.]
We still look forward to much improved advocacy and interaction on the processes and developments concerning the royalty Act of 2010, especially with regard to the mining community. This is so that there is an improved understanding of why there is a need for the country to benefit where it is deemed necessary by the Department of Finance, and to ensure that there are no unnecessary misconceptions to stall further work of the government. This would also therefore go for taxes due, which need to be paid by the industry, especially around ensuring proper beneficiation within the country.
I also wish to commend the work done thus far in the functioning of the Mining Industry Growth Development and Employment Task Team, Migdett. This is one platform where all stakeholders are represented. They should all humbly make use of it, please. As the portfolio committee, we honestly request that a better understanding disseminate down to ground level where it can actually be understood that with the existence of Migdett there is the possibility of improving the situation in the mining industry.
Without further comment, I conclude by saying that I really do wish to say thank you for the support that you have been giving each other in the Department of Mineral Resources with the Portfolio Committee on Mineral Resources. Inasmuch as the Minister is all over the country, doing her work with the Deputy Minister, we feel your presence.
And, in our feeling your presence, we feel the effort that is being made, considering where we came from - pre-1994 - to the present. Dr Ramontja, you are doing a great job. Please keep it up and please maintain the contact and relations we have with the portfolio committee, because without all of you I think a lot of work would still be outstanding. Thank you. [Applause.]
Minister, we are quite keen to know why you are a few minutes late. I am sure you have a good reason for that.
Chairperson, my apology for being late. I was a victim of Public Works that side - the lifts.
All right, she has given us an answer. Let us continue.
Chairperson, acting chairperson, the hon Bikani and hon members, may I take this moment to convey my sincere condolences to all mineworkers who passed away during the past year. Today, we are honoured to table our budget allocation of R1,394 billion for the 2013-14 financial year, which represents an increase of R218,316 million at the most testing time in the postapartheid history of the mining industry.
We are mindful of the fact that we are tabling this budget one year short of two decades of freedom, whose 20th anniversary we will celebrate next year. This, in fact, is the last budget of the current administration. Our Budget Vote also coincides with the 50th anniversary of the formation of the Organisation of African Unity, OAU, now called the African Union, which played a key role in the decolonisation and liberation of the people of Africa. This is also a time when we are celebrating Workers' Month.
Through the budget we are tabling today, we are outlining the actions that we are taking to respond to the challenges currently bedevilling the mining industry. We are confident that, despite the current cyclical downturn and labour relations challenges, the medium- to long-term outlook for the South African mining industry looks extremely attractive. Last week, our President, Jacob Zuma, quite correctly called for leaders of this industry to restore calm and confidence in the sector. Following this, the Minister of Finance and I met with the leadership of the mining industry on Friday last week in a bid to address the challenges faced by this important sector of our economy. In this regard, we drew inspiration from our long-standing and well-entrenched culture of ... [Interjections.]
Excuse me, Minister, for a moment. Could the Whip please take her seat?
In this regard, we drew inspiration from our long-standing and well-entrenched culture of partnership in mining, which has consistently served us well during this difficult time. At this all-important meeting, we agreed on a specific programme of action. We agreed that the government's side would be led by the Department of Mineral Resources, National Treasury and the Department of Labour, while participation from the mining companies would be led by chairpersons of the boards, and will also engage the leadership of trade unions.
This was a bold and decisive action taken with a view to dealing head-on with the challenges faced by our economy. This has arisen because of a crisis of perception, of our country and the mining industry, which invariably has affected, among other things, the fluctuations of our exchange rate, the results of which we can ill afford as a country.
This process that was established at the Friday meeting is scheduled to conclude its initial tasks and provide a progress report within a month. Whilst we respect workers' inalienable right to strike and the right to freedom of association, as enshrined in our Constitution, we will not tolerate anarchy, violence, intimidation and illegal strikes, which threaten not just our democratic freedom, but also the sustainable growth and employment in a sector with so much to offer, not only in terms of retaining employment, but also in terms of creating new jobs on a larger scale than ordinarily would be the case. We are, accordingly, calling on all signatories to honour the letter and spirit of the law and the recently signed framework for peace and stability in the mining industry.
