PC Mineral Resources: Committee Reports on Free State and KwaZulu-Natal oversight visits & Committee Programme

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Mineral Resources and Energy

27 February 2013
Chairperson: Mr F Gona (ANC)
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Meeting Summary

The Committee met to consider and adopt both its Free State and to KwaZulu-Natal Oversight Reports. The Committee also adopted the Draft First Term Committee Programme for 2013.

There was discussion on the health and safety strategies of the mining companies, the legal requirements for their operations, adherence to the Mining Charter, mining ownership, and payouts of dividends, procurement and employment of local people instead of foreign nationals.

The Committee made observations and recommendations, which included the appearance of mining companies before the Portfolio Committee.

Meeting report

 Committee Free State Oversight Visit Report

The Chairperson asked Members to put more emphasis on recommendations. He corrected a grammatical error in paragraph 1.2 which stated that mineral laws had been enacted and amended, for example, the Mineral and Petroleum Resources Development Act, the Mining Charter had been amended, the Job Creation Strategies had also been amended, etc. The Committee had not tested the level of compliance by mines on these laws hence the visits had been informed by those visits.

The Chairperson said the Committee should pay attention to the conclusion in which the Committee expressed its findings. Discussion between Petra Quarry and the Department of Mineral Resources (DMR) should be conducted to assess what was expected of Petra Quarry to make it compliant. Petra Quarry should appear before the Committee.

Mr M Sonto (ANC) said, when Petra Quarry was invited to appear before the Committee, the regional DMR should also attend.

The Chairperson said that on all their oversight visits the Members were introduced by a staff member of the national DMR. It was therefore not necessary to request the regional DMR; it was up to the national department to decide whether to send regional representatives.

Committee KwaZulu-Natal Mining Operations Oversight 30 July– 03 August 2012 Report
Ms F Bikani (ANC) said that there was an issue of the health and safety mining statistics where the Committee was doubting the accuracy of the Somkhele Mining Company Statistics, doubting issues of none reported cases, and doubting whether the training was sufficient in terms of people competent enough to open the emergency bend in good time should there be an accident underground. There was no correlation of explanations which made Members doubt whether employees were getting sufficient training. There were also tensions and strains in the different unions that were represented in the company.

The Chairperson corrected that the mine Ms Bikani was talking about was Zululand Anthracite Colliery (ZAC) Mining Company, the one that Members requested to appear before the Committee. Both ZAC and Somkhele were in a similar situation because they were in the outlining areas.

Ms Bikani said there was also a serious issue of health and safety strategies where Members felt that another report should be sent and there should be monitoring of their mining health and safety issues. It was not convincing the way the company gave its statistics to the Committee in terms of reporting fatalities and reporting minor ailments.

The Chairperson interjected that the recommendations actually reflected what  Ms Bikani was saying because the report acknowledged the involvement of the traditional leadership. But then the Committee said it further gave direction in the training of top management of the mine health and safety programmes, which concerned occupational diseases and lower accident risks. But the Committee raised as a concern the trustees of the traditional boards where the company should negotiate a seat. Ownership, independent structures, benefits accrued to communities, lack of employees’ empowerment, lack of rehabilitation, no social labour plan and benefits referred to that.

The Chairperson said that the company ownership of ZAC was constituted 26 per cent by Manganese Metal Company (MMC) and 74 per cent by Riversdale Mining.  26% ownership of MMC was constituted by ZAC Employment Economic Trust with 9% shareholding. The Community Trust had a shareholding of 13% and Siyakhula Sonke Consortium Group had a 4% shareholding. The Community Trust comprised four Amakhosi who appointed Justice Ngwenya to manage the Trust on their behalf.

The Chairperson said that ZAC had company accommodation, which accommodated 588 employees.

The Chairperson gave figurers for ZAC's procurement and enterprise development.

The Chairperson said the Committee commended the preparations and the manner in which it was welcomed. However, he raised concern on; the manner in which the mine was reporting as it seemed as if it did not know what to report about. However, the committee would take a decision of either to summon the mine to Parliament or the Committee to come back for a follow up visit; mine ownership, constitution of ZAC Board and Community Representation in the ownership structure; payouts of dividends and what informed the mine to give 9% of shareholding to ZAC Employment Economic Trust; procurement as it did not have a spending breakdown on budget; actual and HDSA service providers as it had caused animosity within communities on the allegation of the use of Kasimira Trading; ownership of the mine, procurement processes and procedures; Historically Disadvantaged South Africans (HDSA) in management as it was not clearly stated; employment equity targets and plans that were in place for compliance; unclear engagement between traditional council and the community, as they were allegations levelled against the mine and traditional council; transformation in terms of skills development; inclusive working management and the number of females employed; and environmental management in terms of rehabilitation, air pollution measurement, storage system of explosives and water management.

