Derelict and Ownerless Mines; One Environmental System for mining: update by Department of Mineral Resources

Meeting report

The Chairperson reminded the Committee that it was deal with transfer pricing which had been on the agenda. Subsequently, it was agreed with the Committee on Finance that this would be a joint briefing [slotted for Wednesday 19 February].

One Environmental System for mining: briefing by Department of Mineral Resources
Mr Joel Raphela, Deputy Director-General: Mineral Regulation at DMR, tendered apologies on behalf of the Minister and Director-General who were out of the country and the Deputy Minister who was in Cabinet.

He stated that the strategy for sustainable growth and competitiveness in mining identified the fragmented system as a constraint to attracting investment. One of the challenges with the fragmented system was that the environment was managed by three different departments: environmental plan (DMR requirement), environmental authorisation (Department of Environmental Affairs and provincial environmental department process) and water use licence (by the Department of Water Affairs) were often processed consecutively rather than concurrently, resulting in uncertainty in the investment climate. The process of streamlining the operations of these three departments was started in 2008 and three policy options were developed. These options involved, among others, legislative amendments. The governance structure involved the three departments in a one system environment programme: Keep the environment function at DMR, include listed activities, and move appeals to DEA, with time frame alignment with DWS. This required legislative amendments of the National Water Act (NWA), National Environmental Management Act (NEMA) and Mineral and Petroleum Resources Development Act (MPRDA).

The mining and prospecting processes will follow the Mineral and Petroleum Resources Development Act (MPRDA) process: 300 days for mining rights and 180 days for prospecting rights; while the environmental authorisation and water use licence processes will be governed by their respective legislation. The process will run parallel and decisions will be taken simultaneously. The timeframes for the various licences will be aligned in a way that ensures they run concurrently so as to achieve either the 180 days or 300 days deadline as the case may be. The alignment process entailed the need for additional officials at DMR to help in implementing the process and the funds availed by the National Treasury for goods and services were used for the creation of 35 additional Assistant Director positions.

A number of activities have been completed in the implementation of the programme, including the amendment of the relevant legislation. The training of 31 officials as Environmental Mineral Resource Inspectors is due to commence later this month. The project represents a best model on a coordinated government effort in improving the investment climate.

Discussion
Mr H Schmidt (DA) referred to slide 14 of the presentation where it stated that the Department of Water and Sanitation (DWS) would run its process in parallel. Depending on the catchment area, they would not achieve the 180 day deadline but would achieve the 300 day deadline. This seemed problematic because it appeared to be a qualification drawing a line through the whole time process. What were the constitutional challenges on the process followed to streamline the one-management one-process system? The practicality of the ten days compared to 43 days was difficult to understand. When is this structure due to be operationalised because it appears there is no date set for its implementation? Are the various licences such as mining rights and water use licences going to be issued simultaneously?

Mr J Lorimer (DA) asked what would happen if the deadlines spelt out in slide 10 were not met generally and particularly where the default was caused by officials of the department. Did the 35 officials referred to in the presentation represent the additional number of officials required for the process? Why were 31 officials going for training as opposed to the 35 officials recruited? Does DMR have adequate funding for this programme? How many people will be conducting inspections countrywide once the system is in place? What will happen to the implementation of the system if by the 8 December deadline, the President has not assented to the one piece of legislation that is still outstanding?

Mr J Esterhuizen (IFP) indicated that he was not impressed with the presentation because it lacked in content. The Mineral and Petroleum Resource Development Amendment Bill passed in Parliament earlier in the year appears to do the exact opposite of what the National Development Plan (NDP) proposed in that it increased the exercise of delegating important regulatory functions, particularly on local beneficiation of minerals, to the Minister. This and other provisions of the Bill appear not to be investment-enhancing as suggested in the concluding remarks that the project represented a best model for coordinated government effort in improving the investment climate. There are a lot of pros and cons to this as well as with the automotive industry where platinum is a catalyst of vehicles and through which many jobs can be created in the country since we can buy platinum for less than what the overseas market pays for it.