We need to join hands urgently and deal a cruel blow to those who are wilfully undermining the well-established system of collective bargaining that has been a critical component of the mining industry. It is true that South Africa has the world's largest mineral endowment with an estimated value of US$3,8 trillion. With these endowments, if properly exploited using the combination of appropriate policies and regulatory frameworks such as we have, we are more than capable of breaking the back of the triple evil of poverty, unemployment and inequality.
There is a confluence of factors which gives us good reason to be optimistic. Both the 2013 World Bank's Doing Business and the World Economic Forum's Global Competitiveness Report place South Africa in the top quartile. These reports show a set of enabling factors including, among other things, the ease of doing business; investor protection; access to loans; starting a business; and ease of dealing with construction permits, which, if properly harnessed, could significantly create a broad-based and robust economy, which our country desperately needs. In the same vein, I am encouraged by the voices of the young people in the leadership of the ANC Youth League who are saying boldly: "It is cool to get an education and get a degree." After all, it was the late ANC president Oliver Tambo who said: "A country that does not take care of its youth does not deserve its future". This is the kind of spirit that we need to reignite among workers in the Rustenburg platinum belt and the mining executives.
Hon members, as you know, we are currently in a cycle of wage negotiations in the mining industry, which we have done for decades. This year should be no different. However, there has never been a more opportune time to call on the protagonists in these negotiations to be more responsible and take decisions that will retain jobs, bring about stability in this sector, and ultimately help our economy as it emerges from the ravages of the recent economic downturn.
We should all take responsibility and accept accountability for the success of these negotiations. For, if we do not grasp the nettle, we run the risk of losing jobs and further fuelling negative perceptions that are being used to run our country down at a most inopportune time. Accordingly, we believe that if we can work together and forgo our narrow interests and act in the interests of all our people, we will indeed be able to rise to the challenges of regrouping and consolidating the existing building blocks for the long-term success of our mining industry.
This time last year, some observers were in a state of frenzy which they attributed to, among other things, calls by some siren voices for nationalisation. The ANC's Mangaung conference unequivocally rejected this option and further called for the intensification of beneficiation and industrialisation, which have been part of ANC policy since we adopted the Ready to Govern document, the declaration of strategic minerals, and the promotion of the state-owned mining company, among other things. These decisions demonstrate that South Africa's premier liberation movement, the ANC, is keen to ensure that we balance the imperatives of transformation with those of competitiveness of this crucial sector of our economy.
We believe that we have created a predictable regulatory environment which is in sync with the dynamic socioeconomic and political landscape of our country. This has resulted in the following milestones, whilst we still face challenges. Gross fixed capital formation has increased significantly under the Mineral and Petroleum Resources Development Act, from R18 billion in 2004 to R75 billion in 2012. Foreign direct investment grew exponentially from R112 billion to R389 billion from 2004 to 2012. Also, employment grew from approximately 449 909 in 2004 to 519 240 in 2012. In addition, gross sales of primary minerals have appreciated from R98 billion in 2000 to R371 billion in 2012, whilst the number of operating mines has increased from 993 in 2004 to 1 579 in 2012.
This is over and above the fact that during the 2012-13 financial year, 56 new mining rights were granted and have the potential to create an additional 11 000 decent and sustainable jobs and attract capital expenditure of about R7,3 billion. More than a decade of implementation has provided us with sufficient jurisprudence to further review and amend the Act. We sought to effect a holistic review and amendments of the principal Act that will cater for dynamic changes and sufficiently incorporate the notion of subsequent events.
Following Cabinet approval in 2012, we are satisfied with the quality of extensive stakeholder consultations and their substantive input. The issues raised by stakeholders centred on, among other things, the definitions; the repeal of the first-come-first-served principle; trading in shares and transfer of rights; the environmental provisions; ministerial discretion on mineral beneficiation and state free carried interest; the revised sanctions; and the concept of associated minerals. All these quality submissions have been duly considered in the process of finalising the Bill.
The Bill enhances the social and labour plans, SLPs, and also includes integration of SLPs into the integrated development plans of district municipalities in order to streamline and optimise the development impact of the mining industry. It introduces provisions for the classification of mineral resources as strategic, taking into account strategic national developmental imperatives.
