The Council for Geoscience reported it had stabilised its expenditure in 2010/11 (a surplus of R15 269 million) after experiencing operational losses of R22 million and reduced commercial projects and revenue during 2009/10. The government grant for 2011/12 (R137 million) was insufficient to address RSA geoscience research needs. However, the Water Ingress grant of R16.9 million had been an exciting injection of funds towards research of mine-related environmental issues.
The short term strategy was to improve relations with the Department of Mineral Resources; develop strategic alliances with the Departments of Science & Technology, Water Affairs, Environmental Affairs and Eskom; market CGS strategically; improve on invoicing and collections according to the budget; and identify where costs could be cut. The long term strategy was to increase revenue inflows and profitability; implement the Geoscience Amendment Act of 2010; contribute to the RSA economy; and address stakeholder needs. Receiving funding for ageing equipment continued to be a challenge. As a result of implementation of cost-cutting measures, it was a challenge to retain highly skilled scientists. CGS was currently investing in aggressive training of young scientists and endeavoring to attract internationally recognised scientists.
Under the leadership of the Department of Science and Technology, CGS was developing a business case to implement an integrated offshore mapping programme. RSA had submitted a claim for an extended continental shelf and was currently engaging on defining borderlines between itself and
Members asked if CGS had the instruments to alert the general public should an earthquake and/or tsunami be detected; how the projected seismic activity could add safety for miners and mining communities; what could be done about exploration for small scale mining; and how the extension of RSA’s offshore boundary would affect other countries’ boundaries.
Members also asked if there were resources to ensure viable fracking; whether CGS work on sequestration of carbon dioxide would conflict with work on shale gas and fracking; for more information on the Comprehensive Nuclear Test Ban Treaty; and whether CGS planned for nuclear waste storage (hazardous radio-active material) when it provided licences for potential nuclear sites for Eskom.
Members further asked how the current budget, which expected a surplus, would assist with the scarce skills strategy and bursaries for training scientists; why there was a decline in commercial projects and revenues; and if the cost-cutting measures were instructed by National Treasury; and if CGS was undertaking a target of only 5 maps and publications for 2011/12 because of the availability of funding. They also asked how CGS was attempting to attract female researchers to the geoscience profession.
The Council for Mineral Technology and Research (Mintek) then presented its Strategic Plan 2011/12. The Department of Mineral Resources had allocated Mintek R167 million and a further R30-million grant to rehabilitate derelict and ownerless mines. Mintek also sourced funding from the EU and was the only non-EU member of the High Level Group (HLG) (European Technology Platform on Sustainable Mineral Resources).
The four main strategic objectives using the government grant were: to research and develop efficient mineral processing technologies and value added products and services; to research and develop green technologies and processes to mitigate the impact of mineral development on the environment; to promote the mineral economies of rural and marginalised communities through technical assistance and skills development; to build world class R&D excellence.
An impending project for Mintek was the adaptation of the ConRoast Bay 2 platinum group metals (PGM) atomiser facility to improve on the design and make it more marketable, especially for new small companies. The cost for the adaptation would be R46 million.
The Mintek Diamond Provenance Project was a United Nations led project for Forensic Mineral
Characterisation. The aim of the project was to build a Southern African Development Community (SADC) database of gem-quality diamonds (mainly alluvials) and characterise shape, colour, surface features, breakage, infrared spectra and trace elements to analyse their origin.
Mintek developed and fully-supported SMMEs for a period of two years and training included funding for people with disabilities and marketing of products. Under DMR’s derelict and ownerless mines programme, Mintek had rehabilitated an asbestos dump in Kuruman. Ten sites were expected to be rehabilitated in the current year but the R30 million funding would not be sufficient to cover the target. Mintek hoped that it would be permitted to continue with rehabilitation in the following financial year.
Mintek was putting in place measures to increase the number of postgraduate students and to reduce staff turnover.
In the past two years, the economic meltdown had affected revenue. However, income and expenditure of 2010 broke even and in 2009 made profit of R39 million. Most expenditure was on permanent staff. Capital expenditure was mostly on laboratory equipment.
