CGS, Mintek, SANEDI Annual Performance Plans 2022/23

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Mineral Resources and Energy

03 May 2022
Chairperson: Mr S Luzipo (ANC)
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Meeting Summary

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Council for Geoscience                                                 
SA National Energy Development Institute (SANEDI)

The Council for Geoscience (CGS) Annual Performance Plan highlighted its key thematic areas and projects which primarily lean towards minerals and energy. With the support of the Portfolio Committee and Minister, CGS received R200m additional funding in 2023/24 and R300m in 2024/25 for geoscience activities such as onshore and offshore map coverage in support of the National Exploration Strategy.

Mintek APP 2022/23 targets focus on three areas: Learning and Growth where targets include increasing the Female Science, Engineering and Technology (SET) to 55%, and SET-PhD to 26%. The second is its Financial Perspective, where a profit of R2.4 million is projected. The third is Research, Development and Innovation. It spoke to the need for commercialisation by an investor of South Africa's rare earth elements (REE).

The South African National Energy Development Institute (SANEDI) APP covers three programmes: Administration, Applied Energy Research and Innovation, and Energy Efficiency. There are 32 targets to achieve for the year with a budget of R125 million. 60% of the budget is earmarked for Programmes 2 and 3 and 40% for Administration. The Administration budget has 36% to fund human capital needs and 64% for goods and services.

Committee members asked about the increase in CGS personnel costs; when the Karoo Deep Drilling results report was expected; permission to access land for exploring mineral and energy resources; SANEDI's EU Funding; website access to SANEDI energy status reports; commercialisation of Mintek’s ideas; training women in mining instead of developing staff to obtain PhDs.

The Chairperson asked for a consolidated summary by each entity to compare their APP with that the APP of the Department of Mineral Resources and Energy (DMRE) for the purpose of showing synergy. He also referenced the PetroSA-iGas-SFF merger and asked if it made sense to have CGS, Mintek and SANEDI in their current form. How do we streamline them in response to current challenges?

Meeting report

Council for Geoscience 2022/23 Annual Performance Plan (APP) and Budget
Dr Humphrey Mathe, CGS Board Chairperson, noted CGS had managed Covid-19 quite well despite having several Covid-19 cases, their associates recovered with no fatalities. Stakeholder relations were managed well by the CEO, Mr Mosa Mabuza, and the board is proud of the CGS engaging Amakhosi, farmers and communities where they do their work. The board is excited about the following programmes:
• Geo-Science Technical Programme: The Northern Cape Programme has delineated metals that are critical to the battery and energy storage systems. It has the base metal mineral potential of sediment-hosted exhalative (SEDEX) lead and zinc deposits. Another interest is the Nickel-Copper-Cobalt style of mineralisation in the Kenhardt area of Northern Cape. There is also the expansion of the pegmatite belt and delineation of the lithium and rare earth metals mineralisation. Clean energy technologies rely on a large amounts of minerals and metals (cobalt, nickel, manganese, lithium, copper and rare-earth metals (REEs) to work. Therefore, more demand for the minerals, elements and metals that make these technologies possible will be sustained. The CGS programmes will focus on the search for such critical minerals, elements and metals.
• There is great potential in the exploration of the Giyani Greenstone Belt. The recent drilling confirmed sulphur mineralisation associated with gold and silver mineralisation. Drilling has also resulted in high water aquifers being identified. Some of the boreholes drilled will be donated to communities for potable water.
• There has been considerable traction and advancements made in the Carbon Capture Utilisation and Storage Programme. The funder, the World Bank, expressed its appreciation for the progress achieved in the programme.

Integrated Multidisciplinary Geoscience Mapping Programme (IMMP)
There are five focus areas in this programme: mineral and energy resources; infrastructure and land use; health, groundwater and the environment; innovation and diplomacy.

CGS Geoscience Technical Programme (GTP) for 2022/23
The key outcomes are:
• South Africa becomes an attractive destination for investment in the minerals resources sector through the delineation of minerals.
• South Africa’s water and environmental systems are characterised and mapped in a nationally consistent way that is in line with the IMPP.
• Geohazards/land use/risk management to deliver actionable information on community safety, land use and infrastructure development in collaboration with a range of sectors/entities.
• Development of a healthy pipeline of long-term innovative projects.
• Contribution towards accelerated economic reconstruction and recovery.