The Bill realigns functions in order to consolidate the regulation of petroleum resources under the Mineral and Petroleum Resources Development Act, while promoting geoscientific research functions as incorporated in the Council for Geoscience. The Bill is in its final stages of Cabinet processes and will be submitted to Parliament soon.
There has been further improvement of the health and safety of workers in the mining industry since the implementation of the Mine Health and Safety Act. Currently, I have directed the department to embark on a process to review the Mine Health and Safety Act and align it with the Mineral and Petroleum Resources Development Act to ensure consistency, and ensure that we employ regulatory best practice regarding the impact that mining activities will have on the health and safety of mine employees and affected communities.
The review of the Mine Health and Safety Act seeks to, amongst other things, strengthen enforcement provisions, streamline the administrative processes, reinforce offences and penalties, remove ambiguities in certain definitions and expressions, and harmonise the Act with other laws, in particular the Mineral and Petroleum Resources Development Act.
May I report that we have made sterling progress in the implementation of the SA Mineral Resources Administration System, Samrad online, since it was launched. Prospective applicants are now able to apply for rights using computers online without having to travel to the regional offices to lodge an application. The system contains information regarding land availability, requirements for various types of applications to be lodged, and payment arrangements for fees payable. As a benefit of that, contestation as a result of the documents getting lost is going to be a thing of the past in my department.
To assist applicants, guidelines and templates were then supplied to improve the quality of applications as well as ensure consistency in the adjudication process. We are continually making sure that we improve this system in order to deliver an application system that is seamless and efficient. In this regard, applications for prospecting, mining rights, permits and ancillary applications, such as sections 11 and 102, can be lodged online. These include, among other things, a module which provides for the auto-parking of applications, which address one of the key concerns that have been raised by prospective applicants. This is being carried with the additional allocation by Treasury of R3 million for the current financial year.
We introduced the Broad-Based Socioeconomic Empowerment Charter for the South African mining industry, commonly known as the Mining Charter, to effect the meaningful transformation of the mining industry consistent with our democratic landscape. This was a consensus document by mining stakeholders that introduced a transitional transformation window of 10 years, with specific targets to be attained in 2014. We subjected the efficacy of this transformation tool to a rigorous test in 2009 in respect of its progress, the findings of which were less than desirable. During this time, every other stakeholder suffered from a case of parochial amnesia in terms of their responsibility for the implementation of this transformation agenda. As a result, we ended up with widely varied accounts on the extent or otherwise of the progress that has been made in this regard.
In order to obviate a recurrence of this misrepresentation and distortion, my department has initiated a comprehensive evaluation of transformation against the scorecard of the amended Mining Charter as a precursor to the 2014 transformational milestone.
Let me emphasise that we have no intention of shifting the goalposts with regard to our targets, but we wish to reiterate that we remain unequivocal and resolute in our commitment to transformation, which remains a vital component of normalising our society and creating a genuinely nonracial and democratic country without which we will not have a prosperous future. [Applause.]
The social problem that was accentuated by the unfortunate developments at Marikana in 2012, as well as several other related occurrences, reflects that there have been glaring lapses in the implementation of our transformation tool. I cannot overemphasise the urgent need to modernise the mining industry entirely, including recruitment patterns that remain trapped in the archaic model of migrant labour systems that entrenched apartheid. This system results in mineworkers leading multiple lives which they struggle to sustain.
In this regard, I call upon the entire mining industry to develop a 10-year company-specific strategy that will transition this industry from the obsolete model to one that is part of the modern society within which it operates, without creating abrupt discontinuities that result in unnecessary instability.
This will enable us to enhance our goal of competitiveness, improve the working and living conditions of mineworkers, and, ultimately, reduce the dependence of workers on the mining industry. Further, such strategies will assist us in preparing for the transition well in advance, anticipate the potential effect and plan accordingly to manage the transition to an appropriately modernised mining industry. In this regard, we also recognise the work of the Farlam Commission of Inquiry and we are confident that it will be able to emerge with recommendations which will strengthen our resolve to improve the lives of mineworkers and their immediate communities.
