Mineral Resources Budgetary Review and Recommendations Report: Department response, with Minister

Meeting report

The Chairperson opened the meeting and welcomed all present.  He passed the condolences of all present to the two CGS staff members who passed away last Friday in a car accident.

1.    Presentation on BRRR

The Minister gave a strategic overview. He said that mining in South Africa must be competitive and meaningfully transformed. Investment must grow. Oil and gas must be liberated from the mining law and regulations to become a sector on its own. There is no confusion in the roles of DMR and the Department of Energy. DMR deals entirely with exploration and extraction of petroleum. Energy deals with processing. The new Energy Resource Plan is silent on uranium – when nuclear is the technology of the future. Mining is a most important department and the DMR is in control. He was concerned about the staff training since he arrived in the department and discovered that the potential is hidden. That is why the training and skilling is the priority.  There is a transformation task team that was formed for the mining charter implementation framework which is almost finished.  He indicated that the SLP is good on paper but often weak in practice. The department will create a new focused unit that will monitor the SLPs more frequently.

Adv Mokoena, the Director General gave responses in the presentation per programmes of the department and its entities on the issues raised by the Committee on the Budgetary Review Recommendation Report (BRRR) which was adopted on 17 October 2018.  He further reported on the latest update on the mining companies that are under business rescue practitioners.  In responding on the issue of Mintails, the DG said the department is busy looking at the matter and will give more information at a later stage to the Committee.

Presentation attached

With regards to the Women in Mining Strategy, the DG said that the Mining Charter includes provisions for the active participation of women in mining. In the view of the Department, the matter has now been sufficiently addressed.

No commitment was made regarding the finalisation of the Coal Policy which has been deferred due to a reprioritization of projects.

The Minister concluded that the policy on illegal mining is being abused. Small miners are expecting to be allowed to continue their activities. This is not correct. The intention is for people to be formalised – this means they will not simply be “legalised”. Informal miners will not be allowed to mine the way is being done currently. He emphasised that anything illegal is criminal and needs to be treated as such.  The Minister said he has gone a long way in building relations with the mining industry.  He alluded to the issue of Shiva mining and said it is complicated by IDC since they are shareholders and are wanting to close the mine. Workers in that mine have not been paid and IDC demands to sell all the equipment as scrap metal, which will unleash a looting spree against mines.

Members raised the following questions and concerns:

·       One of the members raised concerns from the colloquium in Parliament to which the PC on Mineral Resources was invited to the day before.  Members were not happy with the responses given by DMR on the One Environmental System. There is no indication that DMR has grip on environmental issues, compared to the Department of Environmental Affairs. The whole system has been in limbo for 4 years. There is no united approach between the departments, they are all over the show. The DMR has not issued its annual report on the Departmental EMP which has to be made available to the public.

·       Members were concerned with regards to SAMRAD that the department cannot give indication of the compliance of the mining companies (right holders) with the conditions of their rights. The excuses ring hollow and it appears the DMR is deliberately withholding compliance data. SAMRAD is clearly not providing the information needed by the DEA for its monitoring of environmental issues.

·       The Annual reporting on the Environmental Mineral Resource Inspectorate has to do more that present a few figures on percentage compliance. The DMR should please flesh out the report and  give examples, such as the top ten problem areas.

·       With regards to slide 22, Artisanal Mining. Is there a deadline on when the proposed research study  will be finalised and brought to the Committee? This is an area of chaos. Can the Minister apply some pressure or maybe to speak to Minister of Police.

·       On Slide 9. Staff training, seems to be not including senior management and top management. Please can the Department explain?

·       Slide 11. Internship and Experiential Learning is broken down by gender. How are they spread in terms of race and demographics? Are foreign nationals included?

The department responded as follows:

·       The Minister said that the Department has outlined how it is proceeding to audit its administration. Audits in four provinces have been completed. These were quite shocking as the depth of corruption revealed was unbelievable. When confronted, people resign, run for cover and disappear. There is a need to rotate the Regional Managers and senior staff from time to time to avoid relationships with mines and applicants in a region becoming too close and then corrupt. There is a need to deal with the issues systematically – even if this appears to be slow.

·       On the environment issue, the Minister responded that the pattern of working in silos in departments must be dealt with. Alignment is a serious issue that needs to be looked at. Sustainable development should be at the centre of mining.

The DDG on Mineral Policy added that when the process started in 2006, the idea was to get both laws to be amended at the same time. Now the Department of Environmental Affairs keeps on amending NEMA and does not refer to DMR to ensure the systems are in alignment. DEA are the ones who keeps on pushing forward the deadline for promulgation of regulations on One Environmental System.

The DMR said that the EA officials had failed to attend a joint workshop they organized, to review the shale gas regulations; the DEA do not meet the deadlines set in the inter-ministerial committee; they do not consult on any of the changes they make to NEMA (which has been amended almost annually), leading to ongoing clashes between differing time frames in the mining and environmental administration systems. Mines need a regulatory system that is standard and predictable over time – the chopping and changing of NEMA adds to the complexity of enforcement because the rules that apply to a particular mine will differ depending on the date at which rights were granted. The DMR submitted its comments on the financial provision regulations amendments promptly, months ago – It is the DEA that threatens the delay in implementation beyond Jan 2019.

She further said that the Departmental EMP will be out probably by next week. Will be gazetted soon. If there are shortfalls identified by the Committee, they can be addressed for next year.

·    SAMRAD. The CFO has explained the challenges with SAMRAD in detail in several previous engagements with the committee. There is a financing problem which is being addressed by spreading changes incrementally over several years. The DMR has individual records that capture all the information on each mine. The problem is that it cannot give integrated and summarised information that is reliable yet. The data has to be assembled manually. The Committee has asked DMR to put a measure of SAMRAD, but DMR has to make sure and performance indicator meets the SMART principles.

·    Research on artisanal mining is under way at present.

·    The internal bursary programme does not include funding for senior staff as they are paid enough to finance further studies themselves. Several members of top management are engaged in such studies, but this is not funded by the internal bursary programme.

·    Issue of working with Police. There should be an organised police unit that deals with illegal mining

·    Demographics on internships are dictated by the particular situation in South Africa, where young graduates do not have a network. The problem is if you don’t have “an uncle in the furniture business” you don’t get employed even if you graduate. The internship programme must not lose its objective of putting people into actual jobs. The programme is only looking at South Africans at the moment.

2.    Resolutions and observations

The conclusion was that the DEA and the DMR are not working together effectively on the One Environmental System. Political leadership is needed. Things are not yet better because of the OES – for the environment, for communities affected by mining or for mining investors.

The Committee welcomed the report of DMR, with its detailed responses on all the issues raised by the Committee in the 2018 BRRR. There is still work to do, but the DMR performs much better than many Departments in accounting to Parliament.

The Committee support staff should remind the Committee in the future of the targets and time frames the Department has committed itself to in the presentation.

3.    Consideration and adoption of Minutes of 07 and 14 November 2018

The Chairperson tabled the minutes for consideration and adoption:

·       Mr ZMD Mandela moved for adoption of minutes of 07 November 2018. Ms H V Nyambi seconded the adoption

·       Mr ZMD Mandela moved for the adoption of Minutes of 14 November 2018 with amendments. Mr I A Pikinini seconded the adoption.

4.    Announcements

·       The Committee received an invitation from the Minister to join him in the Oil and Gas Industry breakfast on 29 November 2018 in Cape Town.

5.  Adjournment

The meeting adjourned at 12 :00