DMR mine evaluation and licensing challenges; Council for Geosciences mineral resource mapping challenges

Meeting report

The Chairperson said the purpose of the meeting was to receive a brief from the Council on Geological Sciences (CGS) on the effect of funding on its mandate for the Expanded Mapping Programme. The Department of Mineral Resources (DMR) would also report on the progress made in meeting the challenges identified in its administration processes. It was vital to positively realise the objectives of the country and examine if the systems in place responded to mining challenges. The CGS would need to conduct a research study on how it could mitigate the effects of seismic events and ground falls, because in recent times lives had been lost.

Council on Geological Sciences (CGS)

Mr Mosa Mabuza, Chief Executive Officer (CEO): CGS, said the Council was going through a transitional phase, and had suspended some of its mandates because of limited funding. The CGS was the custodian of geotechnical research and information, and the brief would be on its core values, its strategic focus areas, the alignment of its work to governmental goals and the National Development Plan (NDP). The brief also included its challenges, the benefits of the Expanded Mining Programme (EMP), an analysis of its finances, and its recommendations.

The challenges facing the CGS were the reduction in the country’s expenditure for global exploration, which had led to a drop in the country’s ranking to outside of the top ten exploration countries. Others were the inadequate coverage of published geological maps and limited high resolution geophysical and geochemical data. The CGS therefore proposed to have multi-disciplinary maps on the scale of 1:50 000 as against the initially published maps of 1:1 000 000, which would address the national imperatives in the country. The national imperatives were infrastructure development, food security, upstream petroleum exploration and mining, security, environmental health, hydrogeology, geo-hazards, carbon capture and sequestration. The benefits of the EMP were the attraction of investment due to increased mineral exploration and mining, improved ocean governance and data management, sustainable food security, improved predictions of geo-hazards, safer water to communities, easing of the disease burden, rural and socio-economic development due to the exploitation of minerals, and accessibility of data to junior miners. He described the relevance of the CGS to state programmes and gave examples of its programmes of national importance.

Analysis of the finances of CGS showed that baseline allocations were below personnel costs, so there were shortfalls on personnel costs as well as operational costs. He presented a summary of the financial needs to fund the three years of the EMP valued at over R1.8 billion, and expressed appreciation the support of the Committee, the DMR and the Department of Science and Technology (DST) in securing 22% of the funds needed for the EMP within the three years. The total required funding for CGS for a ten year projected period was R20 billion, but an amount of R1.82 billion had been requested for the medium term expenditure framework (MTEF) period from 2018/19 to 2020/21. Preliminary allocations for the three-year MTEF period was 22% of the requested R1.82 billion, which made it difficult to plan, employ the required capacity and deliver when funding was not guaranteed. However, the CGS welcomed the preliminary allocation of 22% of the funds, and had shifted from excessive commercial exposure and was now focused on its legislative mandate.

He highlighted the advantages of EMP for the country and said that research and development in geoscience was long term. The CGS recommended an increase in the baseline allocation to recruit and retain skilled geoscientists, to ensure its mandates were achieved.

Discussion

Adv H Schmidt (DA) remarked that the mandate in Section eight, under the suspended mandates, did not appear to have financial implications, and asked why it had not been carried out. He observed that CGS had not done much work on predicting seismic events, which was a major challenge in the country, and asked it to inform the Committee on the latest developments in predicting seismic events. He expressed concern over whether the preliminary allocation of 22% of funds would assist it in meeting its targets. He asked if the CGS had made another approach for funding to National treasury.

Mr J Lorimer (DA) asked why the CGS did not consider mapping to a scale of 1:100 000, given the budget constraints. He cited the example of Australia, which had not reached the mapping level of 1:50 000 yet. He asked if the CGS had considered that uranium was mined in the areas mapped for shale gas production. What was its opinion on the accessibility of geological data?

Mr A Pikinini (ANC) asked for updates on the shale gas project, and whether CGS had considered geological mappings at other scales, apart from 1:50 000.

Mr M Matlala (ANC) asked the CGS to clarify if it was spending part of its budget allocation on mine closure. He also asked it to clarify if the DMR, the government or initial mine owners were responsible for closing or rehabilitating derelict and ownerless mines. He proposed that the Committee get a report on mine closures from the Minister.

