Civil and General Mine's absence from briefing; Ikwezi Quarries on compliance with Mining Charter and beneficiation

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Mineral Resources and Energy

14 August 2013
Chairperson: Ms F Bikani (ANC)
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Meeting Summary

The meeting commenced with a discussion of the route to be followed regarding the absence of Civil and General Mine from the meeting. A letter from Civil and General Mine was read out, which stated that the company was not ready to appear before the Committee, and that it had to be approached through the Speaker of the National Assembly.  Members took exception to that notion, and to the tone of the letter, which was seen to be arrogant. It was decided to let a Parliamentary legal adviser examine correspondence with the mine and to find a route to compel the mine to appear, within the framework of powers granted to the Portfolio Committee. The Chairperson concluded that there had to be sanctions against the mine.

Ikwezi Quarries told the Committee that the company was 100% black-owned, and that 60% was owned by a board consisting of the CEO and another woman. Ownership was shared by two families. The company was adhering to elements of the Mining Charter, and there was beneficiation to the community.

In discussion, Ikwezi had to face criticism from the local municipal council and Mayor, and the area Chief. The Department of Mineral Resources indicated that there had been progress with community involvement in the shape of a poultry farm, but the Chief stated flatly that he had not seen any improvements. He said that Ikwezi Quarries had not delivered on promises made to the community, and that the community was dissatisfied.

Members agreed that promises had not been lived up to. There was concern over the fact that only two families owned Ikwezi, that there was a lack of an employment equity policy and a social development plan, and that there was no permanent Chief Financial Officer.  Ikwezi Quarries was advised to develop better relations with the Chief and the municipal council. There had to be greater transparency. The Department of Mineral Resources had to manage relations. Ikwezi was told that there was the perception that the Chief and the community had been undermined. Ikwezi had to contribute more to the community and involve them in their operations. The Chief was told to inform the community that Ikwezi would be given another chance to deliver on promises.

Meeting report

Discussion of route to be followed to compel Civil and General Mine to brief the Portfolio Committee
The Chairperson referred to oversight visits to Ikhwezi quarries and Civil and General Mine, in January of the previous year. There had been challenges of compliance with the Department of Mineral Resources (DMR). She drew the attention of the Committee to a letter received from Civil and General Mine, explaining why that entity could not brief the Committee on that day.

Ms Ayanda Boss, Committee Secretary, read out the letter. The letter suggested, inter alia, that the entity had to be approached through the Speaker of Parliament.

Mr R Sonto (ANC) remarked that high flown legal terms had been used in the letter, but it was not an apology at all. He suggested that the DMR (Eastern Cape) should give an appraisal of the interactions they had had with the mine.

Mr J Moepeng (ANC) was not happy with the tone of the letter. It was unacceptable to talk to Parliament in that manner. To prescribe to the Speaker was to undermine Parliament. The Committee was acting as an establishment of Parliament. Civil and General was not the only entity that had been invited to brief Parliament. The tone of the letter suggested that the entity was deliberately frustrating Parliament. He proposed that a decision had to be taken to compel them to appear.

Mr H Schmidt (DA) suggested that legal advice be sought about how the entity could be compelled in terms of the Powers and Privileges Act. The matter had to be referred to the Parliamentary legal advisers.

Ms B Tinto (ANC) felt that the apology should not be accepted. The entity had been told to present to Parliament, and the correct procedure had been followed.

Mr Schmidt commented that the Speaker should be approached to find out what the rights of the Committee were. The question was whether the mine was refusing to cooperate, or playing for time.

Mr Sonto remarked that arrogance had been evident when the Committee had visited the mine. The tone of the letter did not surprise him. They were refusing to comply. The Committee had suggested interaction between the Department and the mine. The mining company was putting demands to Parliament. They were not prepared to move away from non-compliance. He agreed with Mr Schmidt about the need to follow the rules, but the Committee had in the past subpoenaed people to appear. He asked about the interaction between the DMR and the mining company.

The Chairperson asked the Department to comment.

Ms Rebone Nkambule, Chief Director, Mineral Regulations Branch, noted that there had formerly been an unconverted mining right, and the entity had applied for a new mining right. The company had been evaluated on their processing plant. The Civil and General mining grant applied only to the mining area, and not to the processing plant. Their turnover only applied to the mining area. The Department had conducted an audit and found that the contribution to the local municipality was minimal, and was limited to the supply of gravel. The BEE partner had been interviewed, and it was clear that he was not involved in operations. There had been a review of economic benefits from the mining area into the processing plant. The Department was in a position to suspend operations at the mine. If the situation did not improve, the Minister could cancel the mining right.

