Department of Mineral Resources: Five year strategic plan discussions

This premium content has been made freely available

Mineral Resources and Energy

16 March 2010
Chairperson: Mr F Gona (ANC)
Share this page:

Meeting Summary

The Committee continued its discussion on the Five Year Strategic Plan of the Department of Mineral Resources, which had been presented at an earlier meeting. Members of the Committee expressed concerns about a media report that African Exploration Mining and Finance Company had announced an intention to mine very valuable vineyards, but were re assured that the Department knew nothing about such intentions and was not prepared to sanction any such non existent applications. Further questions were asked about the licences and approvals actually granted by the Department, not the intended or theoretical applications made by interested parties for their own interests. Members asked for reassurance on the question of the State moratorium on the disposal of mining rights, and the President’s announcements in regard to the proposals to nationalise mineral resources. Members expressed concern about agents who were acting in an intermediary capacity between the granters and grantees of licences, and called for their identification, whether the proposals were in accord with the principles of the Mining Rights Charter, clarification on problems with rising water levels, and liability for environmental damage. The numbers of rights granted per region were set out, but Members called for further details on the persons to whom these rights were granted, as well as their status and whether they were small enterprises, as these figures would reveal whether there was any real transformation. The Chairperson commented that the control over some industries by certain large companies meant that previously disadvantaged individuals were never getting a chance to compete. The Department answered questions around health and safety issues, but there was considerable dissatisfaction by members around the failure of women to disclose their pregnancy or other health conditions, which they attributed to the fact that women were still being paid less and treated unequally from their male counterparts, and the Department was urged to deal proactively with the situation.  
There was a downward trend in fatalities. Members were uncertain whether the facts presented around applications reflected the true position, as it might transpire that applications were withdrawn or substituted.
Members expressed their concern that the Department of Mineral Resources and the Department of Environmental Affairs often seemed to be working at cross purposes, and called for the Ministers to meet to establish protocols for cooperation and try to resolve conflicts in legislative provisions. Members wondered if the targets that the Department was setting were not artificially low, but noted that discrepancies were being corrected through the Annual Report. Members also asked for investigations into the conversion of old order to new order mining rights, questioned whether companies were acting in the spirit of the new rights, and discussed the monitoring of compliance with the Mining Rights Charter. The Department advised of its intention to amend four pieces of legislation, and although Members were not entirely happy with the delays, it was pointed out that the Constitutional compliance was being thoroughly checked.

Meeting report

Chairperson’s opening remarks
The Chairperson reminded the Committee Members that at a previous meeting the Committee had been discussing the Department’s plan. It was necessary to deal with everything quite thoroughly, in order to exercise effective oversight.

The Chairperson said that he was surprised by weekend media reports, especially in the Sunday Times, that there were developments in mining, especially in Kwa Zulu Natal (KZN), where African Exploration mining and Finance Company (AEMFC) had announced an intention to mine very valuable vineyards, which had not been reported on at the Committee’s previous meeting. He noted that this posed three issues: firstly, the stake owned by the State in the country’s mining resources, and the disposal of State resources, particularly in view of the Cabinet decision to place a moratorium on the disposal of State mineral resources. He would like to know the basis on which such disposals were taking place. Secondly, there was a question to what extent the communities concerned were to benefit from mining activities. Some reports, whose truth was not established, said that the communities concerned were to receive as little as 5% of the turn over benefit from the mining activities. Although this was a choice of the industry, he felt a difficult situation was building. Thirdly, in Natal, ownership of some resources was foreign, and the activities did not reflect participation and benefit to the immediate communities, or the wider South African nation.

Department of Mineral Resources (DMR): issues arising from the Strategic Plan
Mr Mosa Mabuza, Acting Deputy Director General: Mineral Policy and Promotion: Department of Mineral Resources, assured the Members that there was indeed not only a moratorium on the disposal by the State of mining assets, but further that there was a Cabinet request for an audit of such resources, which was still to be completed although it was at an advanced stage. This audit followed from the intention that no more than 30 % of the mineral resources were to be disposed of, and that any exceptions to this rule were to be approved by Cabinet. To his knowledge there were not even any applications for exceptions pending.

Mr V Magagula (ANC) expressed concern that the Committee members did not wish to know what was in or before Cabinet, as that was not pertinent to the Committee at this stage. The Committee wished to know who were the persons acting as intermediaries between the holders of such mineral rights and the Department, if applications for exceptions were to be made. Such intermediary agents must be identified, and their proposed activities explained to the Members who, after all, had to report back to the various communities. He cautioned that the reports in the Media had an impact, internationally, nationally and upon the communities concerned.