The President also established an interministerial committee to address socioeconomic developmental challenges arising out of the mining industry. The aforesaid IMC has developed a responsive presidential package, the results of which will be released soon, to optimise inclusive community development and improve the living and working conditions of mineworkers.
The coal sector is important for the economy of South Africa. The accelerated demand for coal, accompanied by an increase in international coal prices, has invariably changed the buying patterns and structure of the coal export industry. The emergence of the export market for lower grade coal has presented the government with a challenge in that it has constrained the availability of coal that was historically sold to our utility, Eskom.
In our national energy plan, coal remains an important component of our future energy mix and requirements. It is therefore paramount that we work towards a common objective, in which South Africa Inc confronts the challenges facing the coal industry and turns them into net positive opportunities for all.
We remain certain that certain minerals such as coal should be declared strategic national resources, based on the balance of evidence. The coal resources and reserves report has been concluded by the Council for Geoscience, and we hope to release the findings soon.
Hon members, last year Cabinet approved and accepted the release of a comprehensive report compiled by experts on hydraulic fracturing, which not only confirmed a shale gas resource of 485 trillion cubic feet, but also extensively considered optimal exploitation of the resource that appropriately balances economic interest with both environmental and social development considerations. The report was widely accepted by all interested and affected parties.
Cabinet was directed to establish an interdepartmental technical committee to develop regulations to presage further development of the shale gas resource. The committee will release the appropriate regulations soon, which then will be made public. We are engaging legal processes to finalise the establishment of a state-owned mining company, also with the intention to hive it off from the Central Energy Fund. [Interjections.] The prophets of doom have started.
The platinum and gold sectors, which are amongst the largest sectors of our mining industry in terms of employment, investment and revenue generation, are negatively affected by the persistent global economic market environment, which has an adverse bearing on their long-term viability.
Our recently concluded bilateral agreement with Russia during the Brazil, Russia, India, China and South Africa summit - Brics summit - in Durban on co-operation in the development of the platinum group of metals is premised on an understanding that parties will make every effort to achieve, among other things, sustainable expansion of the PGM market, create value-adding enterprises closer to production, and work towards realising the potential for developing other sectors of the economy. It is our considered view that this bilateral co-operation will contribute significantly to the creation of a suite of interventions necessary to stabilise the platinum industry. Therefore, I invite PGM companies to work with my department to leverage relations we have established with the Russian Republic.
In January this year, Anglo American Platinum announced its intention to restructure its business, following which President Zuma and the chairman of Anglo American plc, Sir Parker, met in Pretoria and agreed to find sustainable interventions that would enable business continuity and sustainability, whilst preserving employment where possible.
It is our firm belief that working together, we have found a sustainable, discerning solution, which we hope the labour movement will consider favourably. This demonstrates and emphasises the importance of taking different stakeholders into confidence and opening to them a long-term window which enables them to appreciate the dynamics of the inherently cyclical nature of the mining industry.
As we stand here today, the chrome value-chain participants have led the path to proactively find and explore mechanisms ... [Interjections.]
Hon Minister, your time has expired.
Can I use my extra time, Chairperson? As we have announced ... I have 10 more minutes. Let me use them, Chairperson.
I believe that you will have another 10 minutes at the end of the debate.
As we have announced on previous occasions, we have pioneered a mineral beneficiation strategy as national policy, we have developed a beneficiation strategy implementation plan framework. The implementation plan further outlines modalities for the implementation of the game-changing opportunity, which is conceptualised as a win-win value proposition for miners, beneficiators and the industry. It is important to reaffirm our position that mining rights holders are not expected to undertake beneficiation as it is not their core business, but rather to contribute meaningfully to national development through mechanisms outlined in the plan.
Since the introduction of the Precious Metals Act and the Diamonds Act, as amended, the benefit of jurisprudence has highlighted significant shortcomings during the implementation of both Acts, both of which have experienced reversals in transformation and a decline in beneficiation activities related to the jewellery industry. It is our intention to review both Acts in order to maximise the beneficiation of precious metals and diamonds, the developmental impact and transformation in general in the subsector. We have partnered with other provinces like Gauteng and Mpumalanga in this area.