Members asked if mining houses paid a government tax for the services of MINTEK; if the atomiser could be moved to a mining site; if Mintek was Schedule 2 or 3 entity according to the Public Finance Management Act; what the procedure was for a parcel of diamonds found to be from conflict countries; if meteorite rock had any value; if MINTEK supported government’s Beneficiation Strategy; and for clarification of the role of the CSIR, CGS and Mintek in the mining value chain.
Both the CGS and Mintek 2011 Strategic Plans were adopted by the Committee.
Council for Geoscience (CGS) Strategic Plan 2008/9 and 2010/11
Dr Thibedi Ramontja, CGS Chief Executive Office, explained that during the economic climate of 2009/10, commercial projects and revenue had been reduced and CGS had experienced operational losses of R22 million. CGS had subsequently stabilised its expenditure in 2010/11 (with a surplus of R15 269 million). However, the government grant for 2011/12 (R137 million) was insufficient to address
Due to the losses, management had developed short and long term strategies to turn around CGS financially in line with the challenges of the impending CGS Amendment Act. The short term strategy was to improve relations with the Department of Mineral Resources (DMR); develop strategic alliances with the Department of Science and Technology (DST), Water Affairs (DWAF), Environmental Affairs (DEA) and Eskom and market CGS strategically; improve on invoicing and collections according to the budget; and identifying where costs could be cut.
Key medium and long term strategic objectives included ensuring long term sustainability of CGS through revenue inflows and profitability; implementation of the Geoscience Amendment Act; contribution to the RSA economy and addressing stakeholder needs. ISO accreditation was expensive but was 90% complete and an important target for CGS. Another important target was to address ageing scientific equipment.
For the financial year 2011/12, CGS had identified five critical maps and publications to attract exploration investment; 20 maps and publications on other resources and thrusts; 25 rural development projects, 22 regional and African projects and five environment-related projects.
The target for large tenders (>R1 million) to generate revenue was 44. The government grant and Water Ingress Project combined was R154.4 million and contract revenue R66 million.
There was low morale in human resources as a result of implementation of cost-cutting measures and it was a challenge to retain highly skilled scientists with ten years experience or more. For two years, new staff could not be employed except for critical skills. However, the situation was currently stable and frozen positions were being re-assessed. CGS was currently investing in aggressive training of young scientists and endeavoring to attract internationally recognised scientists. The target for 2011/12 was to have 28 staff members enrolled for MSc and PhD degrees and four engineering geologists undergoing training with a resultant 55% of the scientific staff having PhD and MSc degrees. In addition to bursaries, CGS offered - together with DST and Mining Qualifications Authority (MQA) - internship programmes, as well as mentorship programmes and
RSA had been invited to submit a claim to the United Nations for consideration of an (May 2009) offshore territory - extended continental shelf - which would be a greater area than the
CGS continued to engage internationally as Secretariat of the Organisation of African Geological Surveys; with SADC – assisted with developing a geological map of SADC funded by SA; and with African-European Georesources Observation System (AEGOS) – collaboration project with
Mr C Gololo (ANC) asked if
Mr Gololo asked if CGS had the instruments to alert the general public should an earthquake and/or tsunami be detected.
Mr Gerard Graham, Executive Manager: Council for Geoscience, replied that predication of earthquakes was a global concern and was unfortunately not successful. Although RSA had only 23 stations for detection of tsunamis, the equipment was of high quality. Five stations along the coastline for tsunami detection in the Indian Ocean were linked to the National Disaster Management System in
Mr H Schmidt (DA) asked for clarity on how the projected seismic activity could add safety for miners and mining communities.
Mr Graham replied In terms of mine health and safety, where there were changes in the rock behaviour and stress on the mining environment, mine managers and miners would be alerted. The CGS Mine Health and Safety Project was a logistical and technical challenge to get the data from mines into the CGS system. CGS was also currently identifying sites for equipment of CGS and Mine Health and Safety to be on the property of the mine. Most of the equipment would come from overseas.
Most mining fatalities were as a result of rock falls and not from the event itself. Two projects on rock falls were currently running in parallel. One project involved gathering information which related fatalities to rock falls and the geological conditions around the rock falls with the result that CGS could suggest precautions under certain conditions, particularly the types of geology that the miners could expect to encounter. The second project involved analysing the historic data on rock falls at mines.
Mr Schmidt asked if there were resources to ensure viable fracking.
Dr Ramontja replied DMR had put together a task team for researching of fracking, of which CGS was participating. Research on fracking, oil and gas shale had not yet been conducted in detail at CGS but would need to be done even if it meant exploiting resources.
Mr Gololo asked what was meant by preferential procurement.
Dr Ramontja replied that it referred to BEE procurement in terms of National Treasury’s definition.
Mr E Lucas (IFP) asked what could be done about exploration for small scale mining.
Dr Ramontja replied that banks were not interested in supporting small scale miners. The DMR had a special fund for this high risk environment but it was always a challenge to fund exploration. CGS could support and train small scale miners and provide maps.
Mr Lucas asked how the extension of RSA’s offshore boundary would affect other countries’ boundaries and if there was a possibility of finding offshore crude oil.
Dr Ramontja replied that the Department of International Relations and Cooperation was finalising the boundary between RSA and
Mr Schmidt asked what grant amount CGS would be comfortable with in order to fulfill its functions.
[This question was not answered.]
Mr M Sonto (ANC) asked how the current budget, which expected a surplus, would assist with the scarce skills strategy and bursaries for training scientists.
Dr Ramontja said that CGS bursaries for part time and full time students had contributed to increased scarce skills at CGS. The challenge was that CGS had to stop funding full time students. Mentorship and the
Mr Sonto noted that in the staff profile, the number of women had decreased from 44 to 39 and why there was such disparity between males and females attracted to CGS.
Ms F Bikani (ANC) noted that women were attracted to jobs in the mining industry. She asked if CGS offered subjects to attract female researchers.
Dr Ramontja said that posts had been frozen for two years but now were ready to be filled by females. CGS was targeting young scientists and funding more females than males at University level with the aim of recruiting them. Recruiting from the private sector would cost too much. Sadly geoscientists were poached by the private sector after being trained at CGS.
Mr Schmidt questioned the income expected for the 2011/12 Water Ingress grant for acid mine drainage and what CGS’s role was in the Water Ingress Programme as the Department of Water Affairs (DWA) had become the lead Department and had also contracted services to a tunnel company, Trans-Caledon Tunnel Authority (TCTA).
Dr Ramontja replied that the R17 million from DWA was for important research around coal mining, points of pollution of water and acid mine drainage. The DMR had been funding research for acid mine drainage for seven years although in the past little had been known about acid mine drainage. CGS and DMR were concretising a plan for identifying and reducing pollution points and making recommendations to DWA. DWA itself was implementing recommendations, mostly engineering solutions, sanctioned by the Inter-Ministerial Committee and that was separately funded. It involved pumping of water in the Western, Central and Eastern basins on the
Mr Lucas commented that he did not know how CGS survived with such a small government grant. He asked how CGS planned to attract scarce skills and address ageing equipment with the available finances.
Mr Sonto asked if the funding for acid mine drainage was enough to contain the crisis and how the Committee could assist in that regard.
Dr Ramontja replied that in the previous year CGS had submitted a detailed proposal to National Treasury through DMR but unfortunately had not received funding. CGS would try again to address the issue in the current financial year. The proposal included funding for aging equipment. DST suggested addressing the need to National Treasury from a science perspective, which CGS had subsequently done.
Mr Sonto asked how much of the CGS budget was taken away addressing derelict and ownerless mines and why the responsibility was that of CGS and not of the mining companies that had left the mines in that state.
Dr Ramontja replied that CGS supported DMR in terms of research and a database just as it did with acid mine drainage.
Ms Bikani asked if CGS could elaborate on quantification and extent to which their maps were bought by mining companies, what the value was for prioritising ownership of maps to improve mining possibilities and what the cost options of maps were, considering the great cost of producing them.
Dr Ramontja said that maps were easily accessible and cost only R300. They were of great value given that they depicted geology and where minerals were situated. To produce a map cost around R1 million, which could not be recovered. It was expensive when mine’s required detailed electronic data.
Ms Bikani asked for clarification on whether CGS’s work on sequestration of carbon dioxide would conflict with work related to shale gas and fracking.
Dr Ramontja replied that CGS did identify the
Mr P Dexter (COPE) asked why there was a decline in commercial projects and revenues as this would impact on the losses and revenue for the coming year.
Dr Ramontja replied that this occurred because of the global economic decline which had affected funding for research from the EU and World Bank. However, CGS had just submitted a tender in
Mr Dexter said it seemed bizarre that CGS would cut costs when it played such a strategic role with a relatively small budget. He asked if the cut was made by National Treasury, which impacted on CGS or if CGS was targeted by National Treasury for particular cost cuts because it seemed that the money was not well spent.
Dr Ramontja replied that the decision to cut costs was internal and did not come from National Treasury.
The Chairperson asked if CGS was undertaking a target of only 5 maps and publications for 2011/12 because of the availability of funding.
Dr Ramontja replied that the reason for the target of only 5 maps was due to funding constraints.
The Chairperson asked for more information on the Comprehensive Nuclear Test Ban Treaty (CTBT) signed by President Mandela in 1996.
Mr Graham replied that the CTBT was the first comprehensive ban on nuclear testing whereby 300 to 400 testing stations across the globe would ensure that no nuclear testing, whether under the sea or on land, would go undetected. CGS would continue to perform its role in respect of provision of information on seismological and infrasound data in RSA and
The Chairperson asked whether CGS planned for nuclear waste storage (hazardous radio-active material) when it performed Probabilistic Seismic Hazard Assessments and provided licences for potential nuclear sites for Eskom.
Mr Ramontse replied that this was an issue and required government support. It was possible for CGS to perform this work.
The Committee approved the CGS strategy should be approved.
Council for Mineral Technology and Research (Mintek) Strategic Plan 2011/12
Mr Adiel Mngomezulu, CEO: Mintek, noted that DMR had allocated Mintek R167 million and a further R30-million programme to rehabilitate derelict and ownerless mines.
The four main strategic objectives using the government grant were:
▪ to research and develop efficient mineral processing technologies and value added products and services
▪ to research and develop green technologies and processes to mitigate the impact of mineral development on the environment
▪ to promote the mineral economies of rural and marginalised communities through technical assistance and skills development
▪ to build world class R&D excellence.
Each objective entailed a number of programmes containing R&D clusters. Each cluster in turn was allocated a strategic business unit with specific funding allocations. The Base Metal Cluster and research opportunities were described to give an indication on how Mintek structured its programes (see slide 9-11). The Platinum Group Metal (PGM) Cluster was also described (slide 27). Commercial projects were not included in the government grant.
The Mintek Diamond Provenance Project was a UN led project for Forensic Mineral Characterisation. The aim of the project was to build a Southern African Development Community (SADC) database of gem-quality diamonds (mainly alluvials) and characterise shape, colour, surface features, breakage, infrared spectra and trace elements to analyse their origin. Mintek had received a number of parcels for analysis from the Democratic Republic of Congo. Other organisations involved were
Mintek reduced energy usage by selective mining and pre-concentration, improved crushing and grinding, more efficient smelting and underground processing. The CommoDas and Rados sorters were instrumental in reducing the amount of rock entering the system.
Mintek sourced funding from the EU and was the only non-EU member of the High Level Group (HLG) (European Technology Platform on Sustainable Mineral Resources).
The next project for Mintek was adaptation of the ConRoast Bay 2 platinum group metals (PGM) atomiser facility to improve on the design and make it more marketable, especially for new small companies. The cost for the adaptation would be R46 million. Most of Mintek’s advanced products were gold-based products as a result of projects with gold-mining companies and included a range of biomedical, catalysis, nano and physical metallurgy products.
Mintek developed and fully-supported SMMEs for a period of two years with the expectation that 60% would be sustainable. Training included funding for people with disabilities. Under DMR’s derelict and ownerless mines programme, Mintek had rehabilitated an asbestos dump in Kuruman. Ten sites were expected to be rehabilitated in the current year but the R30 million funding would not be able to cover the target. Mintek hoped that it would be permitted to continue with rehabilitation in the next financial year.
The SVMIN Atomaer Plant was effective in treating acid nitrate but was currently not economically viable.
Mintek was putting in place measures to increase the number of postgraduate students and to reduce staff turnover.
Mintek had been established for research - not to make profit. Revenue streams were: state funds received; contracted research; products and services; and other income (see slide 42).
Since 1968, annual income, including grants and other revenue had increased exponentially. However in the past two years there had been a downturn purely due to the economic meltdown. Income and expenditure of 2010 broke even and in 2009 it made profit of R39 million.
Commercial work was commercial work for government, that is, contract research. Most expenditure was on permanent staff. Capital expenditure was mostly on laboratory equipment.
In essence, all hurdles could be addressed. In the previous year, during the economic crisis, other companies were unable to poach much and the staff turnover was 12%. Although the situation was improving, and the expected staff turnover for 2011 was 10%, young trained staff continued to leave for double the salary.
‘Younging’ of the institution was of a concern. In 2005 the average age was 46 years with an average Mintek experience of eight years. In 2011, the average age was 36.8 years but the average Mintek experience was only 6 years, meaning that the knowledge base was decreasing. Mintek experience was important. Young staff also tended to leave at a higher rate.
MINTEK had not received MTEF funding for ageing equipment from National Treasury but had used savings to upgrade parts of the collapsing campus. It would continue to address funding models and apply for funding for ageing infrastructure.
Mr Lucas asked if mining houses paid a government tax for the services of MINTEK.
Mr Sakhi Simelane, General Manager: Finance; Mintek replied that mining companies paid commercial and contract rates for work done by Mintek. Close to R200 million income came from the mining sector.
Mr Lucas asked if the atomiser could be moved to a mining site.
Mr Peter Craven, General Manager: Technology; Mintek replied that the atomiser was not mobile as it was dependent on a large furnace which drew 5 mega
Mr Gololo asked if Mintek was Schedule 2 or 3 according to the Public Finance Management Act (PFMA).
Mr Simelane replied that Mintek was a Schedule 3 company but could also approach Treasury to borrow money.
Mr Gololo asked what the procedure was for a parcel of diamonds found to be from conflict countries.
Dr. Makhapa Makhafola, General Manager: Research & Development; Mintek replied that the project was United Nations driven to determine where the diamonds came from and whether they should be bought.
Mr Gololo asked if meteorite rock had any value.
Mr Craven replied that up to 90% of debris circulating earth burned up before reaching earth. They contained metals - manganese, cobalt, iron, titanium (dense metals) - and were an important field of scientific research, but did not have sufficient mass to be of economic interest for most countries.
Mr Gololo asked if MINTEK supported government’s Beneficiation Strategy for companies such as those manufacturing jewellery.
Mr Mngomezulu replied that Mintek was contracted to do the training for SMME mines in the
Mr Schmidt asked for clarification of the role of the CSIR, CGS and Mintek in the mining value chain.
Mr Roger Paul, Mintek General Manager: Business Development, explained that Mintek’s involvement started only once the ore was above ground and went to crushing, refining and conversion to value added products. CGS was involved only in exploration and not in the mining or metallurgical processing. The CSIR had a special division devoted to deep level mining, safety and seismic events of deep level mining, as well as some of the same functions of Mintek – from concentration to value addition.
Mr Schmidt asked if Mintek was the instructed organ of state for development of the atomaer plant.
[This question was not answered.]
Mr Schmidt asked how Mintek formulated its performance target for the first year of business.
[This question was not answered.]
Ms Bikani said that DMR, Mintek and GSC were continually losing people in the industry. It appeared that there was a problem with the succession planning strategy, possibly a constitutional matter.
Mr Mngomezulu replied that young engineers tended to leave after three years because their type of work in projects stayed the same - they were looking for more action. In the following year, Mintek would rotate new recruits for one year for them to understand all divisions of the company. Mintek employed more engineers than scientists, yet scientists/metallurgists tended to stay longer than engineers.
The Chairperson concluded that funding for R&D was a priority. The Committee had raised the issue in the Budget Vote - in the context of the research opportunities and capabilities for the country and also compared to government institutions funding R&D in RSA and internationally. The Beneficiary Strategy was important for the country and the Committee would engage further to assist with ensuring that Mintek could operate its strategy optimally.
The Committee adopted Mintek’s Strategic Plan.
The meeting was adjourned.
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