Department of Mineral Resources on its 2014 Strategic Plan (Programme 3: Mineral Regulation & Programme 4: Mineral Policy)

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Mineral Resources and Energy

09 July 2014
Chairperson: Mr S Luzipho (ANC)
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Meeting Summary

The Department of Mineral Resources briefed the Portfolio Committee on Mineral Resources on its Budget and Strategic Plan and Annual Performance Plan. The presentation was a continuation from the meeting of Tuesday (8 July 2014) and therefore focused on Programme 3 (Mineral Regulation) and Programme 4 (Mineral Policy and Promotion). The purpose of Programme 3 was to regulate the minerals and mining sectors to ensure economic development, employment and ensure transformation and environmental compliance and the purpose of the Programme was to formulate mineral-related policies and promote the mining and minerals industry of South Africa, making it more attractive to investors. This would be done through research, providing relevant information to enhance global competitiveness, reviewing policies and formulating legislation to achieve transformation and attract new investment into South Africa’s minerals industry.

The presentations were centered on the Programme’s strategic objectives which were as follows:

Programme 3: Mineral Regulation

1.     Promote Job Creation

2.     Promote Sustainable Resource  Use and  Management

3.     Reduce State environmental liability and financial risk

4.     Implement  transformation policies / legislation

5.     Monitor and enforce compliance

6.     Improve turnaround times

Programme 4: Mineral Policy and Promotion

  1. Promote investment in the Mining Sector
  2. Promote sustainable resource use and management
  3. Facilitate transformation in the Mining Sector
  4. Develop and review internal processes
  5. Improve turnaround times

Members raised a number of questions to the Department, particularly on its monitoring of mines – if it had enough capacity to conduct thorough inspections, was there enough personnel, if there was not enough inspectors, how many would be enough and how much would this cost? They further asked how many mines it was able to inspect in a year and argued that all 1600 mines needed to be inspected, preferably as a special project before the end of 2014, which was when the Mining Charter expired. Another area of focus through the discussion was that of Social and Labour Plans (SLP) projects. How many SLPs were on track? Members argued that there was no synergy between the SLPs and the Integrated Development Plans (IDPs) of municipality. The conflicts which arose from mining communities together with the poor living conditions of the mine workers were also highlighted as concerns by Members. The Department was also urged to have continuous discussions with other government departments such as the Department of Water Affairs, the Department of Human Settlements and the Department of Environmental Affairs. The South African Local Government Association (Salga) also needed to be engaged in the discussions, especially around municipalities and their IDPs. 

Meeting report

Chairperson’s opening remarks

 The Chairperson welcomed Members to the meeting, together with representatives from the Department of Mineral Resources (DMR) and asked that the DMR continue from the presentation made the previous day.

Briefing by the DMR on Programme 3 - Mineral Regulation

Dr Thibedi Ramontja, Director-General, DMR, thanked Members for the invitation and explained that the Department would continue with the presentation from th eprevious day.

Mr Joel Raphela, Deputy Director-General: Mineral Regulation, DMR, explained that the purpose of Programme 3 was to regulate the minerals and mining sectors to ensure economic development, employment and ensure transformation and environmental compliance.

The strategic objectives of the Mineral Regulation Branch were to:

1.     Promote Job Creation

2.     Promote Sustainable Resource  Use and  Management

3.     Reduce State environmental liability and financial risk

4.     Implement  transformation policies / legislation

5.     Monitor and enforce compliance

6.     Improve turnaround times

He explained that job creation was measured by the number of jobs created by the DMR through the issuing of mining rights and the implementation of Social Labour Plans (SLPs) and through inspections. Secondly, job creation was promoted through the implementation of SLPs. Sustainable resource management use was promoted by DMR through approved work programmes, adjudicated SLPs relative to right s issued considering the element of sustainability, and through approved Environmental Management Programmes and Plans (EMPs). The DMR also had a responsibility to ensure equitable and sustainable benefit from mineral resources through the reduction of state environmental liability and financial risk. The DMR therefore assessed the percentage of order provisions issue to remedy inadequate financial provision for example. With regards to transforming the minerals sector, the DMR had a responsibility to implement transformation policies and/or legislation. Among other things, a number of rights and permits have been issues or Historically Disadvantaged South Africans (HDSA) to facilitate their entry into the minerals sector, a number of workshops have been conducted by DMR and various procurement audits and workshops have been conducted to facilitate HDSA entry to the sector.