As we speak today, South Africa is not only a founding member state of the Kimberley Process, which was inaugurated at the Tabernacle Church in Kimberley, but was the first chair of the scheme. This year, the international diamond community has reaffirmed its confidence in South Africa by bestowing the honour of chairing the scheme at its 10th anniversary since its establishment. As we know today, the proceeds of conflict diamonds have previously been used to destabilise democratic governments, especially in Africa.
I am pleased to inform the House of our readiness to host an important meeting of the Kimberley Process in June. We, once more, commit ourselves as South Africa to leading. We have coined a felicitous theme for the period of South Africa's chairship of the Kimberley Process that is titled "Ten Years of stemming the flow of conflict diamonds", which will inform and direct proceedings of crucial engagements with Kimberley Process participants.
As we speak today, Mintek is involved in research on nanotechnology for medical applications of gold and to give effect to the hydrogen strategy. Our science councils, in the form of Mintek and the Council for Geoscience, play a critical role as delivery agents in the rehabilitation programme that seeks to mitigate the negative environmental legacy of our mining and associated latent hazards to proximal communities.
In conclusion, we have demonstrated both as the ANC and the government, led by this glorious movement of our people, that we are perfectly capable of rising above narrow short-termism and that we take decisions that are in the best interests of this country and our people.
I am sure that building on what we outlined today, we can indeed work together in partnership and demonstrate respect for basic and decent things like collective bargaining structures. If we succeed, we will build on the Freedom Charter and the constitutional promise of handing over a country to the next generation that truly and genuinely belongs to all those who live in it, black and white.
I respectfully request this committee, my hon colleagues on my right or left, to support this budget. On our side, we will continue to work towards a clean audit going forward. I look forward to you, hon Smith, and hon Lorimer supporting us. I thank you. [Applause.]
Madam House Chairperson and Minister, if things are going so well in mining, why is the industry in such bad shape? We have heard fine words from our ANC colleagues, but things have regrettably gotten worse. Since we discussed the budget of this department a year ago, the mining industry has slid from the uplands of viability towards the trough of failure. The ANC government is shambling from one disastrous policy decision to the next. Things have gotten worse for mineworkers. Many of them have lost their jobs or are going to lose their jobs.
Things have also gotten worse for mining companies. As many as two thirds of our platinum mines are losing money. The platinum index has just hit a seven-year low. We see job cuts and reduced investment at Goldfields and AngloGold. Mining output was down 12,5% last year.
What do you do if the industry is in trouble? Well, if you are the ANC, you lay plans that will only make it worse. The new Mineral and Petroleum Resources Development Amendment Bill, MPRDA, is set to squeeze more out of the industry, while making operating conditions even more onerous. It will dry up our already shrinking pool of mining investment. The government will earn less tax and more people will lose their jobs.
One of the main criticisms of the MPRDA, since it was first passed, was that it left too much decision-making in the hands of the Minister and her officials. That discretion meant that the law could be unevenly applied and, worse, it was impossible to predict the conditions under which mining investment would take place. Investments began to dry up and the industry began to shrink.
We were assured that the new amending Bill would take care of this, but the reverse has happened. In the old Act, there are 26 instances where officials or the Minister have discretion. Well, there are 34 such instances in the new Bill. This is not logical for anybody with the priority of encouraging new investment. There must be some other priority in the ANC's thinking.
Some members on that side of the House are great followers of theories of class. What a pity they confine their studies to the sayings and writings of two pale, male Germans of 145 years ago. [Laughter.] They should spend their time far more fruitfully studying a more relevant class - one that explains much of what afflicts South Africans today, and in particular South Africans in mining. This is the class of insiders, of people who are connected to government, of tenderpreneurs, the cronies - who are effectively our new ruling class. [Interjections.]
It's no coincidence that some of the more prominent scandals in mining over the past few years have involved companies that are connected to members of ruling party royalty. [Interjections.] Look at Aurora, the now infamous granting of mining rights to a company linked to Zuma and Mandela relatives, a deal that resulted in jobs being lost and workers being robbed by looting company owners. [Interjections.]