Minerals and Energy Resources Projects
The key programmes are divided into Onshore and Offshore Geoscience Mapping Projects. When the Onshore Mapping started, South Africa’s coverage was around 3% but currently sits at 10.7%. CGS hopes to increase its coverage to 12% at a scale of 1:50 000 by the end of the year. The incremental results have caused greater confidence in South Africa’s Geological Information and access to information for decision-making.

Offshore Geoscience Mapping Project
CGS has concluded a service agreement with the South African Navy, which gives them access to their limited boats while they are getting their main vessel. The CGS Research Vessel, named after Mr Nkosi, will assist in accelerating the offshore mapping programme. It is a new economic prospect for South Africa, which has not been utilised or exploited in a way that would contribute to the development of the country. In the current year, CGS plans to devote its energy to accelerating the marine mapping programme.

Base Metal Mapping Project
The base metal potential in the country has not been tapped into. It presents an opportunity to map and collect information that can be made available and used to attract investment. These activities can potentially persuade the investment community of potential South Africa has. The activities include SEDEX-style mineralisation in Namaqualand, Li-REE-F-style mineralisation in Namaqualand and the Bushveld Complex, Ni-Cu-Co style mineralisation in Namaqualand and the Insizwa Complex, and REE mineralisation coal seams. Some of the coalfields have elevated concentrations of Rare Earth Elements. CGS is currently doing tests to confirm the extent to which the elements could be economic.

CGS published a new pegmatite distribution map of the Orange River pegmatite belt in the Northern Cape which it will present to the investment community at the Mining Indaba.

Precious Metal Mapping Project
There are various areas of hydrothermal mineralisation. CGS has identified the Giyani Greenstone Belt, where they have drilled eight holes and are currently processing the data collected. So far, the results have been positive and hopefully, the results will bring necessary development in the area. The team of technicians at the Giyani Greenstone Belt identified sulphate minerals associated with gold mineralisation. More analysis is being done to help identify the potential of the area.

The Just Transition Project
Geology plays a role in the Just Transition. CGS produced a map of the geothermal potential in the country. The project areas include the Geothermal energy potential of South Africa and the Molteno coalfield. The results of the project have been positive and CGS will share the outcomes with stakeholders once they become available.

Carbon Capture Utilisation and Storage (CCUS) Project
The government and people of Mpumalanga have been supportive of the project. The stakeholder engagement project has helped provide an understanding of the importance of the project to an extent that the Municipality has seeded a 5km2 of municipality land to characterise the basin properly. If it passes the test, the pilot will be installed on the land.

Gold Prospects in Mpumalanga Province (from CCUS Project)
The potential for Gold was identified from the old drill cores. There is a potential to extend the Witwatersrand Basin. The Basin represents the Gold that has been traditionally sourced. Once confirmed, it could be possible that the Witwatersrand Basin continues for a century and more.

Karoo Deep Drilling (KDD) and Environmental Baseline Project
The final drilling depth was 2,978 meters. Samples were sent to South African laboratories such as CSIR to test for natural gas. One batch of samples was sent to Australia for testing. CGS is in the process of finalising the technical report on gas availability and responses to public concerns.

Geoscience for Infrastructure and Land-Use Project
The Infrastructure and Land-Use Project aims to assess the ground stability in many areas casting a light on the recent KZN and Eastern Cape disaster, evaluate appropriate land use, contribute to community safety, and disaster management, and assess building materials to support infrastructure development. The project will contribute to the accelerated Economic Reconstruction and Recovery Plan as well as the District Development Model. CGS has engaged with various municipalities and all have been welcoming.

National Geohazards Mapping Programme
Mapping is performed to identify areas with a high susceptibility to landslides and sinkholes.

National Dolomite Report Reviews
In line with the legislative requirements, the CGS reviewed 4780 developments built on dolomite since 2008 to facilitate safe development. The infrastructure in areas in which these reviews were conducted has largely remained protected.

Seismic Hazard Analyses
On behalf of Eskom, a Probabilistic Seismic Hazard Assessment (PSHA) was conducted in pursuit of extending the Koeberg Nuclear Power Station operation. CGS is undertaking work in support of the renewal of the long-term operating (LTO) license of the power station, building public trust and considering the possibility of a disaster and its ramifications.

Construction Materials For Infrastructure Development
Aggregate mapping is done as part of input in the construction materials for infrastructure development. This has been designed in line with the country’s strategic infrastructure programme. CGS has concluded the report and hopes it can be used to uplift the livelihoods of people.

Other Infrastructure and Land-Use Projects
Khutsong ground stability risk assessment in partnership with the Housing Development Agency. Another project is the Housing Development Geotechnical Investigations in partnership with the Free State Development of Human Settlements.

Annual Performance Plan 2022/23 (Corporate Scorecard)
Programme 1: Financial Sustainability.

Mr Leonard Matsepe, CGS CFO, said CGS is managing its overheads and wants to drive them down. It is a science organisation that has to abide by various regulatory requirements so there are overheads they need to cover but which should remain contained. There are targets for overhead costs. CGS is looking to reduce the salary bill to lower than 70% of total costs. Our engineers are the brains who should be looked after but personnel costs should be maintained below 70%.

2022 MTEF Final Allocation Letter
With the support of the Portfolio Committee, Minister, DMRE, and National Treasury, CGS received additional funding of R500m (R0 in 2022/23; R200m in 2023/24 and R300m in 2024/25) for geoscience activities such as onshore and offshore mapping in support of the National Exploration Strategy and the implementation of economic recovery. CGS relies on long-term funding to sustain this and wishes for the baseline grant allocation to be sustained.

Budget for 2021/22-2024/25
There is a deep null in the coming years as the short-term funds CGS used to receive have come to an end in 2022/23. CGS is about R120m in decline. The government grant baseline increase is R200 000 in 2023/24 and R300 000 in 2024/25 reverts back to the R6 million mark, which needs to be maintained.

On costs, the personnel costs are a major part. Commercial costs in the 2022/23 budget is R55 million. The big change has happened in the overheads and operating costs. Some monies were short term but now are no longer there. This year is going to be hard because they will be juggling funds to survive. But at least it is the end of such funding as CGS will receive continuous funding.

They are looking to generate collaborative revenue to augment what they have. Some are being secured and there is a pipeline of tenders to secure more revenue. They invest in technology so that they have the latest gadgets. Total expenditure is R482 million.

Human Resources
They have bursaries and internships to develop the youth.

Scientific Outputs
CGS produces top-quality research with international collaborators. South Africans look to CGS for data and information. The CGS will host a mega geoscience summit in October 2022 to celebrate its existence for 110 years. The summit will focus on showcasing its geoscientific contributions.

Mintek Corporate Plan and Budget 2022/23
Ms Ntombifuthi Zikalala Mvelase, Mintek Interim Board Chairperson, reminded the Committee that they were in the middle of implementing their 10-year strategy. They are working on getting highly qualified scientists and investing in many young scientists coming through the pipeline. These scientists will carry Mintek and its strategy into the future. Learning and Growth; Financial Perspective; Research, Development and Innovation.

Dr Molefi Motuku, Mintek CEO, spoke to the Learning and Growth; Financial Perspective; Research, Development and Innovation objectives. At the core of the 2030 Strategy is to develop a capable workforce, ensure financial sustainability, and develop and maintain world-class research, development and innovation (RDI) infrastructure.

Mining & Minerals Focus Areas
Mintek’s core activities range from initial investigations to process development and design, construction as well as commissioning of industrial plants. It supplies a flexible package of technology for process development and optimisation, products and services.

Mintek secondary focus is on exploration and mining. It has built capabilities in concentration; extractive metallurgy; refining; manufacturing; post mining.

Dr Motuku said that CGS should bring some of its samples to Mintek. It is a conversation the two CEOs need to have because he does not understand why CGS send samples to Australia.

Mintek supports small-scale mining. They have signed a contract with the Department to train 20 women in mining. It has recently created a capacity for mine closure and rehabilitation as well

Mintek is also a global player as they provide their expertise, technologies, instruments and services not only to the local mining industry but also to international players.

Current Operating Environment
Covid-19 restrictions impacted their ability to earn an income. They could not travel to service clients due to travel restrictions. They used this as a base for their 2022/23 plans. Mintek used Quarter 4 2022 preliminary results to model, assume and project where they will end in 2022/23.

2021/22 Preliminary Results
Mintek’s biggest assets are its employees, more specifically researchers. Learning and Growth speak to that asset. 45% is the Science, Engineering and Technology (SET) base (the engine room, the researchers). 77% are blacks and 49% are females, and 63% SET Black Mid-Senior Management. They are investing a lot in their employees. In 2019, Mintek had 5% SET researchers with PhDs but now there is 25% with PhDs. Percentage of staff with Master’s degrees moved from 7% to 22%. Currently, 13 employees are studying for PhD and 55 towards a Master’s degree.

Its Financial Perspective shows that Mintek is projecting a net profit of R25.7 million from a deficit of R53 million. Investment in Human Capital is at R9 million and BEE Spend at 103.32%. Mintek has the capacity to conduct Covid-19 tests. It has conducted more than 7000 tests on its staff and screened more than 240 000.

2022/23 Targets
In Learning and Growth, the hope is to increase the Female SET to 55%, and SET-PhD to 26%. Currently, 15 employees are studying for PhD studies and 58 towards a Master’s degree. On the Financial Perspective, the project had a profit of R2.4 million. Staff turnover is at 10% but Mintek is working on creating an environment that makes people want to stay. The third target is Research, Development and Innovation.

Key Challenges and Risks
In 2017, there was an increase in what Mintek received from the state but it has started to plateau. It indicates a major reliance on state funding. It is good for supporting research programmes. However, this is not sustainable. A key risk is a decline in income from international clients and the local private sector. However, Mintek is working on dealing with the decline in commercial income. It should be noted that the mining and mineral industry is depressed right now. But, Mintek is looking at alternative sources of funding. Additionally, Mintek has a staff level of 55% support, whereas their counterparts are between 15-33% as counterparts embraced new technologies, are highly automated and are highly efficient. The organisation is implementing new systems and processes to ensure that the engine room is prominent at Mintek.

Areas of Strategic Reprioritisation
Eight areas of reprioritization:
• Establishing a Rare Earth Element Industry in South Africa
• Energy Storage Minerals as an Enabler of a Just Energy Transition
• Incubating Fuel Cell Manufacturing at Mintek
• Coal Gasification
• Revival of the Ferroalloys Industry in South Africa
• Revitalising Iron Ore Industry in South Africa
• Unlocking the Bushveld Complex’s Titaniferous Magnetite
• Establishing Medical Diagnostic Manufacturing capability in South Africa

Mintek has been at the forefront of championing conversations about the role of rare earth elements (REE) which South Africa has. Mintek is working with Mr Mabuza of CGS on the exploration of rare earth elements. Mintek hosted a workshop with potential role players in REE and continued the conversation at Mining Indaba. Mintek will then visit a potential REE mining producer in REE at Steenkampskraal. Mintek is investing more than R150 million to establish capabilities to extract minerals like vanadium, titanium and iron ore. Mintek develops medical diagnostics based on gold nanoparticles which is an expansion area. It will invite the Committee to the launch of its manufacturing facility for medical diagnostics, kits and other pharmaceutical products.

Key Performance Indicators for 2022/23
The central focus is having researchers with high qualifications. To be a researcher at Mintek you need a Master's degree but they will also ensure employees without those qualifications are supported to obtain this.

Employment Statistics
Most occupational levels like top management and senior management have been highly transformed. Mintek is tapping into all the resources available in the country for skilled technical, academically-qualified, junior management and supervisors.

Knowledge dissemination: Publications by Type
Mintek has been in decline in its output. But the trajectory started to change upward in 2019/20. Mintek is turning a corner because of highly skilled and experienced employees.

Financial Position: Working Capital Management
If nothing happens, Mintek can still pay salaries for about eight months. They are aiming to stay above negative in terms of profits. The biggest expenditure is staff costs. Mintek has moved to a clean audit in 2019 and the use of GRAP standards. There are systems to train staff.

SANEDI APP and Budget for 2022/23
Mr Sicelo Xulu, SANEDI Board Chairperson, highlighted three important matters which were the APP review, the CEO appointment and the set-up of governance by board subcommittees for proper oversight. The board had to request an extension from the Department to submit the APP by the end of February. This allowed them to engage with Executives on the processes undertaken in putting together the draft APP. SANEDI had a board workshop to ensure alignment of strategy and SWOT and other elements. An assurance provider was brought from the Internal Audit to ensure what had been put to the board made sense. The board feels that they have sufficiently engaged with the APP even though they started in late January and they are happy to recommend it to the Committee. The CEO position had been advertised and interviews conducted and SANEDI will submit the recommended candidate to the Minister. In a short space of time, SANEDI has been able to make a turnaround because of the need to stabilise the organisation. He thanked the Interim CEO for stepping in and doing wonderful work while they searched for a permanent CEO. To deal with governance, it has established oversight committees including the audit committee. He assured the Portfolio Committee that the APP implementation will be accompanied by good oversight.
 
Annual Performance Plan Targets
Ms Lethabo Manamela, SANEDI Interim CEO, noted the three programmes: Administration, Applied Energy Research and Innovation, and Energy Efficiency. Programmes 2 and 3 are modelled on the Energy Act in terms of the SANEDI mandate. Overall, they aim to achieve 32 targets for 2022/23.

Programme 1: Administration aims to create an effective delivery environment fully compliant with all statutory requirements. It has had no challenges in this and has been able to achieve unqualified audits. They have effectively managed risk, good governance, proper IT controls and more. They have also ensured the right kind of skills necessary to deliver on their mandate.

Programmes 2 and 3 are the core programmes of the organisation, which have many planned initiatives. SANEDI has a five-year period horizon to achieve a certain number of strategic outputs.

Strategic Outputs:
• Development of Smart Grids Systems
• Demonstration of GHG emission mitigation potential in support of national commitments
• Evidence-based planning, resource allocations and decision making.
• Energy transition expertise
 
Impact Area: Just Energy Transition
There is a need to transition and decarbonise. SANEDI plans several research projects for the year, which are WASA Phase IV, Clean Coal Research Partnerships, Support to International Collaboration Efforts, and JET Net Jobs.

Impact Area: Energy Planning and Decision Making
SANEDI is working with the Department to ensure alignment with priorities. One of the priorities is the Hydrogen Economy in terms of transition. The others are Energy Efficiency, Smart Grids, Data and Knowledge Management, and Cleaner Mobility.

Budget
SANEDI has a budget of R125 million for 2022/23. 65% will be coming from MTEF and 35% from other sources. It has R13 million funding from the European Union (EU) and R18 million from the Department of Science and Innovation (DSI) Energy Secretariat in the form of management fees. Based on the funding secured, SANEDI is satisfied that the APP is fully funded.

60% of the budget is earmarked for Programmes 2 and 3 and 40% for Administration. Of the 40%, 36% is to fund the Human Capital needs, and 64% pertains to goods and services.

On 19 July 2022, SANEDI will celebrate ten years of existence and a significant contribution to the country. It hopes to continue this impact in the energy sector and resolve the sector challenges.

Discussion
The Chairperson remarked that the Committee might have an advantage or disadvantage considering they have already interacted with CGS and Mintek during their oversight visit of the Acid Mine Drainage Programme.

Mr J Lorimer (DA) said he is fascinated by the projects currently undertaken by the Council of Geoscience (CGS). He asked when does CGS expect to see tangible results from the Karoo Deep Drilling Project. CGS mentioned that they are expecting a technical report. When is CGS expecting the report this year? Once the technical report is published, what is the next step? He noted the CGS personnel costs for the past three years had been increasing by 8% per year. Does this mean that CGS is taking on more people? If so, who, for what and when? If CGS is not taking on more people, is this a healthy annual salary increase for current staff?

Mintek had an interesting presentation but he cautioned it about saying that they are earning a profit. It is a profit because Mintek is earning a big subsidy from government. His biggest concern was that since 2017 Mintek’s commercial revenue had worsened. And, this was even before the current crisis. What resulted in the decrease in commercial income earned around that time? Talk about major rare earth elements has been happening since 2012; however, no move forward has yet been made. For some time, there have been talks about a smelter. What is the prospect for a smelter? There have been talks about meeting people from Mining Indaba. However, the programme sounds like it is stalled. How realistic are the prospects of taking the next step? What is the next step?

Mr K Mileham (DA) asked Mintek what is happening with the commercialisation of research projects. He had raised this with the Board and CEO before. There is an urgent need for a commercialisation manager to take ideas developed at Mintek, make them viable for business, get them into the commercial market and generate revenue.

Mr Mileham asked SANEDI about access to resources on its website. After going through SANEDI's website, he could not find a lot of original work done by it. There are a lot of links to websites of other organisations and people. There are no reports on the site. SANEDI has its targets for reports but these cannot be found anywhere on its site. Where are they? What is being done with them?

He was not sure what the graph was supposed to represent in the SANEDI presentation for Programmes 2 and 3. Is it the number of targets achieved? On the planned initiative for energy status reports, how does one access the energy status reports? How can one see the outputs? Where are the energy efficiency interventions? What are the outcomes? What is SANEDI doing with the work that it does? Where are the energy performance standards? How can one see that those standards are being implemented? An example in the presentation is ‘smart grids’ which is the development of a smart asset strategy and governance framework for municipalities. This is an excellent idea, however, where is it? How is SANEDI going to take it from concept to implementation in municipalities? What is taking it to the next step? This is a planned activity which SANEDI wants to do in 2022/23 but it does not stop with development. There is a tangible next step to take and implement it in the marketplace.

Ms V Malinga (ANC) commented that people often remember that municipalities owe Eskom when there is load shedding. She pointed to the link between the CGS budget and its programmes. Programme 5 is responsible for the delivery of its mandate and has the largest share of the budget. The programme outputs are maps and reports. What happens to the maps and reports once produced? How are these maps and reports going to help reduce poverty and unemployment?

In the APP presentation, CGS has admitted that exploring and diversifying mineral and energy resources requires access to land, which is currently a serious challenge in the country. If CGS wants to resolve access to land to fulfil its mandate, why is it not added as an indicator in its APP? On the DMRE APP master document, it has CGS implementing the Water Ingress Project but the report by CGS is not clear. How much of the budget is allocated to machine learning techniques to map groundwater resources? When will these techniques piloted in Maluti-a-Phofung Local Municipality be taken to other provinces that experience water challenges?

Mintek always tells the Committee that they need people with PhDs to get efficient and quality work done. However, they have partnered with DMRE to train 20 women in mining. Should not Mintek prioritise hiring people with PhDs to achieve what they are lacking as an entity? The Department of Higher Education and Training once paid for students doing Masters and PhD. Why would they train miners? She is not against women being trained. She is for women. To achieve their targets, would it not make sense, with the DMRE partnership, for more of their staff to earn PhDs?

Ms Malinga asked what is SANEDI celebrating after 10 years. She made a comment about avoiding selling the sovereignty of South Africa to European countries and asked for the conditions attached to the EU funding.

The Chairperson asked for a consolidated summary and a comparative exercise of the APP of the entities with that of the DMRE APP to ensure synergy. When there are different layers of government, it is called cooperative governance. Some of the issues raised by Members will need to be revisited. It is the Committee's role, responsibility and duty to know where every cent is being directed and if what is presented is a priority or will add value to the money spent.

The Chairperson noted the need for oversight to ensure government produces the required results from this research and reports. It may not necessarily fall on DMRE but some of the activities can be internal trade or exchange amongst the state itself through the investment conferences, Mining Indaba, and many other such activities. He noted the points raised by Members, looking at Mintek, SANEDI and CGS, or even about NECSA and SFF. Has government considered having a Chief Marketing Officer or something to that effect? Someone responsible for ensuring that what government produces provides results. Also, it is not a uniform system. How do we deal with international trade by our entities? What are the policy guidelines or directions?

Mintek response
Dr Molefi Motuku, Mintek CEO, thanked Mr Lorimer for his observation of what happened in 2017. Although the graph reflects a dependence on state funding, Mintek received a state grant of only R250 million. The rest of the income – the R340 million over and above the R250 million – Mintek had to earn through competitive bidding processes either through National Treasury, the Department of Science and Technology (DST) or Industry. Mintek earned that money – it was not given to it. They had to earn it through programmes like the Hydrogen and Fossil Programme, which is fully funded by DST. It is not part of a state grant although they can count it as public sector income. To earn additional funds, Mintek still has to go through competitive bid processes to the Technology and Innovation Agency and National Treasury. Additionally, Mintek goes to Industry to earn more than R150 million. Mintek even goes internationally to entities like Horizon 2020. Moreover, Mintek generates an income of over R100 million from selling products internationally. Mintek’s current concern is that the local mining and mineral industry is not supporting or funding research. Local research programmes have been decommissioned and funded internationally.

On REE production, which is a concern, there are two parts to this. The first being Mintek might have been ahead in directing South Africa to look at REE. Locally, there was no attraction to this conversation of what REE could mean for the country. Other countries like the US and China, had moved ahead. The technologies developed by Mintek to treat and produce REE are not the problem, rather it is no one is producing REE in the country. At Steenkampskraal and Glenover, no one is producing REE. The complaint before was that even if there is an entity that can produce the REE, there is no guarantee of being able to treat it. However, Mintek derisked that and developed technology that will be able to treat REE from different sources in South Africa and SADC.

Many people have said that the US is looking at sources outside of China as it makes business sense for many countries to look outside China. The reason could be that they were not ready many years ago. Mintek was approached by the US Embassy and it was willing to fund the plan. This was not the case five to ten years ago. Many years ago, the dominance of China was not felt as it is now. It was more about electronics back then, now it is about mineral resources and energy. The time to move the needle is right now because it has taken the country too long. It should be treated as a Strategic Investment Programme more than a programme driven by a state entity.

On the commercialisation of Mintek’s ideas, Dr Motuku was not quite sure how to respond to Mr Mileham’s question because they share the same sentiments. Mintek did not have the capacity to commercialise its research outputs. The Mintek Office of Technology Transfer has been established, employing specialists to move ideas from concept to commercialisation. Other entities, even universities, had done this years ago. It is shocking why Mintek did not embrace this earlier – but this is water under the bridge. Mintek is now building capacity in Business Development and Commercialisation. Secondly, for about ten years Mintek has been talking about testing kits. They concluded that they cannot burden the same scientists that bring ideas with also developing the products and commercialising them. That is why Mintek decided to hire people and build capacity within this space. Mintek went to health and pharmaceutical companies and recruited one of the best in the country, Ms Karen Kruger, to head Mintek’s commercialisation of test kits and related health products. The results of the activity resulted in Mintek signing a contract within six months with a Cape Town company to fast track the development of test kits. Mintek is ready to share a working prototype of Covid-19 and HIV test kits with the Committee on their next visit to Mintek.

Currently, Mintek has bought the IP to 18 products that are available and being commercialised through contract manufacturing instead of building capacity. This will be in place before year end. This is a different approach that Mintek has taken by hiring people who have experience in commercialisation rather than relying on scientists to do this. It is a departure from how they have traditionally done commercialisation at Mintek. But, Mintek will commit to having its products on the market before the end of the year.

Mintek does not just want people with PhDs. To do research, a person needs to have at least a Master's degree. However, training women in mining does not have that same requirement. Training on mining-related issues is usually done by people who are highly qualified in that space, which is not a research area. With research, Mintek needs people with PhDs. For non-research projects, Mintek uses relevant and well qualified people who have the requisite experience and qualifications to work on non-research projects.

In addition to mining, Mintek does training in several skills-related activities. These activities may not necessarily be research work. They do not deploy PhDs into mines. Mintek is improving the quality of its offerings to ensure the individuals trained during the programme can execute and be empowered to participate in commercial mine activities.

CGS response
Mr Mosa Mabuza, CGS CEO, replied to Mr Lorimer that South Africa is far from being a sunset mining industry. It is at the beginning of its renewed lifecycle. Geoscience is adding value in how they are studying the projects, packaging them and bringing them forward as a value proposition for investment in exploration. This is done in support of the Minister's Exploration Strategy.

There is a pipeline of projects that go through CGS. In their proverbial war room, they look at the country's geology and identify possibilities. There is a long list of a pipeline of projects. An apex of priorities is developed as information evolves to demonstrate its value. Once the information is concluded, in the same way the CGS has published the Pegmatite Map, which they hope to take to the Mining Indaba. The next step is to make that information available so that those in the exploration space can look at the information and they can decide how to best utilise it to inform their investment decisions.

CGS is internally delineating the exploration phase. They are looking into using the First Mover Advantage Principle to explore certain opportunities and form partnerships under strict conditions that will not undermine its legislative mandate.

On the strategic reorientation of the organisation, CGS realised how much it still needs to catch up. CGS had to look into growing the organisation by 8% to 10% in the next three years. This was done so as to balance the expertise with young people coming into the pipeline and some of the specialised skills that CGS will require to deliver projects. However, the current focus is on hiring individuals with specialised skills CGS does not have. For instance, in recent years, South Africa has not been an exploring country, especially in its geology and packaging it in a way that will resonate with the exploration investment community as competing jurisdictions do. This is an area that is limited and CGS recognises that it needs to strengthen it. This is one of the areas CGS will be looking at. Thus the growth of 8% to 10% for personnel costs to achieve the objectives is reasonable growth.

Mr Mabuza asked what is the value of a map. Is it just paper with colours? The Pegmatite Belt is an example of the value of a map. For instance, not a lot of people thought that there are REE in the country. CGS takes the geology programme after looking at what they have and gets people on the ground to do the mapping. The mapping is done in a particular manner to unravel the details required to get to a point where critical decisions are made. This is the real value of a map. A map should be able to redirect and re-inform decisions to invest in South Africa because CGS has made the map available by contributing to mapping. For example, the value of a map is when geological information is used to identify an area highly susceptible to landslides. It could potentially help municipalities when deciding to put a township in a particular area. They can use the map to decide if it is a good area to put people. A map is also valuable when it can identify groundwater potential in areas with water scarcity like Cape Town or the Western Cape in general, facing day zero water supply. When there is a potential humanitarian crisis, a geological map can be used to augment the water supply. Maps are fundamental products that are critical in the developmental decisions made by the nation. The investment and value of the maps cannot be ignored.

On access to the land, CGS invests a large chunk of its resources into stakeholder engagement programmes, which were not included in the APP. It has developed a stakeholder function within CGS. Mr Mabuza has dedicated a lot of time to ensure that stakeholders appreciate the geoscience research the Council does. It is not as if CGS got to Mpumalanga and got access to land. He added that he was simply acknowledging the people of Mpumalanga because they had interacted with various stakeholders from the Mpumalanga provincial administration, district municipality, local municipality, farming community, businesses, NGOs and ordinary citizens. The necessary access to deploy their strategy is made possible by the stakeholder engagement programme. This engagement works. South Africans have been supportive of the work CGS does in many areas. CGS makes it clear when going into various areas that they are there to do the science, they are a state-owned entity, and use a popular saying “In Science, we don’t know what we don’t know.” They do not make undue promises. Moreover, CGS considers negative results as a technical success.

CGS has developed Artificial Intelligence (AI) tools across their projects to identify mineral targets. For some of the huge datasets, they produce AI-based products. The CGS team does go through a process of confirming the AI projects. Maluti-A-Phofung is just an example of the application of AI in the 4IR context and how it is already in place in all the work CGS does. There are also general applications of the tool in all the work CGS does.

On the Water Ingress Project, CGS thought they had given the Portfolio Committee a lot of information during their oversight visit. In the interest of time, there is a lot of work they have not included in the presentation such as the CGS participation in government's acid mine drainage programme. CGS is saving the country in excess of 380 million litres of water per annum through the Water Ingress Programme. However, the figures still need to be verified. Major progress has been made with the project in the context of acid mine drainage management.

Additionally, there is a Passive Water Treatment Project being piloted in Middleburg. The pilot is at the advanced stage. CGS would like to invite the Committee to demonstrate how the plight of clean water in the Mpumalanga coalfields is being turned around with geoscience research and intervention.

Mr Mabuza said the Chairperson’s questions are largely aimed at DMRE. However, CGS does work with the DMRE DDG responsible for Policy Investment Promotion on the products being developed. Some coordination happens at that level. DMRE can provide further explanation.

SANEDI response
Ms Lethabo Manamela, SANEDI Interim CEO, explained that the graph information in the presentation was a representation of the historical performance of the core programmes. In the interest of time, SANEDI skipped through that slide. There was a concern about the conditions attached to the EU funding. There are no conditions attached to the funding which was secured through National Treasury through its Energy Efficiency project. The contract will be signed by National Treasury. SANEDI will get the funds as an allocation. Money not spent by year end will have to be sent back to Treasury.

The work on the smart grids project is not done in isolation. DMRE, Southern African Gas Association (SAGA) and National Treasury are involved in ensuring the research outputs can be taken forward for implementation. This is future research which is still going to be done. SANEDI acknowledges that it should not be just a research report but should aid implementation and improvement at municipality level. This is something SANEDI would like to see happening.

On access to information through the SANEDI website, this was raised when they presented the Annual Report. The work on improving the website is currently ongoing. They have commissioned improvement of their website so that it is user-friendly, interactive, and for easy access to information. SANEDI hopes that the next time Members visit the website they can find the information easily. Hopefully, in the next two months, they will have a better website and access to information. For now, Members can request a report and SANEDI will send it through. Additionally, when reports are published, SANEDI has workshops and seminars to share the research information with stakeholders. The information is also shared on their website.

Closing remarks
The Chairperson remarked about Council for Geoscience and Mintek that sometimes institutions were established at a particular time because there was a demand for them. There are always new developments that may result in the redetermination of that and any organisation must be tested from time to time. It is the same as when the matter of the PetroSA-iGas-SFF merger was raised. He questioned if it made sense to have the entities in their current form. How do we streamline them in response to current challenges? It is important to have engagements on how to locate the research institution in the form of SANEDI. He noted the difficulty in responding to such questions. It might be that the questions were raised from a context where improvements were needed from time to time and to relook and review the approach.

Meeting adjourned.

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