The DMR also had a responsibility to monitor and enforce compliance. Mr Raphela explained that the programme aimed to achieve 100% compliance with regulatory requirements such as the Mining Charter and legal compliance inspections such as the (Social and Labour Plans, Black Economic Empowerment and Mineral Law). Inspections focused on all elements of the mining charter excluding housing and living conditions. SLP inspections on the other hand focused Focus on eight identified priority areas of the Special Presidential Package on housing and living conditions of mine workers. With regard to improving turnaround times, there was a strong emphasis on adhering to prescribed time frames around the granting and issuing of rights and the registering and recording of mining permits.

Discussion

Mr J Lorimer (DA) thanked the DMR for the presentation. He asked whether the DMR was regulating in a way which promoted growth within the sector. What was the average turnaround time for the DMR’s license applications and what were some of the barriers to the quick issuing of licenses? Were all SLP’s integrated with the IRP and how many of them were on track? With regard to inadequate financial provision; how many companies had the DMR acted against? How big of a problem were conflicts within mining communities? He made mention of the Mining Charter and asked whether the inspection of mines took place on an annual basis.

Mr H Schmidt (DA) also referred to SLPs and their link to the Integrated Development Plan (IDP). He argued that there was a lack of synergy between the IDP and SLPs; there was no synergy between local and national government. What plans did DMR have for dealing with the evident problems at local community level? On monitoring and compliance, he said there seemed to not be enough inspections of mines as required and therefore there were high levels of non-compliance with the regulatory framework. How was DMR addressing such matters of non-compliance because what was presented by the DMR did not seem like a true reflection on what was going on at the ground?

The Chairperson said it would be up to the Committee to make decisions on verifying the information presented to the Committee by the DMR, through inspections and oversight visits.

Mr Schmidt agreed with the Chairperson.

Dr Ramontja responded that the DMR received information on the state of the mines on a monthly basis, information such as turnaround times and the number of jobs created. This information could be made available to the Committee upon request. The DMR was however focusing on the creation of more indirect jobs through procurement and social and labour plans etc, rather than on focusing on direct jobs. On the question of SLPs and their synergy (or lack of), with municipalities, he said that social and labour plans could never work on their own, there needed to be integration between municipalities, the IDP and other government departments such as the Department of Human Settlements and the Department of Water Affairs.

Mr Raphela replied that SLPs were indeed integrated with the IDP, even though consultation between the two needed to be improved. The most important amendment within the MRPDA was that of creating more synergy between the two. On the question on conflicts between mining communities and the mining companies, he said problems varied from one area to the next and for different reasons. However socio-economic interventions were needed and all the relevant stakeholders had a role to play in resolving the conflict. He agreed however that the issue of licensing required more attention. On compliance, he said inspections were conducted on an ongoing basis. On the question on turnaround times, he said the turnaround time for finalizing an application was 180 days and 300 days for mining rights. There were a number of reasons why an application would take longer than expected; some applications needed further clarification or litigation and some raised some objections from a whole host of entities, therefore all these matters needed to be addressed before an application was processed. The advisory committee to the Minister handled such matters. On the question on financial provision, he said for holders of mining rights there was a requirement that they update their financial provision on an annual basis and submit reports to the DMR. Non-compliance therefore was responded to through various directives. Inadequate financial provisions were dealt with by the DMR with an even stronger focus.

The Chairperson reminded the DMR on the question asked about whether there were enough personnel within DMR to conduct inspections. He raised a concern about whether or not compliance needed to be a matter of an audit query.

Mr Lorimer raised a follow up question around the indirect jobs created - how did the DMR assess these and how were they different from those direct jobs created by the DMR? On SLPs, he asked what the process of SLPs was and whether DMR consulted municipalities. How many SLPs were on track? On financial provision, he asked how often these were checked up on and how big of a sample did the DMR look at?

Dr Ramontja agreed that the DMR was experiencing challenges with regard to mine inspectors and the Minister had been engaged in this regard. Even the structure of the DMR was being changed to increase the number of inspectors. The DMR looked at the areas of risk when it came to inspections and that not all mines were inspected. The DMR did not have the capacity to inspect the 1600 mines annually. The private sector also needed to be audited to ensure they submitted the relevant information and that there was compliance. The DMR took serious action where noncompliance was prevalent, what was important to remember was that the Chief Inspector of Mines was more concerned about changing behavior by making noncompliance unattractive.

Mr Raphela responded to the question around SLPs and said mining companies submitted audited reports to the DMR and firm action came from the DMR were necessary. Communities were also invited to submit their own reports on issues which were a concern to them. In addition, the DMR conducted spot checks on various mining companies. Section 93 of the MRPDA ordered the DMR to revoke mining rights were there were instances of non-compliance. SLPs were informed by and linked to the IDPs of municipalities and there was a thorough process of consultation between the two. He agreed however that the SLPs needed to be properly aligned to the IDPs of municipalities and sustainability was also very important. He also agreed that synergy between municipalities and SLPs was very important therefore consultation between the two needed to be strengthened. He agreed with Dr Ramontja that capacity within the DMR continued to be a challenge, especially around monitoring the sector. The DMR was busy with the assessment of the Mining Charter and the results of the assessment would be finalized by December 2014.