The number of mining licences being granted is worrisome. Nearly 4 000 mining licences were issued in Mpumalanga alone. The DMR have a responsibility to make a meaningful contribution to the use of natural resources in a sustainable way because the people also need land for agriculture. The migrant labour system, which is a remnant of the colonial and apartheid eras continue to be a scar on the industry, is also of concern. Mine waste is polluting the Vaal River and it is not enough to just provide relevant training as more should be done to address the problem.

Mr Z Mandela (ANC) spoke in vernacular and then asked what would happen if the timelines set for the processing of the various applications were not met, especially in the light of the tendency to let things go on for years without taking action to address them.

The Chairperson sought clarification on the role of the Assistant Directors as there was a risk of having a hierarchy where there is a shortage of personnel who should do the actual work. Is the allocation for the programme a permanent or one-off allocation and if permanent, is it going to remain the same or will it be fluctuating? How will the implementation or usage of the funds be monitored or administered? How possible is it that some mining companies can be operating without water use licences? Could the number of such companies be more than has been alluded to in the presentation?

Mr M Matlara (ANC) asked how many of the 31 people being trained were white, black and if disability was taken into consideration in the recruitment of these people.

Ms M Mafolo (ANC) referred to the governance structure involved in the project and asked how many people were involved at the level of the various task teams in the said structure. How many days did the licencing process take before the departments came together?

Mr Raphela responded that when the budget allocation was first made, it came in the form of goods and services and the DMR, working with National Treasury, effected the reclassification to compensation of employees so that the relevant personnel could be recruited. The funds were always intended for implementation, so it was a technical issue that needed to be worked through and that led the DMR to appoint the 35 Assistant Directors who have been spread across all regional offices. The relevant work happens at Assistant Director level because DMR accorded it important and linked that importance to the level and responsibility so that, using the diamond-shaped structure, DMR is able have work taking place at an appropriate level which is deemed to be Assistant Director. DMR took a strategic decision in this regard.

DMR has, outside the 35 Assistant Directors, in its existing structure capacity within the mine environmental management section in the form of Assistant Directors, officers and Deputy Directors charged with responsibilities in this regard. The allocation we have is not a one-off allocation; it will be in the MTEF going forward. As part of strengthening monitoring and enforcement activities there is an additional new allocation of R42 million over the MTEF period that has been made available to the department for MPRDA-related activities covering an entire portfolio so as to assist with compliance and enforcement activities.

The training of inspectors is intended to be on-going and the 31 are the first batch to be followed by another intake next year. The figure of nearly 4000 mining licences in Mpumalanga probably refer to the number of applications and not the granting of licences because DMR’s records show that the number of granted rights falls far below 1000. The observations made with regard to the presentation and MPRDA are noted but it is emphasised that the MPRDA is a progressive piece of legislation that seeks, in its evolution, to always be guided by sector strategies – working with stakeholders to position this important industry to be one that is globally competitive. It is never intended to be the opposite. The endeavour to refine and own the machinery for implementation is with the view of continually ensuring that the mining industry, which is key to the economy, thrives and contributes to economic growth.

The existing system before the One Environmental System  used to take anything from two to three years to process licences because DMR did not have control over, for instance, how long water use licences would take to be issued. In addition, some mining companies are still deemed to be operating without water use licences. This demonstrates the magnitude of the challenge DMR is dealing with. The One Environmental System  will be implemented even if the outstanding piece of legislation is not assented to by 8 December.

Mr Andries Cronje, Chief Director: Mineral Regulation at DMR, stated that failure by an applicant to submit requisite documents resulted in their application being rejected. There were problems in the MPRDA scenario regarding meeting the deadlines but the One Environmental System  will result in more days being earned to achieve the deadlines that were difficult to meet because you get the initial reports right from the first day. There is a vast improvement in the ability to achieve this timeframe.

The 35 people and the 31 people are not necessarily the same. The 35 people are additional to the 69 we had and are required to help in processing the more intense system. The 31 people who have gone for training include senior managers, people with varying higher education qualifications in order to help with enforcement and this is the same process that Water Affairs and Environmental Affairs use when training new officers. The two must not be linked to each other.