Mr H Schmidt (DA) referred to an issue of the previous week in which “intentions” were announced. Although this was a provincial matter, the same names as mentioned before had cropped up in connection with the announcements. It seemed that some individuals were more favoured than others, to the detriment of the national body corporate, on the macro and the micro levels. He wondered whether Cabinet decisions were held to be binding at provincial level and whether a particular provincial entity was independent of any control. Without naming names he asked whether the requirements of the Department of Mineral Resources (the Department, or DMR) and the Cabinet extended nationally, saying that if this was not so, it was inexcusable.

Mr P Dexter (COPE) added that it was difficult to accept all that appeared in the media as being accurate. He asked that the Committee Members be advised of all relevant facts and information, so as to be able to make an informed decision as to whether the proposals were in accord with the principles of the Mining Rights Charter.

Mr M Sonto (ANC) stated that he personally was not happy with the situation. There was scant information and facts, but it seemed that there was an intention to dispose of mining rights, contrary to the Mining Rights Charter. The public had already questioned him about the matter, and he was unable to answer. He urged that the Department must abide by its stated aims and the Mining Rights Charter.

Mr E Lucas (IFP) stated that he had an invitation to attend a meeting on 30 and 31 March, directed to the question of nationalising South Africa’s mines and mineral resources, and he stated that it seemed that a decision had already been taken. He stated that the decision was to retain all mining rights for the State, but that it seemed that there were so many exceptions, and that disposal of mining rights was a problem.

Ms N Mathibela (ANC) wanted to know how the Department saw its working relationship with the Committee.

The Chairperson said that he felt that all the concerns as expressed by the Members should be answered by the Departmental representatives present.

Mr Nthokozisi Zondi, Chief Inspector of Mines, DMR, stated that he had taken note of all the concerns expressed and wherever possible, the answers would be provided at this meeting but should that not be possible, the matters would be researched and answers provided in due course. However, he wished to clarify the situation prevailing at present. Cabinet had indeed determined that a moratorium on the disposal of State mining resources applies, unless there was an application in terms of Section 11 of the Act. He wished to assure members that notwithstanding what had appeared in the media, there were no current applications in terms of Section 11 for exemptions. Further, with regard to proposed nationalisation of the mines he personally felt that the President had expressed, firmly and succinctly, that there was no intention, at present, to nationalise the mines. However, the Constitution provided for freedom of speech. Just as there were proponents for the death penalty, although it was not State policy, so too there were proponents for the nationalisation of mines and mineral resources, and they were free to advance their cause, but this did not mean that it would become State policy. He felt that he was not in a position to pre-empt the decision takers in Government as regards Government policy.

Mr Mabuza said that he felt that Mr Zondi had clarified the position.

The Chairperson added that he felt that it was only fair that the provincial entity mentioned by Mr Schmidt should be summoned to appear before the Committee, and lay before Members the source of their information, their contacts and the moves to favour them. Even if this was only a provincial entity he felt that the national Parliament had oversight responsibilities.

On a point of clarification he added that in terms of the Mining Rights Charter (the Charter) no party would be favoured above any other, as the Charter demanded equality of treatment and equity, unless it concerned advancing previously disadvantaged communities or individuals. Lastly, he agreed that the Constitution provided for freedom of speech and that thought and talk about a change was not an indication of Government Policy. He wished to ally the fears of Mr Schmidt but respected his desire for the situation to be clarified. He noted that Mr Schmidt’s questions about water levels and the Department wishing to relocate would not be able to be answered at that meeting.

Mr Schmidt advised that he had received further telephone calls, and had e-mailed some messages through, which apparently had not reached the recipients. He was arranging that these be printed out and hand-delivered to the Department’s representatives at the meeting today.

Ms D Mathebe (ANC) said that she was not sure of the exact location of the problem was, other than that it was in Gauteng, but she too had been advised of rising water levels.

The Chairperson stated that he felt enough time had been allocated to important matters not on the agenda and he proposed that the Department should continue with its presentation.

Mr Zondi said that he had noted the problems raised and would be reverting to them in due course.

He then referred to questions referred to the Department by the Committee.

He noted that the first question posed by Members involved both mining and labour relations regulations covering women working underground. It would be examined from both aspects, after research and compilation of the relevant facts.