Mr J Malema (EFF) said all 1600 mines needed to be adequately monitored and inspected. The inspection of a sample would result in the mines of high-end politicians and multinational companies not being monitored. Such political manipulation needed to be avoided. The “big boys” within the mining sector also needed to be held accountable. On the Mining Charter, he said the Director General needed to work on a massive scale to determine compliance within all the mines. He argued that if the Independent Electoral Commission could manage to monitor over 22 000 voting stations, the DMR could also have a special project around the mining charter to monitor compliance before December 2014.

Mr Schmidt asked whether an independent company would be appointed for the inspections. He agreed with Mr Malema that there needed to be full inspections of all mines before the 2014 deadline. He asked whether December 2014 was the date for when the DMR’s report on the Mining Charter would be finalized.

Mr Lorimer said it was appreciated that the DMR involved traditional leaders within these local mining communities. He asked whether the DMR was involved in ongoing discussion with other departments such as the Department of Water Affairs. What was the exact number of mines which the DMR inspected in a year? How many Section 29’s had been issued? How many mining rights have been revoked and how many inspectors would need to be employed and how much would this cost?

Ms N Mdaka (ANC) asked about how frequent the spot checks were. She said the living conditions around the mining communities were very appalling. What plans did the DMR have in place to assist these communities? In her view, the living conditions within those communities were similar to those experienced by the pigs at the Member’s farm in the North West.

The Chairperson said there needed to be a discussion around the way the DMR reported to the Committee seeing that the previous day’s meeting was on inspections but the topic of the current meeting had changed from Mineral Regulations to Inspections. The Chief Inspector needed to be given an opportunity to respond to Members’ concern. The DMR had not yet set a criteria for the mines to be inspected and what the risk elements were. The flow of information could not flow from one direction, trade unions and internal health and safety committees also needed to be consulted. The DMR report was currently being prepared and would be compiled; once the report has been completed it will be made public by December 2014. He agreed that there was a need for talks about practical activities between DMR, the Department of Water Affairs, the Department of Human Settlements and roads. The South African Local Government Association (Salga) needed to lead the IDP programmes.

Dr Ramontja responded that there was a challenge with the DMR conducting inspections in all the 1600 mines as it did not have adequate resources. On the Mining Charter, he said the DMR’s Information Technology system would assist inspectors identify mines which were not compliant. The information on the number of licenses revoked etc would be provided to the Committee at a later stare. On the living conditions on mine workers, he said the Mining Charter indicated that the mine workers who were living on the hostels needed to be accommodated differently. Hostels would therefore be converted to decent living conditions, therefore by the end of 2014, these hotels would be eradicated. 

Mr Malema responded to the DMR’s response on inspections and compliance and said that it had a responsibility to monitor and inspect more mines, not though IT systems but physically.

The Chairperson thanked the DMR for the presentation and thanked Members for their contributions to the meeting.

Presentation: Briefing by the DMR on Programme 4 – Mineral Policy and Promotion

Mr Mosa Mabuza, Deputy Director-General: Mineral Policy and Promotion, DMR, explained that the purpose of the Programme was to formulate mineral-related policies and promote the mining and minerals industry of South Africa, making it more attractive to investors. This would be done through research, providing relevant information to enhance global competitiveness, reviewing policies and formulating legislation to achieve transformation and attract new investment into South Africa’s minerals industry.

The strategic objectives of the Mineral Policy and Promotion Branch were to:

  1. Promote investment in the Mining Sector
  2. Promote sustainable resource use and management
  3. Facilitate transformation in the Mining Sector
  4. Develop and review internal processes
  5. Improve turnaround times

The DMR aimed to promote investment into the mining sector through forging technical and strategic partnerships, providing non-financial support to Small Medium Micro Enterprises (SMME) in mining, engaging coal stakeholders and reporting on the implementation of beneficiation frameworks and promotional activities to name a few. The DMR would be promoting sustainable resource management through its technical partnerships with State Owned Entities such as the Council for Geoscience and Mintek. Derelict and ownerless mines would also be rehabilitated. A revised mining strategy would be looked at for sustainable growth and meaningless transformation. The transformation of the minerals sector would be facilitated through the review and/or amendment of policies and regulations, one of which being the Mineral Resources Petroleum Development Amendment Bill. The Mining Charter would also be reviewed. Policy impact study reports would also be made available.

The Chairperson thanked Mr Mabuza for the presentation. Members had no further questions.

The meeting was adjourned. 

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