Mining Committee Report on 5 State-Owned Enterprises (SOEs) Annual Reports 2008/09

This premium content has been made freely available

Mineral Resources and Energy

23 February 2010
Chairperson: Mr F Gona (ANC)
Share this page:

Meeting Summary

The Committee met to discuss its own draft reports on the Annual Reports of the five State-owned enterprises.

The first report related to the Council for Geoscience. Members agreed that the entity was well managed and the work they were doing was good. In particular, it was doing significant research into preventing fall-of-ground, which was causing fatalities in mines, whereby it was able to predict events before they occurred and take the necessary safety steps. However, funding had been identified as a problem. The Committee noted that in a subsequent engagement with another entity a possible source of research funding had been identified, and suggested that the Council should be put in touch with the relevant sources. The Committee also took note of the fact that some mine accidents occurred through incorrect methods. The Committee adopted its report.

The Committee’s report on the Mine Health and Safety Council was tabled. Members felt that more work could be done by this entity to decrease the number of fatalities in the industry. Many of the fatalities were due to negligence and a lack of proper skill. The Committee decided to look deeper into the situation. The Committee also noted that there was lack of capacity, to which there were two possible approaches, and that a further report was needed from the entity on the steps taken to try to address this through amendments to the relevant legislation. The Committee agreed that it would need to get further information on the prevalence of some diseases in single-sex hostels, and what was done to address the problems around proving that disease was due to working on the mines. The report was adopted but noted that further information needed to be made available.

The Committee discussed the position of Mintek, and agreed that it was well managed, and was one of the leading research entities. Small scale mining was another area that would lead to transformation of the industry. Members noted that Mintek perhaps also had a role to play in beneficiation, which was an important issue in the whole industry, although it was one that did not seem to be clearly understood by everyone, with the responsibilities often being shifted from one entity to another. Mintek itself was not responsible for promoting skills that would allow for beneficiation and in this regard the Committee agreed to raise the issues with the Department. It was noted that since beneficiation had not been approved at Cabinet level, the Committee may have to influence the process. The Committee report on this entity was adopted, but further discussions would have to take place around beneficiation.

The Committee noted that the Auditor-General had reported on non-compliance with the Public Finance Management Act by the State Diamond Trader, and that beneficiation was an issue also with this body. In addition the entity had raised problems with its own legislation, and the Committee would need to find out whether the Department was proposing any amendments. It was agreed that further information was still needed before the Report was complete.

The Committee’s report on the South African Diamonds and Precious Metals Regulator was tabled. Members felt that there was a need to meet with the entity again, as there was general lack of accountability, and there was a need to find out what was being done in respect of the Auditor-General’s report. There were also concerns about an irregular tender. The Committee resolved that a letter should be sent to the Minister to request her intervention. The report was not adopted.

Meeting report

Committee Report on Annual Reports for 2008/09 of 5 State-Owned Enterprises (SOEs):
Council for Geo-science Annual Report 2008/09

The Chairperson explained that the purpose of the meeting was to deal with the five annual reports that were tabled by the State-Owned enterprises reporting to the Ministry of Mining.

He reminded Members that the Council for Geo-science had given a presentation to the Committee on its work, and included a briefing on the work that was intended to be done in future. The Committee, in looking at the Annual report for this entity, should also consider whether the work they were doing or planned on doing was contributing to the direction the country was currently taking.
Mr P Dexter (COPE) said that the report the Committee had been given showed that the entity was well governed and that it was doing good work. The only issue he had was the question of the sealing of the unsafe manholes and the issue of the entrances which the illegal miners were using.
The Chairperson said that he agreed with Honourable Dexter that the entity was doing well. The Council for Geoscience was busy doing research work on finding workable solutions to deal decisively with the continuous fall-of-ground occurrences in the mines, which accounted for at least more than 41% of fatalities in the mines. The fall-of-ground, which was a result of gravity induced tremors, was an old issue in the industry ever since mining started in the 18th century. The Council for Geo-science had indicated that it was doing investigations and also drawing on international experience to enable it to develop technology that would enable detection of tremors early before they actually happened. This would enable warning signals to be sent to the workforce underground, and for appropriate action to be taken. The Committee needed to pay more attention to that as soon as possible, which would then decrease fatality rates.

The Chairperson added that the main problem that the Council for Geoscience had raised was lack of funding for that research work, and it had informed the Committee that R20 million was needed for it to be able to complete that research work. The Council was experiencing difficulty in getting the necessary funds. The Committee made an undertaking to pay closer attention to the issue and assist them to move forward with the research. However, when the Committee had heard the presentations of the Mine Health and Safety Council, it had come to light that another institution was also involved in research work on similar issues, but had not experienced any financial challenges. The Committee had wondered why there should be difficulty in accessing funding for such important work when the industry in which the research was needed was generating huge turnovers. Each time the Committee engaged with the Council for Geoscience, the Council had given a clear commitment to trying to find more lasting solutions to prevent fatalities in the mines. However, it appeared that the industry was being levied by the Mining Research and Advisory Council, and this could well be a source of funding for the Council for Geoscience.

The Chairperson said that he would like to resolve that issue as part of the adoption of that report. He asked that it be included that the Council for Geoscience be directed to engage with the Mine Health and Safety Council, and then report back to the Committee on the availability of funds to undertake that research work.

Mr E Lucas (IFP) said that when the Committee went to the mines, there had been investigation into rockfalls. These had been found to be partially caused by workmanship, since the senior inspector had, on arrival at the mines, prevented anyone from entering the mine. He made the point that the workmanship should be equal to the task.

Ms J Ngele (ANC) said that she agreed with the previous members. She believed that the Committee needed to get another report in the sealing of the unsafe manholes and shafts. Although it was clear that there were posters or notices warning people to stay away, she wanted to know whether these had the desired effect.

Mr C Gololo (ANC) said that he agreed with Ms Ngele that the Committee should get another report on the current situation.

The Chairperson said that the Committee would call for the necessary update reports.

In respect of the points about workmanship, he thought that the Committee needed to spend some time and seriously engage on matters of this nature, because there was a need for a paradigm shift in the industry. Some of the deaths were preventable; for example the incident at Impala was due to negligence. It was correctly pointed out that the senior supervisor took a decision to strengthen the pillars in that shaft, but then, when the shift boss (who was the main authority for that workforce) arrived hours later, he had condemned that decision and said that the first line supervisor should not have made it. He even ordered that the workers be evacuated. In the process of evacuation the ground fell and people died. This showed a problem of human error. To an extent the Committee needed to look deeper into the training the supervisors need to receive.

The Chairperson also noted that the Committee would need to investigate the production methods more deeply, and  would need to look at the types of instructions that went out, and when this happened. For instance, it was necessary to find out why it should take three hours for a shift boss to come to the work place, particularly when he knew there had been blastings at that work place. The Committee also needed to look at the best way to deal with the fall-of-ground. The gravity induced fall-of ground was necessarily related to the methods that were applied. The choice must be made, which was better- the life of a worker or the profits. The Committee needed also to address such matters with the Mine Health and Safety Council, so that a standard could be set, even if this would mean regulating the matters, in order to find lasting solutions and curtailing the fatalities.
The Chairperson also spoke to the issue of illegal mining. If those old shifts were not sealed sufficiently that was also an entry point by the illegal miners.

Mr Dexter said that the standards which the Council for Geo-science put in place for shutting of the mines was clearly not sufficient, as people were still gaining entry. The monitoring and the strengthening of the shutting of the mines needed to be reinforced.

Mr D Mathibela (ANC) said that the Council for Geo-science’s job was to look at the mines where reinforcement was needed. The duty of ensuring that mines were shut fell to the Department of Mining (the Department). During a past meeting with the Mine Health and Safety Council, it was said that there was not sufficient funding to close those ownerless mines and to do the cleaning up of those mines.