Secondly, with regard to the liability for environmental damage, the holder of the rights from which the damage eventuated was fully liable for all damage and consequent damage, even liability for downstream damages, which would be assessed proportionally. However, incontrovertible proof was required.

With regard to the third question, he said that DMR was responsible for inspections in Gauteng, and it was not a provincial responsibility.

The fourth question asked for the number of rights granted, per region. With effect from 1 Mary 2004, to date, the Department had granted the following rights:

Eastern Cape: 830
Free State: 1 528
Gauteng: 1 119
KZN: 1 574
Limpopo: 4 393
Mpumalanga: 4 700
Northern Cape, Springbok sub office: 842 and Kimberley sub office: 3 433
North West: 4 509
Petro SA: 196
Western Cape: 1 096

Mr E Mtshale (ANC) asked how many such rights were granted to Parliament, but the Chief Inspector replied that he did not understand this question.

Mr Schmidt asked for such figures to be provided him in written form.

Mr Oberholzer, Chief Director: Mineral Regulation, DMR, said that at that meeting he did not have a deeper breakdown other than the provincial figures, and could not say how many were of one category and how any of another, nor how many were re-issues, and how many had been granted to Small, Medium and Micro Enterprises (SMMEs) or previously disadvantaged individuals (PDIs), but would provide these breakdowns would be available in due course.

Mr Sonto particularly asked for a breakdown between the numbers of rights granted to previously advantaged and previously disadvantaged individuals. He said that he wished to see which sections were benefiting.

Mr Oberholzer undertook to provide the statistics.

The Chairperson agreed that these figures would reveal whether any transformation was being achieved. Personally, he was concerned about foreign ownership, and he wondered if the figures would confirm suspicions that much of South Africa’s mineral resources were actually foreign owned, and that South African companies were sub contracting and bearing the liability, while the foreign owners took the main advantage. This kind of situation affected South African sovereignty.

Mr Schmidt said that for there to be an actual and relevant debate the exact figures were required, so that similar facts were being compared, and there was no reliance on hearsay. Once the facts were produced it would be possible to ascertain or determine who was benefiting, and to what extent. He added that there was talk of 24 000 licences applications, and he wished to have details and to know to what extent the communities upon the ground were benefiting, rather than benefits to some unknown agent.

Mr Magagula stated that it seemed some applicants or beneficiaries were Members of Parliament, who nonetheless were refusing to comply with disclosure and transparency requirements.

The Chairperson asked the Department to operate with as much transparency as possible in disclosing details of applicants. He added that no one should be able to shelter behind the spurious defence of privilege, and so he asked for identifiable statistics.

Mr Zondi continued to deal with health and safety issues. He noted that in order to advance health and safety in the mines the major players had established Adult Basic Education and Training (ABET) programmes, which were using English as the vehicle for literacy and numeracy, thereby phasing out the use of Fanagolo.

Mr Zondi said that currently there were 36 posts of health inspectors, four in each province.
These 36 Health Inspectors were assisted by 11 assistants, making a total number of 47. He added that the President had made health in the mines a priority and currently there were 65 inspections in terms of Section 64 under way. A Section 64 inspection into health was one where there was immediate danger to somebody’s health. A Section 65 inspection occurred where there was no immediate danger to health but the situation was such as to warrant inspection. He was pleased to announce that there was effective liaison with the National Prosecuting Authority (NPA), which had undertaken to prioritise the necessary prosecutions in this regard. On successful conviction a transgressor was liable to a fine of R1 million.

Mr Zondi said that with regard to the question of pregnant women working underground, there were difficulties. In terms of the Act, the onus lay on the employer, but in practice the women concerned lied about the state of their pregnancies, their medical conditions and their ability to perform the work required. This often led to them sustaining injuries to themselves or their babies; although it was their own contributory negligence that had aggravated the situation, the employers were held liable. Facts were being collated and in due course a picture would be established and presented to Parliament.

With regard to fatalities he was pleased to be able to report a steady downward trend. There had been 166 fatalities in 2009, as opposed to 171 in 2008. This year there had been 24 fatalities to date, compared with 37 in the same period for 2009. The decrease was 35%.

Mr Sonto asked for safety plans and details of compliance with such plans, and hoped that the situation around fatalities would be monitored to see that it was working.

Ms J Ngele (ANC) expressed her displeasure that there was no equality between men and women. The women underground were paid less than the men, for doing the same work, and that was the reason why the women were forced to lie about their ability to work, in order to earn as much as possible before the birth of their babies, and ensure that they did not lose their jobs. If women were treated equally there would not be the necessity for them to resort to such machinations.