The Chairperson asked the Parliamentary legal adviser to comment.

Adv Gary Rhoda, Parliamentary Legal Adviser, noted that the letter from the Civil and General Mine stated that the company had provided the Committee with a full input. He asked what had been required of the company in the invitation, and whether it had been clear that they had been asked to attend a portfolio committee (PC) meeting.

The Chairperson said that the Committee had got to see the mining company only on the second day of their oversight visit. The company had been asked to report on their relations with the DMR and compliance issues, and then to attend a PC meeting.

Mr Rhoode said that the Committee had powers to summon, but it was possible that the invitation was not in accord with the Powers and Privileges Act, and that Civil and General Mine was therefore not in breach. He asked that he be allowed to study the invitation.
The Chairperson asked the legal adviser also to study correspondence between the Committee and the mining company.

Mr Schmidt commented that the issue was whether the company had to be warned that they could expect to be summoned if they refused to appear, or whether summons should proceed immediately.

Mr Sonto suggested that the legal adviser be given a chance to study the correspondence.

Ms Tinto agreed that the legal adviser had to study the correspondence so that the Committee could proceed legally.

Mr Moepeng commented that the legal adviser had to take into account the nature of the decision that the Committee wished to make. Information had been requested from the company that had not reached the Committee. The company had to meet with the PC about compliance issues which the PC was convinced had not been adhered to. There was a refusal to cooperate. The BEE partner represented faceless people, who were not in the mainstream. The appeal to the Speaker by the mining company was arrogant. They had gone over the head of the Chairperson. The Minister had to invoke Section 93.

The Chairperson asked the DMR to present the outcome of interaction between the company and themselves.

Ikwezi Quarries on compliance with the Mining Charter and beneficiation
Ms Mandisa Siwahla, CEO of Ikwezi Quarries, indicated the type of mining right which had been granted to the mining company, the number of people employed, and the mining process.  Ikwezi had a female board of directors, consisting of herself and another woman. The board owned 60% of ikwezi. All shares were owned by six people representing two families.  Ikwezi Quarries was 100% black owned. She described community development as ongoing.

Ms Siwahla stated that Ikwezi Quarries had complied with elements of the Mining Charter, such as considering the profiles of communities, and identifying credible leaders. An amount of R150 000 had been committed to establishing a poultry farm. Health and safety statistics were supplied, as was information on beneficiation and job creation strategies, and social and labour plans.

Mr David Msiza, Chief Inspector in the Department of Mineral Resources, Head Office, noted that there had been inspections related to health and the code of practice.

Mr Terence Doyle, Principal Inspector of Mines, DMR, reported that there had been an improved scoring of group audits.  Ikwezi Quarries had complied in respect of surveillance of employees and machinery. Codes of practice had had to be updated. The Department had stopped the mine, and then re-opened it. Statutory SA National Roads Agency (SANRA) reporting had not been received from Ikwezi.  Reporting on labour and production figures had been corrected.  Ikwezi had not scored well on risk assessment. Occupational hygiene surveys were needed.

Mr Msiza added that an operating mine had to identify health hazards like thermal stress, which included both heat and cold stress.

Ms Brenda Ngebulana, Regional Manager, Mineral Regulations, DMR, noted that there had been improvements in the form of a poultry farm and the training of employees. Skills needs had been identified.

The Chairperson asked if relations with the DMR had improved.

Ms Ngebulana replied that they had, especially with regard to bursaries.

Ms Msiza said that inspections would continue, in terms of the Mine Health and Safety Act.

The Chairperson noted that the Mayor of Nyandeni had brought the area Chief to the meeting.

Chief Mzimkulu Bangani remarked that he knew nothing about the poultry project. The Chiefdom was still waiting to see improvements. The owner of the house was still spending money on the house. The rental had escalated.

Ms Thokozile Sokanyile, Mayor of Nyandeni, commented that the municipalities had not had much interaction with Ms Siwahla. A sum of R30 000 had been given to the community for a water project, but the municipality had been approached to extend the project. She was not sure about social responsibility in the area.

Chief Bangani said that the building project had been carried out with the DMR, and the Chiefdom had not been informed.  Besides the R10 000 rental paid, the Chiefdom was not aware of what had been said should be done for the community.

