Department of Mineral Resources 2023/24 Annual Performance Plan; with Deputy Minister

Meeting report

The Committee received a presentation from the Department of Mineral Resources and Energy (DMRE) on performance highlights for the 2022/23 financial year, its key priorities for 2023/24 and the budget allocation.

Members were told that, driven by strong commodity prices, production in the minerals sector rose to a record R1.8 trillion. Total employment rose by 15 500 to 475 560,

There were concerns about rail and port logistics constraints, inadequate electricity supply and illegal mining. A lack of investment in the mining sector was of concern for the longer term. Oil and gas exploration was dampened by ill-informed litigation. Declining refining capacity necessitated a review of fuel security arrangements.

Key priorities in the energy sector were the procurement of new generation capacity; progression of the shale gas programme; an updated integrated resource plan (IRP);  implementation of the South African National Petroleum Company (SANPC); and the turnaround of PETROSA.

In the mining sector, priorities were implementing the cadastral mining licensing system; eliminating the backlog in licences; implementing an exploration support fund; developing and rolling out a critical minerals strategy; and the rollout of support for artisanal and small-scale mining.

See attached for full presentation when available

Discussion

Ms L Bebee (ANC, KZN) asked whether there were any plans to improve existing power stations. If so, what were the timelines? Were there any challenges to improving the performance of existing power stations? If so, what were they? More than 200 municipalities were participating in energy efficiency projects. Was the figure the same as the previous year and how had participating municipalities performed? Were these municipalities being monitored?

Dr Nobuhle Nkabane, Deputy Minister of Mineral Resources and Energy, said the Committee needed to understand that there had been some reconfiguration in administration relating to the Electrification Master Plan. However, there was no way to divert from what the President announced on 25 July 2022 when he referred to plans developed with the Energy Crisis Committee for key interventions. These were to fix Eskom; enable investment in generation capacity; encourage businesses and households to invest in rooftop solar; and fundamentally transform the electricity sector to achieve long-term energy security.

Ms W Ngwenya (ANC, Gauteng) said the Department launched a Women Diggers programme. How much funding had been set aside for the current year to support women to obtain mining permits? Did the Department have plans to launch the programme in all provinces? If yes, what were the plans and if no, why not? She asked for more information on female representation in senior management positions. Was there enough and if not, what were the delays in achieving this? What percentage of employees had disabilities? Had the national target been reached and if not, what were the plans to achieve this? How many boards had permanent and temporary members and how many boards’ terms would end in the current year? How many mining rights applications were finalised and how many were adjudicated?

Deputy Minister Dr Nkabane said strides had been made in female inclusion in the entire value chain of the mining and energy sectors. The Department was working to promote and transform the energy and minerals sectors to provide sustainable energy for growth and development and to ensure all South Africans derive sustainable benefits. There was no specific budget for women, but there was a budget for exploration and small-scale mining to ensure that women benefited from the programmes. Amongst the interventions was the Women Empowerment and Gender Equality Strategy of 2021. The programme was launched again with the Ministerial Advisory Council.

The Department was aligned with employment equity requirements and compliant with the representation of women in the sector.

Ms Hilda Mhlongo, Deputy Director General (DDG): Corporate Services, DMRE, said 43 percent of employees were women. As males exited the Department, the DMRE would endeavour to fill their posts with women. Once recent appointments were finalised, 50 percent of the senior management service posts would be filled by women. Currently, 1.6 percent of employees are people with disabilities versus a target of two percent. The Department was in consultation with a candidate falling in this category and if the candidate accepted the offer from the Department, the gap would be filled. The term for the Council for Geoscience (CGS) board had ended the previous Sunday and this had already been advertised. Members would be appointed very soon.

Mr M Nhanha (DA, Eastern Cape) asked about three once off disbursements made to the Independent Power Producers (IPP) Office. What impact would their discontinuation have on the smooth functioning of the office? What were the environmental implications of extending the Koeberg nuclear power station’s lifespan? Given that Koeberg would be functioning for approximately another 20 years, was there a nuclear waste management plan? He stressed the fact that trucks transporting manganese bothered residents in the western part of the Eastern Cape. Trucks from the Northern Cape were running amok at the Port Elizabeth harbour as accidents and fatalities often occurred. He had lost a friend in an accident caused by trucks which he said were a law unto themselves. What was the Department doing about this? It would get to a stage where communities took matters into their own hands.