CGS Response

Mr Mabuza said that all the suspended mandates, including the mandate in Section eight, needed financial commitments, and pursuing these suspended mandates could lead to the insolvency of the CGS.

Artificial intelligence was being used to assist with the prediction of seismic events, in collaboration with DST. The DST was assisting with two doctorate researchers, and results were expected by the end of March, 2018. Collaboration with the Mine Health and Safety Council to collect data on health and safety was on-going. This was vital, because mining activities were on-going in the country, and data on seismic activity and ground falls received would be helpful.

He acknowledged that the 22% preliminary allocation funds was small, but the CGS was grateful and excited because it would give it the opportunity to invest more on its mandates. There was a possibility of getting more of an allocation, since it was not final.

It was expedient to get to the scale of 1:50 000, because some of the countries -- neighbours like Namibia -- were already mapping to the scale of 1:50 000. Australia -- the country mentioned by Mr Lorimer -- had a ten year plan in place to attain the scale of 1:50 000. South Africa could plan to achieve this scale in a few years, but should be mindful that in a few years the scales could drop lower.

The CGS intended to dig one deep borehole and three shallow ones for shale gas by starting with the small ones first. It had considered the uranium extraction, and was not shifting the boreholes from the original site. He accepted that the CGS had not been able to make data accessible to junior miners, but it had a system of making consistent information available and this was on-going. It hoped to combine the availability of quality potable water with its shale gas project, and the shallow boreholes would be dug before the end of the current financial year.

He indicated that mine closures and rehabilitation was the work of the DMR, but the DMR had asked the CGS to perform the duty on its behalf. The CGS was conversant with its role, and closed mines when the danger of accidents was high. However, it was examining the liabilities in terms of land ownership. Its allocation of R43 million to close and rehabilitate mines was not much considering the number of mines affected.

Ms Michelle Grobbelaar, Acting Executive Manager: Corporate Shared Services, CGS, said the Council collaborated with the Mine Health and Safety Council to put up desk networks to obtain quality data on health and safety. It was presently doing quality checks on the reliability of the data. The next step was to prepare a decent database that could work with artificial intelligence.

Ms Refilwe Shelembe, Acting Executive Manager: Geological Resources, CGS, said that the 1:50 000 scale was sensible mapping for geoscience activities since it had multi-disciplinary uses. The CGS had not started digging for shale gas, but was monitoring the likelihood of potable water or identifying shale gas. The process was on-going and progress was being made.

Mr Mabuza added that the CGS was already collaborating with the Mine Health and Safety Council to cite seismic monitoring offices, to collect data to enhance the predictability of seismic events.

The Chairperson said that the Committee would still revisit the seismic events at a later date, because it was still not convinced of the CGS’s preparedness. The CGS would therefore still need to conduct a study on seismic events and ground falls. He asked it to clarify in a written report if it would be able to achieve some of its intended objectives with the 22% preliminary allocation funds. He corrected the impression that the CGS was not an exploration entity, and said that it was a state public exploration entity.

Mr Schmidt asked if the CGS was carrying out its programme on seismic activity and geological mapping to the scale of 1:50 000 without the involvement of other collaborators. He proposed collaboration with other entities, if there were none presently.

The Chairperson said he was aware that the CGS already had collaborations with other state entities, such as the Mine Health and Safety Council.

Department of Mineral Resources (DMR)

Adv Thabo Mokoena, Director General (DG): DMR, invited Ms Seipati Dlamini, Deputy Director General (DDG): Mineral Regulation, to present the brief.

Ms Dlamini said she welcomed the brief from the CGS, particularly the gains of geological mapping on the scale of 1:50 000. Highlights of the brief were the transparent steps followed to process an application for mining rights, using the South African Mineral Resources Administration Database (SAMRAD) based on Section six of the Mineral Resources and Petroleum Development Act (MRPDA), the decision taken to improve SAMRAD using the integrated management information system, the status of implementing the new integrated management information system, and the status of applications for mining rights in each province. She also indicated the country of origin of foreign companies interested in the mineral sector and their specific mineral interest, and a comparison of the proportion of rights issued to foreign companies and South African companies.

