DMRE Budget: Committee Report

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Mineral Resources and Energy

14 May 2021
Chairperson: Mr S Luzipo (ANC)
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Meeting Summary

Video: Portfolio Committee on Mineral Resources and Energy

Tabled Committee Reports

The Portfolio Committee on Mineral Resources and Energy convened virtually to consider and adopt its report on the Annual Performance Plan and Budget Vote No.34 for 2021/22 Financial year of the Department of Mineral Resources and Energy and its entities.  

During the discussion, Members flagged the issue on the Department’s legal opinion on the matter related to the South African Nuclear Energy Corporation (NECSA) and Central Energy Fund (CEF). Members raised the affordability and cost implication issue for the Nuclear New Build Programme. Members pointed out the omission of Black Economic Empowerment at the exploration phase of the Mining Charter to be untrue and rectified the statement in the report. Further observations and recommendations were added on the salary increases not paid to staff of the South African Diamonds and Precious Metals Regulator (SADPMR), funding of the SWH programme to be reflected as a standalone, as this is more of a conditional grant, for the SADPMR to present an update on its detailed financial status in the next term, that the DMRE should explore funding options for incentivising the prospecting, exploration, and mining beneficiation of Rare Earths Elements, that the Department needed to expedite the raising of the licensing threshold for electricity generation from 1 Megawatt to 50 Megawatts and the DMRE needed to update the Committee on the progress of its strategic fuel reserve

Meeting report

The Chairperson outlined the agenda which was to adopt the Report of the Portfolio Committee on Mineral Resources and Energy on the Annual Performance Plan and Budget Vote No. 34 for the  2021/22 Financial Year of the Department of Mineral Resources and Energy and its entities.

The Chairperson highlighted Members’ huge tasks and their responsibilities to their constituents. Hence, he emphasised the need for Members to always bring ideas to the Committee instead of attending the meeting as if it was a check list.

Report of the Portfolio Committee on Mineral Resources and Energy on the Annual Performance Plan and Budget Vote No.34 for 2021/22 Financial year of the Department of Mineral Resources and Energy and its entities

Mr K Mileham (DA) commented on the last paragraph of page 2 that made reference to the South African Nuclear Energy Corporation (NECSA) and Central Energy Fund (CEF). He asked if Members recalled that during that presentation, he had requested the Department obtain a legal opinion on the matter because he did not believe that it was correct to his knowledge. To date, the Committee had not received any response with regards to the legal opinion matter. Thus, in his view, this point would simply be misleading and he suggested that the paragraph not be included in the report.

Mr Mileham also mentioned the Nuclear New Build Programme on page 9. He said that so far, the Committee had not been provided with any evidence about the affordability and scale of this programme if it was to proceed. He highlighted the cost implication of this programme and emphasised the importance that the Committee needed to be in possession of the full facts before it could agree to go ahead with it. The figure given by the Department was US$5000 per megawatt which was the price in 2015. Internationally, the average new build was about US$8000 per range. He criticised the Department’s approach in making its strategic decisions based on outdated and incorrect information.

Mr M Mahlaule (ANC) responded to Mr Mileham’s second point and said that he may have missed the opportunity during the presentation. In that presentation, he specifically enquired the Deputy Director-General, Mr Zizamele Mbambo, about whether the programme would be overseen by the Department and the National Nuclear Regulator (NNR). The response was amply provided in the meeting. Mr Mahlaule said that if more information is needed on the subject, it could be done at another meeting. The purpose of this report was to reflect what had transpired in that meeting and he found the report to be truthful to what had transpired.

The Chairperson clarified that the part of the report which Mr Mileham made reference to needed to reflect what had happened in the meeting. The Committee’s view can be addressed in the observation and recommendation part. Hence, asking the Department about the legal opinion should not be included in the report – this could be reflected in the recommendations.  

Mr J Lorimer (DA) noted that paragraph 4 on page 8 which stated that ‘The department has resolved the longstanding regulatory uncertainty in respect of the Mining Charter, with Black Economic Empowerment ownership omitted at the exploration phase’. He said that it was the complete opposite to what the Department said. The Department said that it was ‘required at the exploration phase’, so the sentence in the report is factually incorrect.

Mr Mileham commented on Point 6.1.1 of the report and wanted to include a sentence that described the nature of the discussion.

The Chairperson disagreed with Mr Mileham’s suggestion and thought it would be better to rather included it in the recommendation part so that there would not be repetition in the report.

Mr Maulaule agreed with Mr Mileham that there should be a sentence inserted that indicated the Committee remained seized with the matter and would seek a legal opinion on the matter.

The Chairperson requested the word ‘encouraged’ be changed to ‘noted’ under Point 6.2.1. He said that the Committee must not be giving the wrong impression to MHSC that it was encouraging.  

The Chairperson also suggested an insertion to Point 6.10 that the Committee had noted that the South African Diamonds and Precious Metals Regulator (SADPMR) has for quite some time not paid salary increases to its staff.

Ms V Malinga (ANC) agreed with the amendment.

The Committee Secretariat clarified that Members should take note that the recommendations are part of the report and are directed to the Minister. He suggested that some of the Members’ input was better placed under the observations.   

Mr Mahlaule agreed.

The Committee added more recommendations. On Point 9, the Committee added that specific reference to the scale and pace of the Nuclear New Build Programme shall be submitted to the Committee.

The Committee added a recommendation that the DMRE must ensure that the funding of the SWH programme be reflected as a standalone, as this is more of a conditional grant.

The Committee added a recommendation that SADPMR must present an update on its detailed financial status in the next term.

The Committee added a recommendation that the DMRE should explore funding options for incentivising the prospecting, exploration, and mining beneficiation of Rare Earths Elements.

Mr Mileham also recommended that the Department needed to expedite the raising of the licensing threshold for electricity generation from 1 Megawatt to 50 Megawatts.

Mr Mahlaule recommended that the DMRE needed to update the Committee on the progress of its strategic fuel reserve.

The report was duly adopted. The DA reserved its rights.

The meeting was adjourned

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