The Committee had many concerns but would give the other side the opportunity to give its case before responding. The Goldfields Mining Company would be invited to come before the Committee because the Committee could not visit it.

The Committee thanked the Department of Mineral Resources for its participation. The Department had also assisted the Committee in soliciting correct information wherever there was misleading information from the mining companies. However, on the Committee’s observations, the DMR was requested to place emphasis on the definitions and meanings of terms in the scorecards as there was inconsistency in the understanding of HDSA definition; monitor the high competent interest that led to community conflicts of hosting communities especially in ZAC; to address, monitor and coach mining companies in enforcing compliance and challenges; and to inform the Committee of any improvement.

The Committee would give its opinion on visited companies after it had studied the report, but, generally, the visit comprised a mixture of companies, that is, the good and bad companies in terms of compliance.

Ms Bikani interjected that Members noted that the issue of ownership under the Mining Charter did not seem to be well interpreted by almost all of the mine companies. Because of the lack of detail in the Mining Charter it did not give he true reflection of true transformation. This matter should be raised with the Department. Companies should know exactly what should be expected of them in terms of the Mining Charter because in three or four of the mining companies, there was an issue in terms of the layout their structure and organogram.

The Chairperson said that when one entered into business by law one was supposed to familiarise oneself with the legislation. If companies they did not comply it would not be proper for DMR to hold workshops for them, because companies had familiarise themselves with the laws of the country. It was like any individual; if he wanted to open a company he had to go through the Companies Act (No. 71 of 2008) to understand where the company should be registered and how.

The Chairperson said that the Committee had to review the DMR amendments and be vigilant of the MPRDA. He suggested a workshop to examine what expertise the Committee needed. The Committee must also consider introducing amendments of its own.

Ms Bikani said that the Committee should meet with the Portfolio Committee on Energy on the MPRDA.

Mr L Gololo (ANC) asked what the difference was between the observations and recommendations because it seemed they were almost the same. On the visit to KZN the main concern amongst all the mining companies visited as raised by the communities were, for instance, the question of employment of foreign people while employing local people. The Committee would recommend a change of strategy.


The Chairperson hesitated to include this recommendation, as employment should be open to everybody wherever they wanted to work.

Mr Gololo said what he meant was not only people coming from other countries but also people coming from other provinces because the concern was that there were unemployed local people from those communities that surrounded the mining companies. The first opportunities should be given to the local people.

The Chairperson said that the Committee could not capture that argument. Its recommendations should rather be to let the mining companies manage it as they moved on. The message was that the companies should create that space for the locals; for instance, if a new mine were being opened the company would bring all skilled personnel and take the rest from that locality. One could not undo the historical developments because there were people from Lesotho, Swaziland, Mozambique, and so forth that had been working on the mines for 30 years or more. But the sentiment raised by Mr Gololo was captured and a message had been conveyed to the mining companies to prioritise local people but they did not wanted to make it law otherwise it would be problematic.

The Chairperson said the Committee had agreed that it wanted ZAC and Money/line companies to appear before the Committee and dates would be given to the companies. Under the conclusion the Committee should add another bullet point in which the Committee pointed out that the mines in KZN were not compliant with mining laws. The second recommendation was that the Minister of Mineral Resources and DMR should improve the capacity of DMR offices in the provinces, especially compliance units because DMR complained of being overstretched and under-capacitated.

Mr Gololo said that Members should recommend that the budget of DMR be increased to address under- capacity.

The Chairperson asked if how one increased the budget when the Minister said the budget was enough. So the Committee should recommend that money be found in order to increase the capacity of the Department and it was making that recommendation just before the tabling of the budget.

Ms Bikani moved for the adoption of the reports.

Mr Sonto seconded.

The Committee adopted both reports.

Committee Programme
The Chairperson informed the Members that next week the Committee would receive a briefing from ZAC and have final deliberations on the update by DMR and Department of Labour on Aurora Groetflei mine so that the matter was finalised. On 20 of March would be discussion on the impact of the State of the Nation Address on the Department of Mineral Resources and the adoption of the report on the oversight visit to the Eastern Cape. On 27 March the Committee would consider the Mining Charter report and 2 April would be the start of the Constituency Period.

Ms M Ngele (ANC) moved for the adoption of the programme.

Mr Gololo seconded the move.

The Committee adopted the programme.


Committee minutes

The Committee postponed adoption.

The meeting was adjourned.


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