Department of Mineral Resources 2019/20 Annual Performance Plan; with Deputy Minister

NCOP Land Reform, Environment, Mineral Resources and Energy

09 July 2019
Chairperson: Ms T Modise (ANC, North West)
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Meeting Summary

The Deputy Minister advised the Committee that the process of merging the two departments – Mineral Resources and Energy – would be completed by next March. She stressed the need to achieve turnaround times for issuing licences so that the Department created a conducive environment for investors.  There were still a lot of deaths and injuries at the mines, especially those that had been sold on, and the Department would undertake further research to establish if there was a correlation between these transactions and the increase in health and safety incidents at these mines. However, it did not have control over the accidents within the mines themselves.

The Department said it wanted to facilitate the participation of black industrialists as part of the priority for economic transformation. It would also ensure skills development by implementing the mining sector skills plan. Housing in the mining sector was a very important issue, and it was working with other sector departments, like Human Settlements and Water and Sanitation, to improve conditions. Where the Department was trying to curb illegally mining, it would need the support of the South African Police Service (SAPS), because these were crime scenes. It was important for the Department to implement all mineral-related legislation, in partnership with law enforcement.

The Chairperson was concerned that the reduction in the budget and staff numbers set down for 2020 would directly hinder the Department’s ability to meet its targets, which in turn would affect job creation -- a priority raised by the President in his State of the Nation Address. Members asked how the Department was going to resolve the controversial issue of mining exploration in Xolobeni in the Eastern Cape. They were told that the Department would be taking action to recover the three bodies trapped underground since the 2016 Lily Mine disaster

Meeting report

Department of Mineral Resources presentation

Ms Bavelile Hlongwa, Deputy Minister: Department of Mineral Resources and Energy (DMRE) said the Department currently had two directors-general, but it was in the process of merging two Departments into one, which would be completed in March 2020.

She stressed the need to achieve turnaround times for issuing licences so that the Department created a conducive environment for investors.  Regarding health and safety, there were still a lot of deaths and injuries in the mines, especially those that had been sold on, and the DMR would undertake further research to establish if there was a correlation between this class of transactions concluded with the increase in health and safety incidents at these mines.

With regard to corporate governance, the Department had set targets for implementing a management action plan for both internal and external audits to avoid repeat findings.

The Deputy Minister referred to the controversial issue of mining exploration in Xolobeni in the Eastern Cape. Families were being torn apart, as some members of the community were in favour of mining, while others were against it.

Adv T Mokoena, Director General (DG): (DMRE) said that the Department wanted to facilitate participation of black industrialists as part of the priority for economic transformation. Through tools like the mining legislation and commitments in the Mining Charter, it would also stimulate further economic growth and improve the participation of previously disadvantaged people in the mining industry. The Department would ensure skills development by implementing the mining sector skills plan through the Mining Qualifications Authority (MQA) and administering of the Government Certificate of Competency (GCC).  

Housing in the mining sector was a very important issue, and the Department was working with other sector departments, like Human Settlements and Water and Sanitation, to improve conditions.

By integrating the social and labour plans (SLPs), the Department would see meaningful participation of the community in the economy, and also the challenges which they faced.

Where the Department was trying to curb illegally mining, it would need the support of the South African Police Service (SAPS), because these were crime scenes. It was important for the Department to implement all mineral-related legislation, in partnership with law enforcement.

He said that in order to achieve an ethical and developmental state, the Department would ensure sector procurement targets in terms of the Mining Charter for youth, women and people with disabilities. It also had a workshop session to promote ethical leadership to make Department personnel understand the challenges which the people faced.

Ms Sibongile Malie, Acting Chief Director: DMRE, said that the work of corporate services was that of providing support to the ministry, as well as the Department, and the Department was trying to come up with ways of achieving two outcomes -- equitable and sustainable benefit for mineral resources, and an efficient, effective and development-oriented Department. The Department had ten strategic objectives that it hoped would assist in achieving the anticipated outcomes. She described the strategic objectives, along with their measures and targets.

To achieve the contribution to skills development, the measures included 11 targets for mining career awareness in special projects, while 40 bursaries would be available for studies towards mining-related qualifications. The Department had identified a number of projects for sustainably developing vulnerable groups, and would implement a communication strategy for programmes with internal and external stakeholders. There would be a focus on providing adequate facilities for service delivery, while the strategic objective was to develop, review and improve internal processes, guidelines and procedures.

In order to provide professional and legal support and advisory services to the Ministry and the Department, it had targeted to provide timeous responses to opinions, appeals, inquiries, agreements and litigation, and aimed to achieve 100% for the percentage of adherence to service level agreements.

For the strategic objective of ensuring implementation of national strategies, the measures would be the number of files completed and submitted to the State Security Agency (SSA), the percentage of pre-employment screening requests processed, and percentage of service providers and contractors screening requests processed. Targets had also been set for gender equity and health and wellness programmes.

Other strategic objectives included ensuring compliance with legislation for human resources (HR) and occupational health and safety (OHS), attracting, developing and retaining skills, and promoting corporate governance.