Mr Zondi stated that a database was being established, and a profile developed to assist the mine owners and the miners themselves. He added that women underground miners who were pregnant were a new phenomenon, and everyone was on a learning curve, but the situation was being monitored. He added that there were human rights, labour relations and Mining Regulations issues, all of which had to be considered and brought into line.

Mr Schmidt summarised that the main issue was to hear what the targets were, and he said that there was still not certainty about the true position. The situation was unclear, because an MEC would announce the withdrawal of an application, whilst simultaneously another report would be received that the application had not been withdrawn. He added that in the face of so many mixed signals it was difficult to establish any position, let alone the true position.

Mr Zondi concurred with Mr Schmidt about the uncertainty.

Mr Mabuza stated that the difficulty was sometimes that an application was made, and whilst the assessment of the application was under way, the application might be so-called “withdrawn”, whilst someone else, on behalf of the applicant, might stated that it had not been withdrawn, but substituted. This incurred wasted effort.

Ms Ngele suggested that such instances be taken out of consideration.

Mr Zondi stated that the Department was endeavouring to take a holistic view of every application and its position in the world environment.

Mr Zondi noted that tuberculosis (TB) frequently went hand in hand with HIV/AIDS situations and there was no compulsion to disclose HIV/AIDS and so both programmes had to be undertaken. He added that living conditions in the hostels exacerbated the incidence or propensity to fall victim to TB and / or HIV AIDS and these conditions, too, were being looked into.

Mr Schmidt pointed out that the Department of Mineral Resources and the Department of Environmental Affairs often seemed to be working at cross purposes, and he asked whether the Ministers could be persuaded to get together for a high level conference, at which protocols for co-operation could be established and implemented, to forestall conflicting interpretations and requirements in different time frames.

The Chairperson reflected that the Department seemed to set itself low targets in various categories and then exceed them handsomely. He wondered whether this did not present a false picture of current prevailing conditions. He added that the allocation of finances seemed to him to have similar disproportionate allocations, which, again, resulted in the situation looking very good at the end of the financial year. He referred to pages 26 and 34 of the documentation handed out at previous meetings. He thought that the question of job creation received cursory treatment and he suspected it might be misleading.

Mr Zondi stated he had taken note of the concerns and expected to have a compilation of statistics by the end of April 2010 for the Committee. Addressing the difference between targets and achievements, he stated that complaints in terms of Sections 54 and 55 were provided for in the Department’s year plan. However, in practice, there might be no complaints in terms of these sections. On the other hand there might be a thousand-fold increase in the numbers projected. It was extremely difficult to predict. The Department was endeavouring to establish a profile of what might be expected, rather than making a projection. He apologised if the figures might seem misleading, but noted that his report had followed precedent. Everything was attended to on an individual basis.

The Acting Chief Financial Officer (CFO), DMR, added that such precautions were taken with the financial allocation as well, because frequently there was no possible way of determining, in advance, the likely calls upon the Department by stakeholders.

The Chairperson suggested that any such discrepancies were corrected in the Annual Report and the reports by the Auditor-General. He accepted the point.

The Acting CFO said that the State Diamond Traders Association was intend to fund itself but the world wide recession and reduction in the sale of diamonds had impacted severely upon this Association, which had to be assisted.

The Chairperson asked whether the Department did not see the challenges created for inter action with SCOPA

The Acting CFO said that there was more actual concern about meeting the requirements of the Auditor-General.

The Chairperson said that it seemed to him that there were difficulties in complying with the administrative requirements by two State departments, and he believed, more than ever, that a Ministerial meeting should be held to establish the parameters of action, and so that a Protocol could be issued for compliance by all concerned. He added that he saw the necessity to tighten up so that there was compliance by all bodies.

Ms Mathebe stated that she saw that there were three main issues. The first was how many SMME projects the Department had undertaken, cooperated with, or sponsored, the second related to how many women with HIV/AIDS were employed by the mines under the aegis of the Department , and the third related to the number of job opportunities created by the Department.

Mr Sonto asked whether the Department was aware of the fact that pregnant women were endangering themselves and their babies by undertaking work not suited to their medical condition, and what database in this regard was being established by the Department.

Mr Zondi said that at this stage very little provision was being made for a database, because that was not the purpose of the exercise, but that such information would appear in the Annual Report at the appropriate time.

Mr Zondi added that the Department’s beneficiation strategy, although not mentioned at this stage, would also appear in the Annual Report.