She described the administrative challenges of the DMR, its intervention mechanisms and some recommendations. The DMR had decided not to enhance SAMRAD, but incorporate it into the new integrated management information system. The decision had been taken because it had experienced downtimes on the SAMRAD system. The DMR was currently in the process of investing in an integrated management information system that would be developed within a five-year period in three phases. Phase one, on process mapping and enterprise architecture, would be advertised by the end of November, 2017. Phase two was on infrastructure enhancement, and phase three was on system procurement and implementation.

An analysis of the status of applications showed that Mpumalanga had been granted the highest number of prospecting and mining rights, as well as mining permits. Foreign investors interested in the mining sector were North America, Europe, Asia and Australia. The countries were interested in energy, and industrial and construction minerals and metals.

The administrative challenges were lack of funding to provide for the required human resource capacity to implement the Departmental mandate, the high volumes of applications received in relation to the human capacity to process within the stipulated time frames, which resulted in delays in processing and finalising applications, the lack of financial capacity to provide for the technology needed to monitor and evaluate compliance with the Act, the lack of integration in the management of mining data, and the high costs associated with lodging applications. The technical nature of the content of application requirements, the inability of historically disadvantaged South African (HDSA) applicants to comply fully with authorisation requirements within stipulated times, and landowner’s denial of applicants to prospect/mine on their properties, were identified as challenges. The DMR recommended that HDSA applicants be assisted to comply with requirements, even if the process exceeded the stipulated time. Other DMR recommendations were the need for HDSAs to engage with the CGS and MinTEK for technical assistance, the need for a financing mechanism to assist HDSA applicants, and the use of the provision of Section 54 of the Mineral and Petroleum Resources Development Act (MPRDA) to mediate over disputes where landowners denied access to properties.

The DG said that the brief had been based on the Committee’s request, and the DMR would expedite action on procuring an integrated management information system to assist HDSA s to benefit from mining rights.

Discussion

Mr Pikinini (ANC) observed that it was good to improve on SAMRAD, because it was not user friendly. He asked the DMR to give the Committee a plan for integrating it into the integrated management information system.

Ms H Nyambi (ANC) asked for clarification on why rights were refused.

Mr Schmidt (DA) observed from the brief that the SAMRAD system was not efficient, and asked the DMR if it was still part of its systems or if it would be incorporating it into the integrated management information system. He asked for the timeframe for completing the installation of the new integrated management information system. Had the number of applications decreased or increased over the years? How were outstanding applications calculated? He also asked for the number of applications that were outstanding, to motivate the funding for vacant positions. He asked if supplier chain management guidance was in place for HDSAs.

DMR’s response

Ms Dlamini said that SAMRAD would be incorporated into the new integrated management information system.

Applications lodged were either accepted or rejected within 14 days, based on the provisions in Section four of the MRPDSA Act. The accepted applications were processed further and a grant was given within 360 days, based on the fulfilment of requirements. Some of the requirements included environmental impact assessments (EIAs), 26% compliance with Broad-based Black Economic Empowerment (BBBEE), a guarantee of HDSA rehabilitation and environmental authorisations. Grants may be rejected if the requirements were not met.

She accepted the point on supplier chain management guidance of HDSAs, and made a commitment to look into it.

The timeframe for procuring the integrated management information system was five years, and the DMR would present the plans to the Committee.

The DMR was concerned that applications for mining rights had reduced over time, but was confident that applications would increase once the CGS completed it 1:50 000 geological scale mapping. She agreed with Mr Schmidt that outstanding applications could be calculated in the manner he suggested, but remarked that some applications were withdrawn before the end of the 14-day period. Also some applicants re-applied and did not need to go through the initial 14-day period after getting their requirements completed. Therefore the outstanding applications could not be calculated based on the manner that had been suggested.

Ms Rofhiwa Singo, Chief Financial Officer (CFO): DMR, said that the new integrated management information system had been initiated based on the Council for Scientific and Industrial Research’s (CSIR’s) assessment of the DMR’s processes, especially SAMRAD. The CSIR had indicated that the DMR needed a backup, firewalls and servers for accessibility as an immediate intervention. It had also informed the DMR that SAMRAD could not be extended on its own, so a new integrated management information system was proposed. Phase one would be advertised by the end of November, 2017 while other phases would follow in a five year plan.

The Chairperson said that there would be engagements to determine what could be done to assist HDSA applicants. He commended the DMR for the synergy it had with its entities.

The meeting was adjourned.