Mr Sinibongile Mbuyiso, Nyandeni ward councillor, commented that promises of roads, agriculture and clinics had not been lived up to. The Chiefdom was not aware of meetings with the Mayor. The Council was not satisfied with Ms Siwahla. She dealt with the Chiefdom through a lawyer. There was no cooperation. A lawyer had intervened about the rent. People had wanted to burn the quarry, because promises had not been honoured.

Mr Moepeng remarked that many things were happening. The situation was compounded by the presence of the Chief. Whilst the authority of the Chief was not questioned, there were the interests of democracy and entrepreneurship. The entrepreneurship of Ikwezi had to be respected. The Portfolio Committee represented the interests of the Chief, the council and Ikwezi. The Chairperson had to use discretion.

Ms L Mjobo (ANC) remarked that the DMR were seeing progress, and the Mayor had confirmed this. The Mayor had to report on the relations between the Chief and the council.

Ms N Ngele (ANC) asked if the DMR had visited the poultry farm. It had been alleged that the food parcels had been given to friends. The Chief had said that promises had not been lived up to. She asked where the poultry farm was.

Mr Schmidt commented that there was a communication gap between the Chief and the mine. The question was what Chiefs expected. The management of the mine was 100% black, but without community involvement, problems would stay the same. He suggested a community trust, and that Chiefs be involved.

Mr Moepeng noted that 60% of the Ikwezi top management were women, and that there were only two people on the board. The surnames of shareholders suggested that it was a family matter. The staff complement was not properly qualified, and there was no comment on employment equity. He asked if there was a human resources skills development plan.

Ms Siwahla replied that she had wanted to mine. It was to be for her own, and another, family. She had previously obtained a mining right in an area in the Eastern Cape. The quarry at Mdlankomo had not been planned as a community project.  Ikwezi quarry also had not undertaken to employ a lot of women. Employment equity measures would be put in place. She would e-mail the Committee about that.

Mr Moepeng asked about benefits to the community, and community ownership through employees.

Ms Siwahla replied that Ikwezi did not enrich themselves only. There were meetings with the Mayor. It was recognised that Ikwezi could not move on the land without the Chief’s consent. Mining rights at Mdlankomo were for 20 years. Other quarries supplied blockmaking dust. Ikwezi did not want to operate on a permit -- they wanted a mining right.

The Chairperson asked Ms Siwahla to answer the questions.

Mr Kwezi Peti, Ikwezi Quarry Manager, replied that 12 people operated machines, but 112 were employed elsewhere in the blockyard.  Ikwezi had opted for semi-automatic machines in order to create work.

Ms Siwahla added that lower level staff were being trained. Labourers were being trained to use machines.

The Chairperson asked who was responsible for human resources.

Ms Siwahla replied that it was Mr Peti.

Mr Moepeng remarked that there had to be an HR and skills policy in place to ensure the development of employees. There had to be skills development and community development policies. There was no CFO, only an accountant.  An appointed CFO could run finances on a daily basis. Who ran the community trust had to be specified.  Community benefit could not be reduced to rental.  Ikhwezi had to contribute over and above that. The Committee had to be informed about rates and taxes . Ikwezi had to help the municipality and Chiefs to be proud of them.

Ms Siwahla replied that Ikwezi as yet did not have the strength. They were not yet big, but were trying to correct their mistakes.

Mr Moepeng commented that there was a situation developing between the Chiefs and Ikwezi Quarries that had to be curbed.

Mr Sonto called on the DMR to manage relations between the various parties. There was a perception that the community and the Chieftaincy had been undermined. The situation had to be rehabilitated.

Mr Sonto asked if there had been a move from a previous site to the present quarry, and if so, what had happened to the previous site.  He asked for a response from Ikwezi to the fact that the Chief and community felt undermined, and that the Chieftaincy had said that they had to pack up and go.  He pointed out that the Chief had not seen the poultry farm, whereas Ikwezi and the DMR claimed that the project had been launched.

Mr Sonto remarked that the R10 000 rental that Ikwezi was paying, was not a contribution to the community. The question remained -- what was being contributed to the community?  He asked if people other than employees were involved in operations. He got the impression that nothing had changed. The Portfolio Committee had talked to the community, together with the Mayor. When the community complained, lawyers were brought in. There were no sound relations. The question was how relations could improve.

The Chairperson agreed with Mr Sonto that the involvement of lawyers was disturbing. She referred to funding that Ikwezi had received from Small Scale Mining, and how those finances had been managed. The Committee required a detailed report.

Mayor Sokhanyile commented that municipalities had not been informed about finance management.

The Chairperson called on Ikwezi to explain the employment structure and the board.  Ikhwezi had committed itself to the development of women and youth. The Committee wanted to empower them. There was an improvement in attitude, and efforts to comply.  Ikwezi had to set an example for women.

Mayor Sokhanyile remarked that there were relations between the Chieftaincy and the council. The ward councillor had to meet with the Chief. She herself met with Ms Siwahla about other issues.

Ms Sokhanyile asked if Ikwezi had touched base with municipalities when its licence was issued. The community had brought a petition that Ms Siwahla was not living up to promises. Ikwezi Quarries had to let the council know when they contributed to the community. The municipality had community needs at heart. Mining had to be evaluated.

Ms Nkambule replied that in terms of the Mining Charter, a mine had to check with chiefs and municipalities when a licence was granted. The Mining Charter also required that BEE beneficiaries had to be identified. She admitted that the various parties were not talking to one another enough. Workshops were needed to establish who mined in an area, what approvals had been granted, and what the mining regulations required. Mining companies applying for a licence had to have an environmental evaluation done. The DMR engaged other stakeholders in workshops.

Ms Ngebulana added that Ms Siwahla had mined in an area not awarded to her. She had a mining permit.

The Chairperson remarked that when mining permits were granted and the mines failed, there were ownerless and destitute mines. She asked what had happened to previous mines.

Ms Sokanyile said that the difference between a mining licence and a mining permit was that a mining permit did not require a formal labour plan.

Mr Msiza added that the difference between a mining licence and a permit was size. There were workshops to enable stakeholders to say how they would be affected, and to determine what had to be considered before issuing.

The Chairperson said that mining in the regions was under the auspices of the province. The Committee went to the provinces to determine compliance. The Committee had to deal with regional managers. It was not clear whose responsibility was what.

The Chairperson remarked that the DMR had spoken of “grey areas” in the way they inspected.

Mr Msiza replied that the chiefs, municipality and the DMR had sat together to discuss legal matters and service level agreements.

Ms Siwahla apologised to the Chief for a breakdown in communications. There had been no clarity about roles and responsibilities.

Chief Bangani said that he could not go against the community. He would extend the apology. The brick project was supposed to go to the community. His concerns had not reached the DMR.

The Chairperson said that the discussion was not moving forward. The DMR had suggested a meeting. There had to be time frames for a meeting between the DMR, the municipality, the Chief and community members.

Ms Mjobo urged Ikwezi to go back to the community with a solution.

The Chairperson stressed that the Chief had to account to the community. The PC had met with the community about volatile issues. The DMR’s capacity was a challenge. The Eastern Cape was vast. DMR regional offices covered too vast an area. The area had to be prioritised. Decisions had to be made to empower Ms Siwahla and other black women. There were possible “grey areas” in the Act. The different parties were not working effectively together. Grey areas in legislation had to be examined. There was the issue of land versus mine ownership. There had to be a plan to get Ms Siwahla back on track. Relations with the community had to improve. There had to be a programme of action ready by 2 September. The DMR had to develop their social labour plan and identify the needs of that community, before it was extended elsewhere. Plans had to have the agreement of the Chief.

The Chairperson continued that funds had been given to Ms Siwahla. There was a difference between DMR labour plans and projects of her own. The Mining Charter was clear on the need for mining companies to report. There had to be a transparent process. The community had to understand why not so many people could be employed.

Ms Ngele urged Ms Siwahla to apologise to the Chief about challenges. The Chief had to tell the community that the Portfolio Committee was giving Ms Siwahla another chance. She appealed to Ms Siwahla to keep her word and work with the community. She had to humble herself to the people whose land she was on.

The Chairperson concluded that Ms Siwahla had not yet lived up to her promises. There had to be a report on 17 October about what had to be in place, according to the Mining Charter. The Committee was not happy with the fact that there were only two families involved. There had to be a credible person to report on finance. DMR inspections had to be more thorough. There had to be details given about money received from Small Scale Mining.

Correspondence with Civil and General Mine had to be examined to get a legal opinion. The Committee had to link with the DMR, to ensure that there were sanctions against Civil and General Mine.

The Chairperson adjourned the meeting.


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