Then there is the case of Imperial Crown Trading. Despite being without visible assets in either money or expertise, but connected to representatives of the Zuma, Mandela and Motlanthe families, this company is being assisted by the Department of Mineral Resources all the way to the Constitutional Court. [Interjections.] Assistance, incidentally, which the department is not keen on talking about in the portfolio committee; a reluctance which is supported by the ANC in that committee. [Interjections.]
Members, could you please keep the noise down? I cannot hear the speaker.
By the way, if there is a memo that has gone out to ANC members telling them to go easy on officials and Ministers in the portfolio committee, there's no need to send that memo to the Portfolio Committee on Mineral Resources because it's already allergic to tough questions. [Laughter.]
Former Gold Fields chair, Mamphela Ramphele, says the government shoved a list of empowerment beneficiaries down Gold Fields' throat. [Interjections.] When Gold Fields complied, it won rights to mine at South Deep, its most profitable and only remaining South African gold-mining operation. And who was on that list of beneficiaries? Well, the list appears to have been assembled by convicted bank robber Gayton McKenzie. He was apparently paid some R30 million for the tough task of handing out patronage. The list included just over 70 beneficiaries, from President Zuma's lawyer, to former Deputy President Baleka Mbete, Zindzi Mandela, as well as the daughter of a former member of the Portfolio Committee on Mineral Resources, known for his softball questions. [Interjections.] It seems name-dropping is not only a problem at the Waterkloof Air Force Base.
These are some examples of who benefits from a subjective system of ministerial and official permissions. Decisions don't have to be fair or stand the test of law. They can be capricious and illogical. Comrades can be given special favours and, equally, those who do not do exactly as the state wants can be punished.
It's becoming increasingly clear that the whole edifice of our mineral resources regulatory regime is there primarily to advance the interests of the crony class. Cash for comrades! The imperative to build the economy so that government revenues and employment can benefit comes a poor second.
If there was truly an intention to put the needs of broad-based empowerment first, then government is missing opportunities to show it. In the new legislation, there could have been some attention paid to artisanal miners. If you want to know who they are, you can find them every day of the week on the northern outskirts of Soweto within a few metres of the Randfontein road, panning for gold like old-time Rand pioneers. It's unlicensed mining. They are breaking the law, and are probably deeply in with criminal syndicates, protected as they are by armed minders. The police know they are there. The Hawks know they are there. The portfolio committee knows they are there. The Department of Mineral Resources knows they are there, and nothing gets done.
If they don't have to obey the MPRDA, why should anybody else? Could these miners and others in the same position not be given some way of continuing their work legally? If this government was intent on empowering people, it would have looked at legalising their position, but is has not because they are not a priority. [Interjections.]
I am willing to be convinced that it's not all about cronies. Minister, here is a direct challenge to you. To help us believe that you truly back the empowerment of all disadvantaged South Africans, change your definition of BEE in the new Mining Charter. Make it so that the only empowerment that counts is the empowerment of workers on the mines ... [Interjections.] ... and people from surrounding communities. [Interjections.]
If you do that, Minister, I will reconsider my opinion of your motives. But fail to do it and my opinion will be confirmed. All I can see are more oligarchs being empowered again and again. [Interjections.]
A whole new industry awaits us in the oil and gas-drilling sector, and here is another example of how government's poor stewardship of our mineral resources is driving away investors and costing us opportunities. [Interjections.]
New theories about South Africa's offshore seabed geology mean that some of the world's major offshore drilling companies have taken up leases off our country's coast for the first time ever. It costs between $75 million and $100 million to drill one deep-sea well.
A number of companies stand ready to drill several test wells each off the West Coast, off Cape Town, off Mossel Bay and off Durban. Those companies expect to find at least gas in large quantities, if not oil. This should be one of South Africa's most optimistic economic stories, and yet it may never happen because the MPRDA Amendment Bill is scaring off these drilling companies that may never risk their money when government will control all the rewards.
Here's why. Previously, drillers were faced with having to hand over 9% of their operations to BEE partners, as they fell under the Liquid Fuels Charter. They will now fall under the Mining Charter with a 26% BEE requirement.
More worrying is that there is also a clause that gives the state a free carried interest of unknown percentage in any oil or gas operation. And there's more. There is a provision for the state to acquire yet a further interest through an organ of state or a state-owned company, the size of which is not specified. All this, of course, comes on top of regular taxes and royalties.
This ownership grab is accompanied by vague but potentially devastating powers given to the Minister to regulate what products are sold where and at what price, effectively nationalising all critical decision-making.
These drilling companies are used to handing over a lot of tax and control to governments, but even for them this may be too much. None of this potential energy boom may ever happen if the MPRDA Amendment Bill, as presented, becomes law. These major drilling companies will begin to drift away to find easier places to operate - in Africa, and across the world.
It seems the ANC's focus is to put its cronies in charge of the economy, no matter that in doing so it will hamper the growth of the economy and keep people poor. [Interjections.] The ANC would rather see cronies be king of an ant heap than lift the whole of the country out of the mire of poverty. [Interjections.] [Applause.]
Hon Chairperson, in Deloitte's 2013 State of Mining report, the question is asked ...
Members, could we allow the speaker to be heard.
... the question is asked as to how South Africa, once the world's most attractive mining destination, lost its spot on the podium.
There is no disputing that South Africa has failed to capitalise on the commodity boom, and is no longer the mining giant of Africa it used to be. Should the answer lie in the midst of South Africa's threatening call for nationalisation?
To the Minister's credit, she has stated that nationalisation of mines would not happen in her lifetime. But can the Minister confirm to us that the ANC and its alliance partners, the SA Communist Party and the Congress of SA Trade Unions, share the same view?
In April this year, the general secretary of Cosatu reminded the tripartite alliance that nationalisation emanated from the 1955 Freedom Charter and that greater state intervention in the economy is required by the ANC.
Hon Minister, one day the ANC and its government says we have a plan, the National Development Plan, NDP, but the next day the ANC alliance partners, in the form of the SACP and Cosatu, ravish the very same plan. Which one is it, hon Minister? [Interjections.]
You have said: "not in your lifetime". Hon Minister, how long is your lifetime? How long is it going to be before you are going to be called to Saxonwold to be told your fate? Could the answer lie in the poor maintenance of infrastructure?
Order! Order, hon member. Won't you take your seat and allow for the ... What is your point of order, hon member?
Chairperson, the speaker is misleading the House. She says that one day the ANC turns around and kicks away the NDP. That is misleading, because the ANC has never done that.
That is not a point of order, hon member. Please sit down! I am not taking any more points of order. Hon Kilian, would you please sit down?
Hon Chairperson, that was not a point of order. That is a point of dispute. Thank you.
Although an estimated R4 trillion will be spent over the next 15 years ... [Interjections.]
You don't know your story, Minister.
I wrote it myself, thank you. [Interjections.]
"Mining is a big, hairy, risky business," says Barry Davison.
We need certainty in mining ... to invest ... There are unknown costs in South Africa, imposed by the Black Economic Empowerment Charter or by the imposition of too high royalties.
If the statement by the former chairperson of Gold Fields is correct, as previously stated, that names were shoved down Gold Fields' throat, then that is nothing short of gross institutionalised corruption and blackmail under the guise of black economic empowerment.
The dodgy R2,1 billion BEE deal was facilitated by former bank robber Gayton McKenzie, the best friend of sushi king Kenny Kunene. Who were the ANC's preferred names? We've heard those of Baleka Mbete, Mandla Msimang, Limpho Hani, the widow of the late Chris Hani. Hon Minister, would you confirm or deny that this practice of insisting upon the enrichment of members of the ANC is a prerequisite of doing business in South Africa?
Yes, what is your point of order, Minister?
Hon Chair, I just want to know if it's possible to give the member a little bit of water so that she can lower her speed. We want to understand what she is saying, but she is so fast that I cannot hear a word.
That is not a point of order.
Cope questions if Glynnis Breytenbach ...
Carry on please. Could we have some order in the House, please!
... senior prosecutor for the National Prosecuting Authority, NPA, was suspended in a bid to stop her from prosecuting former crime intelligence head Richard Mdluli, in the case involving Sishen and Imperial Crown Trading, ICT.