Mr Lucas said that when it was time to clean up the mines up, the owner disappeared and did not fulfil obligations. The Department was then left with the work of the mine owner. The money that the Department spent on cleaning up the mines could have been used elsewhere.
The Chairperson said that the Committee was agreed that where mines were still licensed to owners, those owners should take full responsibility. In situations where there were ownerless mines, the State should take the responsibility. The Council for Geo-science should assist in setting the standards for closing the mines, and aligning these with the monitoring mechanisms in order for them to deal with the issue.

Mr Gololo asked whether this referred to the 5 000 ownerless mines that the Minister had mentioned, where an amount of about R30 million was being allocated to each year.

The Chairperson replied that this was so. The Committee had invited the Department to brief it on the 5 000 ownerless mines and mine dumps. The Auditor General had raised serious concerns about that issue. He reminded Members that the Department was still to brief the Committee on the work being done.

The Members agreed that the Committee’s report on the Council for Geoscience was in order, and adopted it

Committee Report on Annual Report of Mine Health and Safety Council (MHSC)
Mr Lucas said that the biggest problem with MHSC was at the level of inspectorate. Something should be done about that, because if there was not enough capacity, the monitoring of mines could not be done sufficiently.

Mr Mathibela said that MHSC had many capacity challenges within the policy unit.

The Chairperson said that the MHSC Act was amended in 2008 to try to address the capacity issues, in response to a complaint from the MHSC that it was unable to complete its work due to lack of strategies to retain the requisite skills. The MHSC had indicated that it had trained more than 50 people in the inspectorate field, but, at the stage of reporting, there were only nine left. The others had been poached away by the industry. When the Committee asked the reason, the MHSC indicated that the remuneration levels offered were simply not commensurate with the work. The Amendment Act  gave a mandate to establish an inspectorate as a juristic entity, which meant that it would be regulated in terms of remuneration and conditions of employment outside of the public service arrangement. The Committee should find out whether the amendments had been implemented and the necessary conditions put in place to try to address the problem.

Mr Dexter agreed with the Chairperson. He made the point that there had, however, also been under spending. The point had been made, in relation to the turnover of staff, that there were two options. The first was to look at amending the remuneration, so that people could be paid the type of salary packages that encouraged them to stay with the MHSC. The second was to accept that there would be a free flow of skills, in which case the MHSC should be seen as one way to develop skills in the broader industry, by people gaining experience after graduation at the MHSC for a few years, before taking those skills into the broader industry.

Ms Mathibela said that she was not satisfied with MHSC. For many years there had been shortage of capacity cited, but each year there was under spending. Each year there were also requests to increase the budget, but even when this was done, nothing had changed.

The Chairperson agreed that this was an area where attention must be paid to the matter. Another area of concern related to occupational diseases.

Mr Lucas said that two of the major hazards were TB and AIDS. People would often only find out, after leaving the mines, that they were ill and then had the problem of proving that their illness had started at the time of or as a result of working in the mine. The Committee needed to find some way to address the uncertainty.

Ms Mathibela said that the MHSC should indicate to members how many people were living in single sex hostels, because that also posed a hazard in terms of infectious diseases.

The Chairperson agreed that sufficient time must be set aside to deal with the issues. The Committee must investigate what preventative measures the industry was taking in regard to infectious diseases.
With regard to the single sex hostels, it was an indictment that these were still being discussed, 16 years into the new democratic dispensation, and they should not be tolerated at all.

The Chairperson asked if Members wished to adopt the report.

Mr Dexter suggested that it be adopted, subject to the changes that had been proposed and noting of the issues to be raised.

The report was adopted.

Committee Report on Mintek Annual Report
Mr Dexter said that the only issue he had was that Mintek had reported a slow-down in the numbers of samples analysed. However, Mintek had said that this was due to a general slow down of work in the industry, and he did not think that this was something that could be ascribed to Mintek’s own actions. However, this was a worrying indicator in the industry and he was concerned of the impact that it had on the economic clusters. Other than that, he felt that Mintek was doing well and had met all its targets, particularly from its research and development side.