The constitutional challenges were initially identified by the Department of Environmental Affairs and probably have to do with the issue of competences between the national and provincial levels. For example, air emission licences are currently the competence of local authorities but the Department of Environmental Affairs is also involved hence the need to have such issues resolved.

There are certain catchment areas that water affairs is dealing with where they cannot or do not want to give a general authorisation. In the case of a prospecting right, it will normally be dealt with in terms of a general authorisation which will basically mean that one does not need to go through the whole process of getting a water use licence. But there are certain catchment areas which are sensitive in terms of water scarcity and in such cases a full water use licence process would have to be done.

DMR is ready to implement the programme today if need be and we are certain of meeting the 8 December deadline for implementation. Of the 31 people being trained, two are white and the balance between men and women is about 50%.

If there is a deviation from this alignment process, the departments concerned, through their respective Ministers, would have to resolve it. The water use licence could not be applied for before the mining right was granted and there were no clear timeframes. The One Environmental System  has streamlined this in that the notice of application for a water use licence must be lodged together with the environmental impact authorisation and that initiates the process which only used to start afterwards. Water Affairs have committed to reaching a decision by the 300th day. There may be exceptional cases where authorisations cannot be considered timeously but generally by the 180th day it would be known if the water use licence will be granted.

Mr Mosa Mabuza, Deputy Director-General: Mineral Policy and Promotion at DMR, responded that the migrant labour system remained a scar on the industry but there were concerted efforts and work was being done to completely do away with the migrant labour system. The President-led task team is particularly focused on working with DMR, other affected departments, the industry and organised labour so that under the auspices of this framework, one of the key focus areas of the framework agreement is to do away with this scar.

In terms of current legislation employing the first-come first-served approach, there is no basis for the department to deny an application if it meets the minimum requirements. If there are 4 000 applications received in Mpumalanga and all of them meet the minimum requirements, DMR would be in breach of the law if it did not process the applications and grant them. It is precisely for this reason that DMR has reconsidered the first-come first-served approach and introduced the current Section 9 to add the "sustainable resource management" construct. The contradiction inherent in what seems to be excessive issuing of licences and what is being proposed as a measure of introducing sustainable development and resource management demonstrates the gravity and complexity of the issues that DMR is faced with. DMR is making concerted efforts to ensure achievement of sustainable development.

The current water use licence legal framework does not provide for an interface between the work of DMR and the issuing of water use licences. Thus it is intended to streamline the processes through the One Environmental System. Information relating to water use licences is administered and kept by the Department of Water and Sanitation under the current legislation and DMR could seek that information from that department.
 
Derelict and Ownerless Mines: update by DMR
Mr Mosa Mabuza, DMR Deputy Director-General: Mineral Policy and Promotion, stated that mine rehabilitation enforcement has been part of the mining regulatory framework since 1991. The MPRDA sought to effectively address mining environmental issues. There are currently 4 378 verified derelict and ownerless mining sites and 1 717 mining sites yet to be verified in the country. The State has so far rehabilitated 18 asbestos mining sites in Northern Cape and Limpopo; and at least 145 dangerous mine sites have been closed in Gauteng, Mpumalanga and Limpopo.

Some of the challenges in rehabilitating and closing these mining sites include the need for significant financial resources in excess of the annual financial allocation to DMR, security challenges in areas where illegal mining activities are taking place and the re-opening of previously closed mines which poses repeat closure challenges and impacts negatively on the allocated budget. However, the additional financial allocation has enabled the ramping up of the annual target of implementation to 50 sites annually. It is expected that the database of derelict and ownerless mines will be concluded in the next two financial years. DMR is exploring other meaningful mechanisms to optimise the management of derelict and ownerless mines and mine sites in order to mitigate inherent risks and to ensure that responsible parties are brought to book.

Discussion
Mr Esterhuizen (IFP) asked why most of the 90% of the mining licences were issued in the last ten to 15 years only. Why are there no consequences for such licences on unattended mines that stopped working to repair the immediate area around the mine? Is DMR passing over the responsibility to close the mine to the licensees? What happens to the labour that used to work on unattended mines?