Ms Ngele stated that pregnancy and HIV/AIDS conditions could be easily established by clinics.

The Chairperson reminded Ms Ngele that there were Constitutional imperatives against the disclosure of the medical conditions of persons, without such persons’ concurrence.

Ms Mathebe repeated that women in mining felt vulnerable at even being involved in mining but were concerned about losing their jobs if their physical condition was not up to scratch and so naturally concealed their conditions, even to the detriment of themselves and their unborn babes.

The Chief Inspector of Mines stated that the concerns had been noted and a strategy would be developed.

The Chairperson expressed concern about the conversion of the old order mining right to the new order mining rights, and said that an investigation into this might well reveal untoward and unacceptable practices occurring. He questioned whether companies were acting in the spirit of the new mining rights, or were intending to defeat them. He pointed out that certain companies were synonymous with certain industries, such as diamonds and De Beers, and there seemed to him to be little room for the participation in such industries of PDIs. Alexkor had a similar situation with regard to unused rights. The downside was that Springbok, and many similar towns, were becoming ghost towns, which adversely affected the country. He urged that the “use it, or lose it” principle should apply, so that there was room for the participation by PDIs.

The Chairperson referred to page 10 of the Annual Report, relating to monitoring of compliance activities and said that he would require greater detail and more clarification than appeared on this page.

Mr Zondi replied that the question of the conversion of old order rights to new order rights was receiving attention and companies with old rights were being made aware of the provisions of the Charter. He cautioned that the “Italian litigation” had checked the rush to enforce the conversion process, and as a result the outcome was awaited with some caution. He added that there were 1 019 companies not fully compliant with the provisions of the Charter. However, the Charter contained no provisions around compulsion to comply. This was a technical difficulty in the various pieces of legislation, which was receiving attention and which would be finalised in due course.

Mr Oberholzer explained that the larger players in the industry were being targeted, as this tended to have the biggest impact. In addition, there were no simple and one-off compliance visits. Sometimes, depending upon the nature of the operation, repetitive visits would be required in order to investigate compliance with perhaps only one aspect of the operation. The site inspections revealed the complexity of the compliance factor, which was perhaps not immediately obvious in the office. He added that initially there had been a focus on the administration of the legislation and Charter, and he suggested that the Department might be seen as having built capacity. Now that this had been done, the emphasis was swinging over to the regulatory aspects.

Mr Zondi explained that there were four pieces of legislation being considered for amendment – namely dealing with Mine Health and Safety, the Council for Geoscience, an amendment to the Mineral and Petroleum Development Resources legislation and another in relation to the diamond mining industry. The first was at the most advanced stage, but certain aspects around the Constitutionality, as well as the impact of the Bill, were still being measured. He noted that it was necessary to check every Bill against ongoing decisions of the Constitutional Court and so the drafting took place in a dynamic, not a static, backdrop.

The Chairperson expressed his concern at such a situation.

Mr Schmidt pointed out that there was a distinction made in relation to mineral and petroleum development resources, and environmental impact assessments, and wondered what could be done to resolve the discrepancies in this situation.

Mr Zondi stated that consultations between the two departments were ongoing, as the challenges had been identified, and attempts to reconcile the disparities were being made.

Mr Lucas was pleased that the Mineral and Petroleum Resources Development Act was to be amended.

The Chairperson expressed his unhappiness at the fact that stakeholders were able to approach the President, even at a late stage, with new submissions, which led to withdrawal of or delay in presenting the intended legislation in order to consider such submissions. He went so far as to state that he viewed this as contempt of Parliament. He believed that no legislation should be withdrawn except on Constitutional grounds.

Mr Zondi responded that the legislative process was very difficult and that the Constitution was widely interpreted and all embracing. For this reason, it was better to err on the side of caution than proceed with legislation that could be rejected.

Mr Lucas stated that the Members of the Committee and the wider public had a right to express their disagreement or concerns with proposed legislation, even though there were pressures on the Committee to expedite intended legislation. He felt that the Committee should do its work properly, even if this meant doing it slowly.

Mr Schmidt pointed out that in the final run up to promulgating legislation it was not unknown for one Bill to be signed in the Presidency and for another Bill, which was necessary for implementation of the first Bill, not to be signed. This led to problems between departments. He wondered whether there could not be greater co-ordination and how this could be brought about.

The Chairperson suggested a meeting between the Ministers concerned to straighten out any problems in advance.

Mr Mtshale said that the Committee should not wait for such problems to come to the Committee but that the Committee should actively seek out and resolve such problems.

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: