Department of Mineral Resources 2012 Strategic Plan

Meeting report

Mr Nthupheni Ragimana, Chief Financial Officer (CFO) of the Department of Mineral Resources (DMR), said that the total budget for 2012/13 was R1,16 billion, an 8.8% increase. The money had been split between departmental programmes, which had received 55.8%, and state-owned enterprises (SOEs), which had received 44.2%. Under-spending was well below the 5% allowed, at 0.9%. The increased budget would cover salary increases, and R350m of the increase would be for the Council for Geoscience (CGS) and Mintek, split over the three-year Medium Term Expenditure Framework (MTEF).

The budget for the Administration Programme was less in 2012/13, owing to decentralisation, but would increase over the rest of the MTEF term because of inflationary adjustments. The Mine Health and Safety (MHS) Programme budget had increased from R137m to R175m. The Mineral Policy and Promotion (MPP) Programme would now oversee derelict mines, which had previously been the responsibility of the Mineral Regulations Programme. The MPP budget had increased from R446m to R719.7m, which included the derelict mines budget as well as the R350m allocated to CGS and Mintek.

Mr David Msiza, Deputy Director-General (DDG): Mine Health and Safety (MHS), said the Department’s objectives included the achievement of a 20% reduction in occupational fatalities, injuries and dangerous occurrences, and a 10% reduction in overexposure to silica and noise exposure limits.  It intended to carry out 8 000 inspections and 396 audits.

The MHS administered several examinations for skills training, but there was a very high failure rate.  It was reviewing the assessment process in conjunction with universities, technikons and the mining qualifications authorities. It had entered into two service level agreements with Wits University and Goldfields. The one with Wits was for training mine inspectors and the one with Goldfields was for learner inspectors to spend two years there to gain experience. This would be followed by two years at a regional office to comply with qualification requirements.

Mr Joel Raphela, DDG: Mineral Regulations, said priority had been given to applications for new mining rights to promote job creation.  In addition, an increase in compliance inspections was expected to result in an increase in job creation through the implementation of social and labour plans. The programme would emphasize sustainable resource use and the alignment of social and labour plans with the New Growth Path. Mine closures would be assessed in line with Section 43 of the Minerals and Petroleum Resource Development Act (MPRDA) and the Department would implement the transformation policies. It planned to do 1 500 environmental programme inspections.

Mr Tseko Nell, Acting DDG: Minerals Policy and Promotion, said the Department intended to promote investment in the mining sector by means of 35 publications, seven strategic partnerships and support for 67 Small Micro and Medium Enterprises (SMMEs). It was in the process of completing three value chain specific implementation plans.  It had embarked on an audit of mine dumps and tailings as part of its strategy of concurrent rehabilitation of mines, and was aiming to reduce the number of derelict and ownerless mines. The plan called for it to look at 12 mines this year. The Department would be working in conjunction with Mintek and CGS.

 It was also working with the Department of Water and the Department of Science and Technology on acid mine drainage (AMD).  It was sealing abandoned shafts. It had reviewed the MPRDA and the MHS Act, and Amendment Bills had been drafted and certified by the State law advisors. It was doing policy impact study reports and developing baselines on transformation in the industry.

Ms Patricia Gamede, DDG: Corporate Services, said it had a communications strategy to alert stakeholders on the progress and endeavours of the Department in trying to achieve its mandate. It was facilitating projects for women in mining. There had been a decrease in vacancies, but attracting, developing and retaining skilled staff was difficult, especially in the area of inspectors.

Discussion
Mr C Gololo (ANC) asked if there were a budget for derelict mines. What was the turnaround time for supplier payments? Had the beneficiation strategy adopted in 2011 been implemented?

Mr Ragimana replied that the funds for derelict mines had been split into three parts - R30m to CGS and Mintek, and R5m retained by the Department for monitoring and evaluation. The Department felt that they could halve the time it took to pay suppliers but that historically suppliers’ paperwork was not in line with the requirements of the Department.

Mr Thibedi Ramontja, Director General, replied that the beneficiation strategy had resulted in two completed value chains, and the platinum metals group and titanium chains were under development. The strategy demanded inter-departmental work, and task teams had been established.

Mr H Schmidt (DA) said he had been expecting budget cuts.

Mr Ragimana replied that there had been a steady increase in the budget, but no increase in real terms.

Mr J Lorimer (DA) said that MHS had a modest increase and asked how this would impact on the implementation of the programme. Were bursaries directed towards the education of people in the Department?

Mr Ragimana replied that the budget level was a concern, but they had engaged on the matter with the Committee.  Ms Gamede added that there was a bursary budget and that it was for internal trainees.

Mr E Lucas (IFP) asked how transfers to SOEs were monitored.  Could small scale miners be assisted with small sums of money, as they were being exploited?

Mr Ragimana replied that SOEs were funded through statutory funding. The SOEs entered into shareholder compacts and the Minister needed to approve their budget. The SOEs had to report back. The Department also funded specific projects done for the Department by CGS, for example.  All the processes had to be aligned to the Public Finance Management Act (PFMA).  Rollovers were acceptable if they were less than 5%.

Ms F Bikani (ANC) asked if the plan was presenting high expectations or gave a realistic picture of what the Department intended to achieve.

Mr Ramontja, replied that the Department looked at its historical performance and then planned to do what it could with the resources made available to it.

Mr Msiza added that the Department used 2010/11 as a baseline and looked at the average for the last five years. The MHS summit had looked at injuries and fatalities over the last 20 years. The Department’s target was to achieve health and safety standards as benchmarked by countries such as Australia, the USA and Canada. There had been significant improvement, but it would be a challenge to sustain this, especially in the gold and platinum mines.

Concerning MHS, Ms N Ngele (ANC) said that not everybody read newspapers or had access to television, so rural areas appeared neglected as far as public participation was concerned.

Ms Gamede replied that the SMP program targeted women and youth, seeking their views on programmes that happened around their communities.  Public participation had taken place in rural areas

Mr Lucas asked if the problem concerning old and new order mining rights had been sorted out. He said that in Limpopo, he had seen mining companies not using local workers.

Mr Nell replied that the Department had attempted to clean this situation up. He said he did not have information regarding matters before the court. Following the oversight visit to Limpopo, the Department had integrated the outcomes of the visit into the work programme of the Limpopo office and established a task team.

Mr M Sonto (ANC) asked if the Department intended to enforce compliance after inspections. What informed the inspections? Was it prompted by the lack of compliance?  Was the Department looking at legislation to strengthen legal follow up in cases of gross negligence which resulted in injury or death?  What loopholes prompted the MHS review?  What was meant by public participation - the general public or stakeholders? What were the water levels in the Johannesburg area as far as acid mine drainage was concerned?  Were jobs created when derelict mines were being rehabilitated?

Mr Msiza replied that inspections were scheduled based on the history of a mine and on safety and health matters. Mines were classified based on risk, with gold mines, for example, being seen as riskier. Gold, coal and platinum mines would be visited more often than brickworks. The 8 000 inspections were based on available resources. Outcomes could be that particular sections of a mine could be closed because of unsafe work conditions, or fines could be levied.

Mr Nell replied that compliance inspections included unannounced visits. Inspections were informed by clear violations of requirements, instances where prospecting turned to mining or where an operator’s rights had expired but operations were continuing. In these instances, rights had been removed or suspended.

Mr Ramontja added that the Department had engaged the CGS to monitor the AMD water levels continuously.

Mr Schmidt asked how many operational mines there were?  When would the MPRDA Amendment Bills be tabled?

Mr Ramontja replied that the amendments were still being discussed internally for any corrections before being placed before Parliament.

The Chairperson added that the hold-up was extensive owing to consultation taking place with stakeholders.

Mr Gololo asked what the budget dealing with illegal mining was. Was it the Department’s responsibility to close disused mines? Did the Department check whether companies consulted with communities as required by the MPRDA?

Mr Ramontja replied that there was no budget to deal with illegal mining. Where owners could be identified, discussions were held to sort out the issue.

Mr Nell replied that the MPRDA said that communities had to be consulted. The process was that complaints were received and the rights holder was given a chance to respond, following which there was an investigation. Remedial measures were then prescribed, with the Department having the right to cancel the mining rights if the measures were not complied with.

The Chairperson asked the Department to assist with the security arrangements for the Committee’s oversight visit to the Free State, as on previous occasions they had been under threat when visiting mines in Limpopo, with “zama-zamas” not afraid to attack the police.

Ms Bikani asked if the mining strategy for women would be excluded from the mining charter. She said there were apparently unidentified mines in the Eastern Cape and asked whether the Department had a budget for inspections in the Eastern Cape.  She said mines were opening up in the Free State without permits.

Mr Nell agreed that the role of women in mining was an outstanding issue in the state mining charter. He said there were new mining sites, but the challenge was that of illegal sites in the Eastern Cape, where people mined gravel for use on construction sites. The Department was working with municipalities to curb this.

Mr Lorimer wanted an assurance that the National Qualifications Standards were not being reduced to increase the pass rate. When would the Committee be able to see the final Acid Mine Drainage (AMD) report?

Mr Msiza replied that standards were not being lowered. The universities were exploring other forms of assessments, however.

Mr Ramontja replied that the AMD report would be released as soon as the inter-ministerial committee had looked at it.

The strategic plan was adopted by the Committee.

The meeting was adjourned.