We know about the CARgate, hon Minister, the Zuptagate and the Nkandlagate. But I am sure that if we investigate, I have no doubt that we will uncover the "Miningate". [Interjections.]
The NDP refers to the shrinkage as an opportunity lost in the mining industry. The NDP further lists the following constraints: an uncertain regulatory framework, uncertainty around property rights, electricity shortages and prices, infrastructure weaknesses, and I will add one more point: heavy political interference.
Who is to blame for the uncertainty in the regulatory framework? Who is to blame for the uncertainty around property rights? Who is to blame for the electricity shortages and prices in this country and for the infrastructure weaknesses? [Interjections.] Who is to blame for the environmental damage and acid-water drainage? The answer is short: the ANC-led government!
Could the answer lie in the severe labour unrest in this country? Cosatu itself has acknowledged that the National Union of Mineworkers, was losing ground and that they have become fat cats, corrupted by greed, money and political favours at the expense of the poor guys, the grassroots workers they are supposed to represent.
It is said that at the Lonmin Mine car park you cannot differentiate between the cars driven by mine executives and those driven by Num shop stewards. South Africa is the only country in the world where shop stewards are earning R1,5 million per year, whilst mineworkers live in rudimentary shacks made of plastic, metal and wood, with no electricity. There are no sewerage systems, and the tracks between the shacks serve as roads.
Shockingly, 9 000 of Lonmin's 33 000 employees are engaged through labour brokers. Rumours accuse the ANC's deputy president, Cyril Ramaphosa, of being the Dr Evil behind labour brokerage and the Marikana Massacre.
It is alleged that Ramaphosa's labour brokerage takes as much as 50% of a poor worker's money. The most serious indictment against the governance of this country by the ANC and the state of mining in this country was the most unfortunate and damning event post liberation: the Marikana Massacre.
We need to ask why such a violent and forceful response was taken by the SA Police Service. We need to ask why 34 workers were killed by their very own government. These workers were not even destroying property, whereas the recent truck drivers' strike saw trucks being destroyed. None of these workers was dealt with in the same way as the miners were dealt with. This begs the question, hon Minister: In whose interest was government acting? [Interjections.]
The involvement of government officials in mining companies is undermining democracy, causing tension and conflict. Hon Minister, do you not see the dangers of deploying prominent politicians to the boards of mining companies and positions?
Hon Minister, this failing government is failing our people. The time has come to have accountable, reliable and incorruptible leaders. Thank you. [Applause.]
Hon Chairperson, could I please address you on a point of order?
Could you please sit down, hon Hlengwa.
Hon House Chairperson ... [Interjections.]
Hon Chairperson, I just wanted to say that there are members of the ANC who are repeatedly, with impunity, transgressing the Rules of the National Assembly. They are speaking aloud, which is against the Rules. They are also interrupting members who are at the podium without raising a point of order. Could you please ask the ANC Whips to control their members?
Hon Kilian, I didn't give you the floor. I asked you to sit down. That is not a point of order. I request members of this House to behave themselves, please. This is an important debate. It is a national issue. There are very important issues that are being discussed here, and we would appreciate some kind of order. Thank you.
Hon House Chairperson, after carefully studying and considering the annual performance plan of the Department of Mineral Resources and the report of the Portfolio Committee on Mineral Resources on the strategic plan and Budget Vote 32, the IFP supports this Budget Vote. [Applause.]
This Budget Vote takes place after the recent tragic loss of life at the Lonmin Marikana mines, where we witnessed unprecedented police brutality in a free and democratic South Africa. The IFP, once again, offers its most heartfelt and sincere condolences to the families and friends who lost their loved ones during that dark moment in our history as a country in general and the mining industry in particular.
On 16 August 2012, we were reminded that mining is an important feature of the economic and social fabric of our country. Whilst the issues emanating from Marikana relate to labour matters, the Department of Mineral Resources has a direct responsibility to ensure that all labour matters and the wellbeing of workers within its scope are better handled because mines are the backbone of our economic trajectory, with mining contributing 18,7% to