Committee Report on Mineral Resources Budget

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Mineral Resources and Energy

13 April 2016
Chairperson: Mr S Luzipho (ANC)
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Meeting Summary

The Portfolio Committee on Mineral Resources met to consider the Draft Report on Mineral Resources on the strategic plan and budget vote 29 of the Department of Mineral Resources for the 2016/2017 Financial year.

The Chairperson quickly took Members through the report, stopping only where there was a point raised by Members or when a change had to be made. Many of the amendments were minor including re-wording and typos.  He touched on the issue of the Lily Mine that remained unresolved and that investigations were still underway.  One of the reports received was the fact that the three alternative shafts would take more time to have workers recovered, and that the process was a cumbersome one.  One of the things the Committee had done was to communicate with the Department.

The report was adopted.

Meeting report

Draft Report of the Portfolio Committee on Mineral Resources on the Strategic Plan and Budget Vote 29 of the Department of Mineral Resources for the 2016/2017 Financial Year
The Chairperson tabled the report for consideration. He took Members through the document and invited them to make comments where necessary. He requested that they go through the document section by section rather than page by page. 

Members went through the report and not many comments or corrections were made.

Mr Nkosi Z Mandela (ANC) commented that the report was a true reflection of what was said.

The Chairperson asked for comments on Observations.

Under Observations the sentence read: “Ex-mineworkers are seriously affected by the inferior compensation payments due to them under the present law as well as the administrative chaos that still surrounds the Compensation Fund managed by the Department of Health. An indaba on compensation laws has been part of the government policy for the last five years, however, neither the Department of Health not the Department of Labour have taken the appropriate steps to address the above issue”.

Ms M Mokause (EFF) commented that she did not attend the previous meeting.  She was concerned that the Department had been turning a blind eye on this process, and people continued losing lives and others were still waiting for compensation. This could not be prolonged; something should be done as a matter of urgency. 

The Chairperson responded that Mintek were the entities that had been driving the programme of rehabilitation for mineworkers who had been affected. When you looked at the compensation from the Department of Minerals and Resources it was far less than what mine workers should be receiving from the Department of Labour. 

The fund in Mining was completely different than the fund in Labour, and the issue now was about the Custodianship.  Labour, Health and Mineral Resources ran the programme.  He suggested that the meeting should ensure that the Indaba looked into this area.  The Chairperson’s concern was also the issue of language barrier, adding that the impression might be created that there was a competition, and there was no competition. 

He appealed to the meeting to note under Observations, the areas identified by the Financial and Fiscal Commission, which could assist in using them as a benchmark, even for roles as oversight as the authority department.

Under the last point on Observations the sentence read: “Despite its concerns, the Committee notes that the Department of Minerals and Resources performs a great deal better than many other government departments”.

Ms Mokause begged to differ with the statement, stating that under the leadership of Minerals and Resources it was seen the mining companies were involved in tax avoidance scandals and that nothing had been done. She made an example of Lonmin Mining Company; that it had been all over the news and government had not dealt with them accordingly.  Parliament needed to pass legislation on this; and she questioned the role of government in those licensed mines who did not transgress. 

The Chairperson’s response was that currently there were three main committees dealing with the question of tax erosion.  The question that usually arose was whether tax was a duty of the Finance department as it also included the South African Revenue Services.  The three committees undertook that work.

The Chairperson asked the meeting for more input or comments on Recommendations.

Under Observations the Members discussed a point. The sentence read: “The committee was concerned that, despite the declared intention of the Department of Minerals and Resources to protect and enhance our environmental assets and to ensure compliance with environmental legislation, the Department has significantly reduced the number of environmental verification inspections in its performance targets”.

Mr J Lorimer (DA) commented that it was not the reduction of inspection but the inadequate monitoring of environments.  No imminent regulation has been suggested for the Diamond Trader and that it needed to be recommended and done fast as it had been discussed for a long time.

Ms M Mokause added on recommendations that government needed to deal with tax avoidance.

Ms M Mofolo (ANC) responded on the issue of mining companies not paying the South African Revenue Services; it was the duty of the Department to collect documents needed before applying for Mining rights. She added that if the Department collected these documents the Committee would not be discussing tax issues. 

The Chairperson noted the Members’ concerns and added that the Committee should remember the two areas raised, namely the Mineral and Petroleum Resources Development Act and Mine, Health and Safety issues.

In response to Ms Mofolo, the Chairperson said the issue of non-compliance was speeding up the finalisation of the Mining Charter, and that the reality was that lack of its finalisation was a challenge, and that it needed to be done for the sake of certainty.  There was word that it would be done by end of April 2016, and that it was going to be quite a protracted process on its own since Stakeholders needed to participate in the process of drawing it. 

Mr Lorimer requested an addition on the Recommendations that “We recommend the Department of Minerals and Resources to fast track or up their work rate” as they needed to work faster.

Ms Mokause commented recommendations had been made, and the Committee did not agree with the report as she was not a part of it, and there were a number of issues she did not agree with.

The Chairperson raised an issue of the Minerals and Petroleum Resources Development Act (MPRDA) was that the referral was to the National Council of Provinces and what it sighted was the Constitutional matter. 

He further added that the President’s reservations were the issue of International tools of trade, and that at face value the Committee needed to get legal opinion, and Parliament has never endorsed that bill.  This now had to be referred to the National House of Traditional Healers, and there were issues of constitutionality, rules and regulations of parliament. 

Furthermore, The Chairperson pointed out that the Committee would only see that Bill when the House of Traditional Leaders presented it and the NCOP would run its own processes.

The report was adopted and no objections were made.

Adoption of Minutes dated 5 April 2015

The Minutes of past meetings were adopted.

By consensus of the meeting Members agreed that Matters arising be adopted with the report.

The meeting adjourned.




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