Mr Z Mandela said the Committee had just returned from an oversight trip to Johannesburg, Gauteng Province regarding illegal mining and expressed concern that some of the mines closed by DMR were being re-dug, thereby posing a danger to people. What is DMR doing to ensure that those mines are sealed and closed completely? How is DMR ensuring that land surrounding the closed mines is rehabilitated so that it is not destroyed by illegal mining operations? Who does DMR take to task in terms of accountability for the proper closure of these mines as government cannot continue rehabilitating the land around these mines? Is it possible to have the mining companies or owners of the land being made to do this, considering that studies have shown that most of this land is privately owned?

Mr H Schmidt (DA) said there was an impression that obtaining a closure certificate following the 2002 MPRDA is very difficult. As a way to possibly dispel or confirm this impression, how many closure certificates have been issued since 2002 and why? What is the current figure regarding liability for closure of these mines? Who is disallowing DMR access to sites such as national parks? Are there illegal mining operations that could possibly be considered for legalisation, taking into account various factors?

Mr I Pikinini (ANC) referred to the issue of public participation mentioned in slide 4 of the presentation and asked if it was for mere consultation or a requirement. How is DMR dealing with the challenge of being denied access to some of these mines as well as social impact plans? Mines should be contractually bound to close the mines properly when the need arises. Employment of personnel should not just be about compliance but about achieving a turn-around and synergy is required to this end.

The Chairperson expressed concern that probably the magnitude of the problem at hand was being underestimated and the Committee needed to think more outside the box by looking at what can be done as opposed to just asking what was being done. Perhaps the Committee could help in coming up with a solution going forward.

Mr Mabuza answered that it was not clear what the 90% of licences question related to. There is a slight difference between mines that have stopped working, and derelict and ownerless mines. In the case of the latter, operations would have ceased and there would be no employees on these sites. Therefore, there is no labour force to talk about at those mines. Leaving these mines abandoned poses a major risk as was explained in the presentation. Illegal mines are a big problem partly because of the huge potential for reclamation of minerals. There are also cost implications to closure of some of the mines. For example, there are several shafts that run through Gauteng which would cost more than US$1 trillion to close.

There are multiple risks posed by these mines such as shallow shafts. Sometimes the illegal miners do not even blow the sealing DMR puts on closed shafts. They simply dig a shaft next to the sealed one and gain access to the closed shaft. DMR is a participant in the security cluster that deals with illegal mining because solving this problem must be done through the security authorities. DMR is also working with the Council for Scientific and Industrial Research (CSIR) to assist with the type of material that can be applied in those areas that are of high risk because illegal miners have access to explosives. Good progress has been made with the CSIR who have informed DMR that there is material which cannot be disintegrated by explosives but DMR has yet to test these materials.

The current law places liability for closure of a mine on the operator thereof but historically the trend is a bit cloudy and DMR continues to work on this. It would revert to the Committee in due course with a considered response. A closure certificate was not meant to be issued anyhow. However, it often happens that operators who do not want to do the work ask for a closure certificate and if not granted, they rush to the media. DMR will not relent in this area; a closure certificate will only be issued when a mine has been closed properly to the satisfaction of DMR. Unfortunately, there are not many instances where closure is done as well as is prescribed.

DMR has a joint mine rehabilitation programme that is deemed to be the best in the world and has attracted several PhD students from around the globe to undertake research. There are positive areas to be learned from it and negatives to be worked on. The number of closure certificates issued is not immediately available but there are too many people who think a closure certificate is about submitting an application and getting it.

The R30 billion was the original estimate of liability but the figure is now estimated to have more than doubled. This is an estimate and DMR will come back to the Committee with a more accurate figure. The budget of DMR used to be about a  R52 million annual allocation and over the MTEF an allocation of R156 million has been made. The bulk of the sites where access is denied are in the national parks. Where the sites can contaminate river systems or are close to communities, DMR is intervening to obtain access.

Closing Remarks
The Chairperson reiterated the need to assist in coming up with solutions on the issues and challenges identified in the presentations and discussions.

The Committee then discussed other matters concerning committee business.

The meeting was adjourned.