Ms E Marabwa, Acting Chief Financial Officer (CFO):  DMRE, said the financial branch contributed to one outcome, which was an efficient, effective and development-oriented Department. It had identified four broad strategic objectives, which were to provide efficient services to internal and external customers, implement processes and systems, manage financial resources and promote corporate governance.

She said there were five measures for the strategic objective of providing efficient services to internal and external customers, which were simply to make sure that the Department improved turnaround times and to provide good service. There was a focus on the payment of suppliers, and although the target was within 30 days, the Department was currently paying within an average of ten days.

To manage financial resources, the Department was trying to implement its budget in the most efficient effective and economic way in order to return less than 2% to National Treasury at the end of the financial year. It would make sure that all planning processes were aligned with the procurement and demand plans, and comply with financial prescripts to ensure it did not incur any irregular expenditure.

The Department had set targets for implementing management action plans for both internal and external audit which were aimed at making sure it did not have repeat findings. It planned to implement management plans for risk assessments, and implement the information communication technology (ICT) governance initiative.

Mr Xolile Mbonambi. Acting Chief Inspector: DMRE said the mine health and safety branch had come up with six strategic objectives. Top priority was given to the promotion of health and safety of the mine workers. However, there were still high numbers of death and injury at the mines. The target was to reduce all fatalities and occupational injuries by 20 %, and to reduce occupational diseases by 10%. The Department would investigate all reported incidents and institute and complete inquiries, followed by remedial actions. It had a target of 80 % to complete all initiated investigations.

The Department was going to contribute towards skills development with a focus on education, skills and health. It would administer the government certificate, with the emphasis on scarce skills. It would also be developing and reviewing internal processes, as well as improving turnaround times, to promote corporate governance.

The Department would be conducting a total of 8 000 inspections throughout the country, and all the provinces had been allocated the number of inspections to be conducted. Gauteng, Mpumalanga and North West were the most challenging provinces when it came to health and safety issues, hence the high number of inspections to be conducted in these provinces. The inspections would also be on mine equipment, which was one of the major causes of fatalities. The Department would also conduct 396 audits during the financial year, with each province conducting 44 audits.  

He said the health and safety branch was required to come up with an annual report that addressed the health and safety of mine workers, and this would be submitted. Through a tripartite relationship, the Department would have communication on issues affecting the miners.

Ms Ditsietsi Morabe, Acting Chief Financial Officer (CFO): DMRE said there were six strategic objectives for mineral regulation. When looking at job creation, the Department paid attention to the number of social and labour plan (SLP) development projects completed by the mines, with a target of 120, the number of black undustrialist created through procurement, with a target of ten, and the number of jobs created through mining, with a target of 1 500.

To reduce the state’s environmental liability and financial risk, the DMRE looked at the percentage of statutory notices and orders issued to remedy inadequate financial provision.  This was to make sure that the state was covered so that should the mining company be liquated, it was in a position to use funding for rehabilitatation. The Department also used a measure of the percentage of statutory notices/orders issued to remedy environmental non-compliance.  

Discussion

Mr C Smit (DA; Limpopo) commented that the Department did not understand the difference between the two different Houses of Parliament and their roles. There should not be duplication of what happened in the National Assembly (NA) and the National Council of Provinces (NCOP). He urged the Department to look at the mandates in the constitution so that when it came to present information that was relevant in terms of the mandate of the NCOP.

He sought clarity on the Department’s goals and their alignment to the President’s vision. What would this Department do in this term to comply with the dream of President Ramaphosa in terms of economic growth and the National Development Plan (NDP)? How did it plan to establish a cohesive and active relationship with other departments, like Environmental Affairs, and how would it ensure that there was cooperation between the Department, industry and local government, paying attention to the economy, the spatial divide and human settlements.

He asked about economic transformation and job creation, commenting that both were important and could not be mutually exclusive for the drastic economic growth the country needed. How did the Department plan to balance these two?  How did it plan to capitalise on Southern African Development Community (SADC) trade and economic cooperation?

Ms W Ngwenya (ANC; Gauteng) said that the documents were bulky and the Department had not allowed enough time to go through them, but she was going to do her best in asking the questions. Were there any plans for the Department to absorb the 54 full-time bursary students, and if so, was this going to help with job creation?  Did it plan to address the challenges of mineral exploitation in Xolobeni?  She asked for a report with a breakdown by regions and provinces, of compliance issues, illegal mining and various interventions the Department was involved in. Did it have guidelines on how to deal with women’s safety in mining?

Mr M Nhanha (DA; Eastern Cape) raised concerns about safety and health, saying they were the least budgeted for, yet there were serious fatalities at the mines. What really was informing this kind of budgeting, considering the background of fatalities? He commented that the plan to reduce fatalities by 20 % was a very difficult and ambitious one, but hopefully achievable. He commented that with regard to mineral regulations, it was important for the Committee to be advised of the number of cases lodged and the number of cases brought to finality.

He asked about the job creation and the transformation of the mining sector. How did the Department address job creation and transformation in the mining sector if a place like Grahamstown, with huge deposits of kaolin, was still poverty-stricken, with high unemployment and only one or two mines operating on a small scale? What was the Department’s plan to resolve and handle the situation at Xolobeni, and to ensure what happened there was brought to an end.

Ms N Koni (EFF; Northern Cape) expressed concern that Kuruman in the Northern Cape was rich in minerals, but the level of unemployment, extent of illiteracy and lack of development was alarming. There was illegal mining, and the Department was not doing enough to investigate and resolve these issues. The Department must also prioritise the locals for jobs as opposed to outsiders, as locals were always overlooked. She commented that the Department should look into the nationalisation of mines in South Africa, as this would solve a lot of the country’s problems.

 Mr S Mohai (ANC; Free State) commented that the government was responsible for the abundance of ownerless mines, of which there were more than 6 000 at present. He said that budget, human and capital constraints prevented further activities, and therefore it would take a longer period of time for the rehabilitation of these mine sites. What was the Department doing with its licensing and compliance activities to reduce the number of ownerless mines, and what was its plan to speed up the rehabilitation of the ownerless mines?

Mr A Nyambi (ANC; Mpumalanga) commented on the issue of the Department promoting opportunities for black industrialists, and said it would be helpful to have a breakdown of different areas showing how the people would be benefiting, as opposed to non-specifics. He advised the DG and Deputy Minister to avoid presenting duplicate presentations in both the NCOP and NA, because the Select Committee’s interest was mainly on the provinces. He asked what the relationship between Mineral and Petroleum Resources Development Act (MPRDA) and the Mineral Policy and Promotion (MPP) was.

The Chairperson asked how the Department was planning to increase its output if it was reducing its staff and budget. Was this not going to affect it? She expressed her concern at the number of miners who were constantly dying and getting trapped underground in mines. Would its investigations reduce the number of deaths?

She asserted that the Department did not take public participation seriously. It did not consider inputs from the people. It was not good when the Department had to go with the police to communities for public consultation. They had to align their policies with the communities so that there was a good relationship. Where were people from the North West province going to farm agricultural products when the Department was issuing mining licences on agricultural land?

The Department needed to take into consideration that there were local graduates equipped and skilled to work in the local mines, and should engage mine owners about that.  She also asked about mine ownership. Who owns the mines? Could this information be broken according to women, men, race, youth and people of disability?  

Department of Mineral Resource’s response

The Deputy Minister said that the best thing to do was to prioritise North West and Mpumalanga with regard to the issue of mines and employment, because the Committee had already highlighted this to the Department. There were three players in mining -- the Department was the regulator and does the oversight, and the mines do the operation.

Inside the mine sites themselves, the Department deals with organisations which it does not own, and that was why it struggles with mine health and safety. It would look into more stringent consequences for mining companies that do not address health and safety efficiently.

There needed to be a stronger common stakeholder engagement on the issue of licensing, where all stakeholders were all aligned on what needed to be done, how it needed to be done. Before licensing was granted, there had to be consultation and alignment of thoughts and minds between the communities themselves, the investors and the licensing company.  Regarding the rehabilitation of land, they would need to engage with the tourism department, and they would need to quantify what would provide more jobs and achieve added value. She suggested that the Department could even look at the possibility of co-existing with the Department of Tourism.  She said the 2016 Lily Mine tragedy, where the bodies of three miners still remain trapped underground, was a difficult issue that the Department had to deal with, and to make it worse, after the incident itself there had been several tremors through the area and the land had been very unstable. The NCOP, NA and the Department were all in accord regarding making sure that the bodies were recovered so the families had an opportunity to bury them.  

She said investment in the SADC area was affected by operational costs for beneficiation from the investors’ point of view. Both the price of electricity and fuel would influence their decisions when making a comparison with other places to invest with regard to profitability. The NCOP and NA, as interested parties, had to discuss ways they could reduce the price of electricity and fuel to attract investment.

There had been a discussion with the Department on the safety of women in mining with regard to drawing up targets and also involving the unions, so that both the Department and the unions were able to align and know what they were doing.  

She said the Department should take the advice they had been given and relook at the mandate of the Committee and try to respond properly on specific areas when they reported to the Committee.

Adv Mokoena said that to comply with the dream of the President, the Department would need to create an environment conducive for investment, and part of that was to look at its turnaround time for issuing licences. It was also pushing the inactive mines to start operating so they contributed towards economic growth. The Department had 60 new projects and anticipated 32 000 job opportunities from them, with an expected investment value of R110 billion.

The Department was working closely with the mining industry to assist in creating space for the 54 students who have been given bursaries. The Department could also absorb some of them.

With the Xolobeni matter, the Department would do a survey to find out if people were for or against the mining.

He said public consultation was considered very important by the Department. There was a regulatory process in place on what the mining companies needed to do when applying for their mining rights, and companies had to comply with the guidelines before the Department granted the rights.

The Chairperson said that due to time constraints, the Department must draw up answers for the remainder of the questions and make them available to the Committee by Friday.

She extended her gratitude to the Department for the presentation and congratulated them on their clean audit from the Auditor-General.

The meeting was adjourned. 

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