The Chairperson agreed that Mintek was managing itself well. He expected that it would be moving to a beneficiation industry, as the downstream mineral resources beneficiation was an industry that it would be desirable to build and make flourish in South Africa. The initial intention was for all mineral commodities to have been beneficiated locally. The Committee thought that it would have been possible to acquire the necessary skills for that kind of industry. From time to time there would be reports that, for instance, South Africa was not ready to cut and polish small stones due to lack of skill. However, countries that in other ways had limited skills had taken the initiative to develop some skills, including cutting and polishing, whereas South Africa, who already had the industry, with the  potential to create quite a huge number of jobs on a sustainable basis, was not developing the skills. Mintek would play a pivotal role in also anticipating the work that could be done in establishing that industry, and in looking at what skills would be required for the country and how long it would take to build up those skills.

Mr Dexter said that Mintek was doing a lot of research and that it was one of the leading entities in the world. It was not Mintek’s job to develop technology so that it could exploit it, and this question about promotion of skills was one that should be put to the Department.

Mr Lucas said that he agreed with that completely. He said the problem was the lack of understanding when it came to beneficiation from the mining houses. The whole sector needed to look at beneficiation and gain a common understanding of what was happening. There was a view prior to 1994 that it was a good idea for the government then in place to export all the commodities. He said that South Africa had a long way to go to catch up with the rest of the world. The longer South Africa waited to start building its skill and technology, the more expensive it was going to get.

The Chairperson said that the Committee could adopt the report in the meantime, but that there was a need for a more in-depth engagement. Further information needed to be obtained, and if need be the Committee had to influence the direction that the entity should take, which included the amendments to their mandates. This was because in the final result the Committee wanted Mintek to achieve the necessary results to make a significant contribution in the development of the country.

The Chairperson added that in regard to the comment that there was a need to assist the Department and the industry on small scale mining, which was indeed a crucial and key area which would enable realisation of a transformation in the industry. However, the question arose how else this could be done if there was not some approach that would assist new entrants to come into the industry, and into the small-scale mining arena. The small scale mining industry was going to pay a pivotal role in job creation in the country.

With regard to beneficiation, the problem might have been that the beneficiation strategy itself was still not yet approved at Cabinet level, which meant that it was the responsibility of the Committee to influence that process.

Members agreed to adopt the Committee’s Report, but noted that further information needed to be obtained from the entity.

Committee’s report on the State Diamond Trader Annual Report
Ms F Bikani (ANC), who had only recently joined the Committee, asked whether the Committee had had any previous engagement with this entity
The Chairperson said that the Committee had had previous engagements with the entity.

Mr Dexter said that he had two issues with the entity. Firstly, the Auditor-General had reported that the entity had not complied with Section 51(1)(a)(i) of the Public Finance Management Act (PFMA), and this concerned internal controls. This must be highlighted, so that the Committee could refer back to the issue. The second matter, perhaps more importantly, had to do with beneficiation. He was concerned that beneficiation was a matter that could not be isolated squarely as one issue and dealt with in a comprehensive way; it was scattered all over and the responsibility for it was passed from one entity to another, so that nobody was taking ownership of it. That issue also needed to receive further attention.

The Chairperson said that even in respect of legislation, this entity had mentioned that there were challenges. If the Department did not table the amendments that were required, it would be incumbent on the Committee to take those initiatives. A letter needed to be written to the parties. He thought that the Report should not be adopted as further engagement was needed.

Members agreed and the adoption of this report was postponed.

Committee Report on South African Diamonds and Precious Metals Regulator’s Annual Report
Ms Bikani expressed her concern that the boards of the State-Owned enterprises were operating too freely, and there was not sufficient accountability on performance. She felt that the Committee must meet with this entity again, to discuss what it had been doing in response to the report of the Auditor-General. 

The Chairperson said that the entity had previously responded to questions which the Committee had asked, but the Committee felt that the responses fell short, and also wanted to know what had been done between the last meeting to date. He mentioned that the date for the tender was approaching, but this did not alter the fact that the tender was issued irregularly, which the entity admitted. He thought that the Minister should be asked to act, and that a letter be sent to her asking that she take action in relation to those areas where the Committee did not feel a good enough response had been given.

Members agreed with this suggestion, and also agreed that the report would not be adopted.

The meeting was adjourned. 


  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: