In a virtual meeting, the Select Committee was briefed by the Department of Mineral Resources and Energy on its 2020-2025 Strategic Plan and Budget Vote 34/Annual Performance Plan (APP) for 2020/21. Members heard the Department was merged on 29 May 2019 after the President’s announcement of the reconfiguration of government departments. The primary objective of that exercise was to ensure that there is sufficient capacity for government to respond to strategic objectives that were derived from the National Development Plan (NDP) as well as the Medium-Term Strategic Framework (MTSF).
Members were concerned about the safety of workers against COVID-19 in the mining sector and asked why no testing was done and who was responsible for the testing and the safety of the mine workers; why the resolution of reported incidents of corruption was not on a 100% and about the safety and security of women in the mining sector with regard to gender-based violence as a priority for government. The Minister explained that during the national lockdown, it was agreed that mines would open in phases, and once they have been open, they would adhere to the rules of social distancing, and every worker would be screened and tested, of which, positive cases were only found after the tests were done before the workers entered the workplace. All the cases that were discovered in mines all over the country have been quarantined.
Members asked about the rehabilitation of mines and the criteria that was used to select the mines that would be rehabilitated. Members heard that the Department has an approved strategy for the rehabilitation of derelicts and ownerless mines and within the strategy there is set criteria based on scientific studies that the Council for Geoscience took for the Department. The criteria use a ranking system which is based on two aspects, which are the health risk on nearby communities as well as physical safety. Based on the health risks and knowing that asbestos was officially banned in South Africa because of the health impacts it has on human beings was why the Department has prioritised asbestos mines mainly in Limpopo and the Northern Cape Province. In terms of physical safety, the Department ranked high mine shafts that were left open on gold mining areas and those are based mainly in Gauteng, East Rand and the West Rand and in the Mpumalanga area around Barberton. The Department was following the ranking criteria because the longer they left asbestos un-rehabilitated, the more the communities surrounding those areas are at risk of exposure.
Members asked the Minister to indicate the impact of the expected COVID-19 budget cuts on the Department’s work, especially on service delivery, and what plans has the Minister made available in order to combat the impact of COVID-19 on mining operations and energy production. The Minister explained that there is no alternative budget; rather the Department is planning in accordance with what it has been allocated but will be engaging with the National Treasury on prioritisation of the budget. He stated further that the Department understands that it is important in the recovery of the economy of the country, and therefore is planning on a recovery plan that will also be useful post-COVID-19, as the goal is not to bring the economy back to where it was pre-COVID-19, but rather to improve it further.
Members asked whether South Africa will be restarting the procurement of a nuclear reactor or if the country will continue with the Russian Nuclear Plant, and how the new multi-purpose nuclear reactor that will be procured by 2024 be funded; whether the Department is making progress with regard to meeting with the United Nations’ Sustainable Development Goals of extending access to electricity for all; and when the implementation of a legislative framework against illegal mining could be expected. The Committee was pleased to hear that regarding allocations for electricity in Limpopo, the allocations for both the solar water heater programme and electrification programmes were both complete based on the applications from municipalities, where the Department invites municipalities to apply for the services, and delivers upon application.
Department of Mineral Resources and Energy: Strategic Plan briefing
Adv Thabo Mokoena, Director- General (DG): Department of Minerals and Energy (DMRE), said that the presentation contained five sections that ranged from part A to Part E. He stated that he would not cover each section of presentation in detail, as the Department has provided the Select Committee with a consolidated copy of the presentation. He then provided a summary of the first section of the presentation (Part A), which entailed an executive summary of the entire presentation. The DG said that the Department was merged on the 29th of May 2019 after the President’s announcement of the reconfiguration of government departments. The primary objective of that exercise was to ensure that there is sufficient capacity for government to respond to strategic objectives that were derived from the National Development Plan (NDP) as well as the Medium-Term Strategic Framework (MTSF). The DMRE has a responsibility to ensure provision of secure, sustainable and affordable energy as well as promoting and regulating minerals and minework. The mandate of DMRE is derived from the Constitution, and its existence is premised on its vision of becoming a leader in the transformation of South Africa’s economic growth agenda through the sustainable development of the mining and energy sectors. He also stated that energy plays a fundamental role in the economy and that the energy sector is a key enabler for the attainment of national policy imperatives such as those in the National Development Plan.
The DG stated that the DMRE has translated the provisions of the Integrated Resource Plan 2019 (IRP2019) in its responses to challenges the energy sector faces, and that for medium and long-term outcomes, the IRP2019 technologies will be implemented, while the updating and processing of the DMRE’s regulatory frameworks will be accelerated to enable these interventions. This includes the enablement of industry to invest in the energy supply mix through self-generation. The IRP2019 states that preparations must commence for the nuclear build programme, adding 2 500MegaWatts as this is a no-regret option in the long term. The DMRE will commence immediately with the procurement process to ensure the security of energy supply, and is considering Small Modular Reactors to take into account the pace and scale that the country can afford. The market will be tested for robust casting and funding options towards nuclear generation, and the development of the roadmap for the 2 500MW Nuclear New Build Programme will be commencing soon, while an oversight monitoring plan for the Koeberg Life Extension Programme is also being developed. Cleaner coal technologies, including Carbon Capture, Utilisation and Storage (CCUS) will improve coal’s sustainability as a primary energy source.
The DG stated that the development of the gas market as an alternative source of energy will be pursued to meet limited and depleting gas supplies, while the sustainability of the energy distribution will be improved by reviewing the regulatory framework and industry structure. These actions collectively will boost employment and additional investment prospects, as well as meeting the requirements for lower carbon emission which will contribute to economic growth. The mining industry is critical for economic growth, job creation and transformation objectives of the country, and research in the mining and energy sectors is critical to support targeted outcomes.
The DG then provided a summary of the different sections of the presentation starting from Part B: 2020/2025 Strategic Plan, Part C: 2020/21 Annual Performance Plan, Part D: Budget 34 Allocations, and Part E: Provincial Allocation.
Mr A Arnolds (EFF, Western Cape) expressed his concern about the safety of workers against COVID-19 in the mining sector. He asked why there was no testing done and who is responsible for the testing and the safety of the mine workers. He then referred to Programme 1: the planned targets of the Department and asked why the resolution of reported incidents of corruption is not on a 100%. His second question was on the safety and security of women in the mining sector with regard to gender-based violence as a priority for government, and how the implementation process of the guidelines would work. He also asked a question regarding the rehabilitation of mines and the criteria that was used to select the mines that would be rehabilitated. He also asked for clarity on how the DMRE aims to ensure an accident free Petroleum Sector through legislation.
Ms L Bebee (ANC, KZN) asked for clarity on what will be done at the stakeholder workshops that has not formed part of the past discussions with the local government and stakeholders in order to improve the social and labour plan and IDP Integration. Secondly, she asked whether the Department has a solution for residents of communal land as they stated that they do not benefit from the social and labour plan infrastructure improvements because of ownership. She also asked whether or not it is possible for the Department to target the hard to reach communities through support of Black entrepreneurship to become independent producers and use sustainable energy in these areas which would stimulate rural communities and allow for better energy supply while communities await connection to the national grid. Lastly, she asked the Department to indicate the impact of the expected COVID-19 budget cuts on its work, especially on service delivery, and what plans has the Minister made available in order to combat the impact of COVID-19 on mining operations and energy production.
Mr C Smit (DA, Limpopo) asked whether the Department is waiting on the new budget in order to start implementing the plans, or if they have been proactive in devising alternative plans in order to influence the budget allocations. He also asked the Department to reveal the alternative plans they have to ensure the stimulation of the economy if they have been proactive. He also asked the Minister to provide the timeline and status of the opening of IPPs (International Power Products). He asked about the role that the Department plays to ensure bulk water infrastructure for mining, as well as the status of the bulk water supply provision to the Mogalakwena Platinum mine, in which mining has been halted because of lack of water supply. He asked the Department to clarify whether South Africa will be restarting the procurement of a nuclear reactor or if the country will continue with the Russian Nuclear Plant, and how the new multi-purpose nuclear reactor that will be procured by 2024 be funded. He asked whether or not there are alternatives, taking into account the cost and risk of handling nuclear waste. He asked whether or not the Department is taking part in lobbying for rail infrastructure in order to link mines with export facilities to relieve the strain on road infrastructure and if not, why is that the case. Lastly, he asked about the status of the separate legislation for minerals and gas to replace the MPRDA(Mineral and Petroleum Resources Development Act), and how far the process is and when can such legislation be expected to be brought forward to Parliament.
Ms N Ngwenya (ANC, Gauteng) asked whether the Department is making progress with regard to meeting with the United Nations’ Sustainable Development Goals of extending access to electricity for all, and if that is the case, she asked the Department to provide the percentage of households that have benefited through the National Electronification Programme in terms of the provinces. She also asked when the implementation of a legislative framework against illegal mining can be expected.
Mr T Matibe (ANC, Limpopo) asked a question regarding cleaner coal and the impact it has on Climate Change and how far the Department has gone in regard to this. He also asked about the progress of municipalities in acquiring their own electricity, for clarity on the fluctuation of the supply of electricity in Limpopo from 440MW to a decline in the following year and why there is only one municipality benefiting from the solar heater programme in Limpopo.
Mr Gwede Mantashe, Minister of Mineral Resources and Energy, replied to the question on the safety of mineworkers being at risk of being infected by COVID-19 and why there were no tests done. He stated that during the national lockdown, it was agreed that mines would open in phases, and once they have been open, they would adhere to the rules of social distancing, and every worker going into the mines would be screened and tested, of which, positive cases were only found after the tests were done before the workers entered the workplace. All the cases that were discovered in mines all over the country have been quarantined. On the question about an alternative budget for COVID-19 budget cuts, he replied by stating that there is no alternative budget, rather the Department is planning in accordance to what it has been allocated, but will be engaging with the National Treasury on prioritisation of the budget. The Minister stated that the Department understands that it is important in the recovery of the economy of the country, and therefore is planning on a recovery plan that will also be useful post-COVID-19, as the goal is not to bring the economy back to where it was pre-COVID-19, but rather to improve it further.
On the nuclear procurement question, Minister Mantashe replied that nuclear procurement has been accounted for in the IRP, as it provides 2 500MW and it counter poses for Hydro-electricity. This nuclear procurement is not similar to the Russian Power Plan which provided 9 500MW, as this one provides 2 500MW, and it works at a rate that the country can afford. On the question of entities and weak leadership The minister replied by stating that a year ago, when he was placed in the position to be Minister, the entities had no boards and no CEOs, and now, a year later all of the entities have appointed CEOs, except where there were cases like AE, or others that had problems. The Department under his leadership has normalised government, which reduces both operational and financial risks. On the question of illegal mining, he stated that the Department is investigating a number of cases of which most of those have been closed with an arrest made. The Department’s view is that there should be a specialised unit that investigates illegal mining within the Police Department because it drains the economy of the country.
Mr Jacob Mbele, Chief Director: Electricity, DMRE, replied to questions related to electricity, starting with the question of allocations for electricity in Limpopo, stating that the allocations for both the solar water heater programme and electrification programmes are both done based on the applications from municipalities, where the Department invites municipalities to apply for the services, and delivers upon application. Therefore, the downward trend in Limpopo was based on such applications, and the applications are received on an annual basis which means that there is a chance of the numbers increasing again. On the progress made in addressing energy access and meeting the SDG goals, he responded by stating that the country has a target to reach universal access by 2030, of which the country is currently at 87% compared to 34% in 1994. He stated that access to electricity in the country in the previous years had reached 90% but there was a reduction due to the rise in urban-rural migrations in the country, which lead to a rise in informal settlements. Mr Mbele also replied to the question of rural electronification by stating that the non-grid programme is created to cater for those areas that do not have reach in the interim, and that the Department is looking at alternative permanent solutions that take advantage of the development in technology, which will come with opportunities for SMMEs to develop small micro-grids in those areas.
In terms of the allocation for Limpopo with solar heaters, Mr Mbele stated that the programme is also in line with the received requests. He also stated that with regard to procurement of additional capacity from all the technologies that have been catered for in the IRP, the Department had issued determination for the procurements to happen and those who were subject to concurrence by the Regulator. In terms of Municipal procurement, Mr Mbele stated that the Department has issued amendments to the regulations that would allow municipalities to procure their own generation. The regulations were issued in the beginning of the month of May 2020 and are out for public comment until the 4th of June 2020 and once that is done, the Department is going to consider the comments that have been received from the public and hoped to finalise the amendment by the end of June 2020. He then stated that from the beginning of July there should be a clear path that the municipalities can follow.
Ms Yvonne Chetty, Chief Financial Officer, DMRE, responded to the finance based questions that were raised by the Members of the Select Committee. She stated that as part of the fiscal package that the President allocated to COVID-19 priorities, part of the funding must come from National Departments and the reprioritisation process is currently underway for the 2021 year only. She stated that there are no set plans by the Department and the National Treasury has issued guidelines with regard to this. Ms Chetty said that Departments are required to identify programmes or activities that can be temporarily suspended for the 2020/2021 year only, and the outer years which are 2021/22 and 2022/23 will not be affected. The DMRE will identify projects that can be postponed to the next financial year, and projects and activities that are not critical to core service delivery will also be delayed. Lastly, she stated that targets will be realigned to the revised budget allocation for the 2021 year.
Ms Ntokozo Ngcwabe, DDG: Policy and Investment Promotion, DMRE, responded to the question of rehabilitation of derelicts and ownerless mines by stating that the Department has an approved strategy for the rehabilitation of derelicts and ownerless mines and within the strategy there is a set criteria which was done based on scientific studies that the Council for Geoscience took for the Department. The criterion uses a ranking system which is based on two aspects, which are the health risk on nearby communities as well as physical safety. Based on the health risks and knowing that asbestos was officially banned in South Africa because of the health impacts it has on human beings was why the Department has prioritised asbestos mines mainly in Limpopo and the Northern Cape Province. In terms of physical safety, the Department ranked high mine shafts that were left open on gold mining areas, and those are based mainly in Gauteng, East Rand and West Rand and some in the Mpumalanga area around Barberton and a few of them in the Free State area. She then explained that the Department is following the ranking criteria because the longer they left asbestos unrehabilitated, the more the communities surrounding those areas are at risk of exposure especially during windy weather conditions because they would be inhaling the asbestos fibre which is detrimental to the lungs.
Adv Mmadikeledi Malebe, Acting DDG: Mineral Regulation, DMRE, responded to the question of the alignment of the SLP and the IDP by stating that the Department assumes that the IDP is a document that is widely consulted by municipalities, and the reason for the Department to align the SLP with the IDP is to make sure that there is no misalignment with community needs. She also stated that alignment with the Special Development Framework of the municipality is critical because all the programmes are tied to a specific goal. She further stated that the Department also acts as facilitators between the mines, communities and municipalities to make sure that there are sustainable projects , and that there is collaboration of projects on a massive scale to avoid individual or small projects. Adv Malebe replied to the question of communal land by stating that the Department expects the mines to consult with the Traditional Leaders/Authorities and to be assisted by municipalities to make sure that there are projects. She also stated that the SLP is not linked to the duration of the mining right, but it is linked to the duration of five years of the IDP, which also helps to give the Department a window that if at any point there is an agreement between stakeholders that some projects are not needed or necessary, they go on a consultation process to make sure that after an agreement is reached on an alternative and sustainable project to meet the imagined challenges. She also stated that ownership of land, especially communal land sometimes delays the implementation of projects because the Department has to go through the long process of consultation.
Mr Lucas Mulaudzi, Chief Director: Renewable Energy, DMRE, responded to the question of wasteful and irregular expenditure by stating that it is a matter that is within the control of the Department in that if the Department instils a culture that discourages irregular and wasteful expenditure within the Department, if they do not meet those standards it means that they are exposing themselves to consequence management, thereby making it easier for them to regulate and control. This unlike fraud and corruption because that could be a matter that is reported by a whistle-blower or a matter detected by the Chapter 9 Institutions, and in that instance, the resolution is done by way of either disciplinary processes or they can be used concurrently with the criminal process. He stated that in order for the Department to be able to withstand the test of law with any Court, investigations need to be conducted.
Mr David Msiza, Chief Inspector of Mines, responded to the question regarding the health and safety of mineworkers by stating that the health and safety of the mineworkers is a top priority for the Department, including the communities surrounding those mines, and that the Department under the leadership of the Minister has been taking measures to improve the health and safety of the mineworkers. In terms of COVID-19, the Minister has met with key stakeholders to come up with plans on how to adequately respond to the pandemic and to prevent the spread of the disease in the mining sector. The Department has issued guiding principles to assist the sector to comply with the Department of Health’s guidelines and have also insisted through those guiding principles that mines must have protocols on procedures to outline how they are going to make sure that the matter of COVID-19 is properly managed in the sector. He also stated that the Department has also made unannounced visits to mines in order to make sure that they are complying to the rules of social distancing and guiding principles. He said that through the unannounced visits they have noticed that the mines do follow protocols, as they are doing screenings and applying hygiene measures including hand sanitisers, but the biggest concern has been the issue of testing. For example the mine in Marula where there were 17 cases that were all asymptomatic. Mr Msiza stated that the monitoring of mines will continue to be done on a daily basis.
Mr Zizamele Mbambo, DDG: Nuclear Energy, DMRE, responded to the question regarding nuclear procurement by stating that nuclear is accounted for in the IRP and the Department is implementing it on a scale that the country can afford. He stated that the Department is looking at all the options that the market will come up with as to what will be the optimal approach in implementing the 2 500MW of the Nuclear that is allocated in the IRP.
Minister Mantashe replied to the question of cleaner coal technology and climate change by stating that there is a team that has gone to see Carbon Capture, Storage and Use in action, one in America and one in China, and stated that the Department wants to test that technology in order to clean the coal in the country because the country wants to continue using the coal.
The DG replied to the question about the Water Infrastructure Project in Mogalakwena by stating that it is not an SLP project, but rather a collaborative initiative between the Department of Water and Sanitation and the provincial government and mining companies within that area, and because mining companies are participating, the Department is also participating. In terms of the rail infrastructure question, he stated that the Department is having constructive and productive discussions with Transnet around a railway network for mining companies, and feedback will come at the right time, but the Department needs to have sufficient capital to realise this part of the work. He also stated that the Department is not entirely responsible for such a project as it is in Transnet’s line of business.
The Chairperson concluded the meeting by thanking the Minister, DG and Department. There were many achievements in the presentation. Last year, the Committee was fighting about matters of mining health but the inspectors were now doing very well as the accidents and fatalities in the mines were reduced – this is an achievement. Gazetting regulations that municipalities provide their own electricity was also an achievement – the poorest of the poor were able to receive the electricity. Supporting SMMEs is an achievement. The appointment of boards to normalise governance was also an achievement. There was proof that intergovernmental relations were working
Committee Minutes and Reports
Committee Minutes dated 5 May 2020
Mr Arnolds moved for and Mr Matibe seconded the adoption of the minutes dated 5 May 2020.
The minutes were adopted without amendment.
Committee Minutes dated 15 May 2020
Mr Arnolds moved for and Mr M Nhanha (DA, Eastern Cape) seconded the adoption of the minutes dated 15 May 2020.
The minutes were adopted without amendment.
The Committee moved to adopt its Budget Vote Reports of 5 and 15 May 2020
Mr Smit cautioned that the meetings were held jointly with the Portfolio Committee and the Select Committee was only supposed to note the presentations in terms of constitutional muster. He wanted this reflected on the record.
The Chairperson said the Select and Portfolio Committees were allowed to adopt the reports separately.
Ms Labuschagne agreed with Mr Smit – there is now Rule which spoke to adopting joint meeting Reports separately. This needs further clarity and she did not agree with it.
The Committee Secretary said the matter was discussed with management – it was a joint meeting of two Committees so each will follow their own processes. He would request a written response from the NCOP table staff on the matter.
Ms Labuschagne accepted the proposal. She made reference to the 2018 Money Bills Related Matters Amendment Act which clearly states the Portfolio Committees have the right to propose amendments to the budget for consideration in the Adjusted Budget. This is a new provision. However mention is not made of the Select Committees. The Select Committee has a different focus to its Portfolio Committee counterpart. The meetings should not even have been combined. This must be sorted out so it is a good idea for the table staff to look at it.
The Committee Secretary added that because the budget vote debates were earmarked for debate in the NCOP House, the Select Committee has to publish a report which has to be presented in the House for a debate – this why the report was prepared. The report only covers issues raised by the NCOP Members with a provincial context.
The Chairperson noted the concerns of Ms Labuschagne.
Mr Smit would not support adopting the reports until there was clarity on the legality of the process.
Ms Labuschagne also noted her non-support of the process.
Mr Arnold also requested his non-support be recorded.
The Committee duly moved and seconded the adoption of the Reports.
The meeting was adjourned.
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