Mr Mthokozisi Mpofu, Acting DDG: Programmes and Projects, DMRE, said 45 municipalities were currently participating in the Energy Efficiency and Demand Side Management (EEDSM) Programme and the number would rise to 47 in the year beginning on 1 July 2023. The 45 municipalities were performing reasonably well and there were only three where the budget was reduced due to performance issues related to procurement. Energy savings were derived from the programme and therefore compliance was important.

Mr Zizamele Mbambo, DDG: Nuclear, DMRE, said the Department was monitoring long term operations at Koeberg. An overarching Radioactive Waste Management Plan was approved by the Minister in 2018. The Department was aware that Koeberg had applied for a nuclear licence extension from the nuclear regulator for the plant to operate safely beyond 2024.

Ms Yvonne Chetty, Chief Financial Officer, said the R114 million removed from the IPP Office would have a minimal effect. It was a once-off allocation to assist with evaluation of upcoming bid windows. The IPP Office generated some of its own funding. The ICT funding which was removed and reprioritised internally could not be used due to licensing issues. The funds were no longer available, but funding was available for the licensing system and if this ran short, the Department would reprioritise. Funding for the Electrification Master Plan funding was granted for only two financial years, 2021/22 and 2022/23.

Mr Jacob Mbele, Director-General, DMRE, said there were more trucks on the road because of the challenges the rail network was experiencing. The Department of Public Enterprises and Transnet were in discussions on dealing with the challenges. Trucking was a transportation issue falling under the Department of Transport and local authorities should ensure the rules of the road were enforced. The Department would engage with the Minerals Council to see how mines could assist in creating some level of awareness amongst contractors about adhering to the rules of the road.

Ms C Labuschagne (DA, Western Cape) referred to the legislative framework of the Department and an oversight visit to Jagersfontein in September 2022. She referred to the Free State High Court judgement in 2007, stating that the Mineral and Petroleum Resources Development Act (MPRDA) did not regulate trade in dumps and reworking these dumps. Had the Department appealed the judgment and submitted an amendment Bill to address the legal shortcomings? If not, why had this not been done? Had the Department ascertained during the Jagersfontein fact finding mission that the High Court judgment only applied to the Free State? Could the Department provide details on the extent of its regulations on recovery activity? She put these questions to the Department, given very relevant concerns about climate change. What would happen if the legislative framework remained as it was and more disasters followed?

Ms Ntokozo Ngcwabe, DDG: Mining Minerals and Energy, said that the current year’s operational plan included updating the MPRDA. Work had been done on areas to be amended, so the matter would be addressed when the bill went through Parliament in the next financial year.

The Chairperson asked if Members had any follow up questions.

Ms Ngwenya said she was not satisfied with the answers to her questions. She asked how many mining rights applications were finalised and how many were adjudicated. 

Mr Nhanha said that the nuclear waste management plan must consider commercial sensitivities of businesses. He suggested that the Committee consider inviting the Department to share the plan with it. He wanted to set aside time to hear the plan and not simply glance through it. He warned that not prioritising this could have a devastating effect on the environment.

The Chairperson acknowledged Mr Nhanha’s comments and said the Department would be called in the following month as this was an important issue.

Ms Labuschagne said her question about monitoring other provinces’ tailings dams was not answered.

Deputy Minister Dr Nkabane requested that they be allowed to respond in writing to Members’ questions which could not be answered during the discussions.

The Chairperson asked how many people falling under the disadvantaged categories such as women, youth and persons with disabilities, had been provided with opportunities.

Mr Mbele said that the Department finalised 56 mining rights applications in the past financial year. Of these, 38 were granted and the rest were refused. Further details would be provided to the Committee in writing.

Mr David Msiza, Chief Inspector of Mines, said the court's judgement did not affect dumps. The mining sector was required to develop a code of practice for managing the dumps. The Department monitored the implementation of guidelines in the mines.

Ms Ngwenya said her question on mining rights applications was not properly responded to.

The Department would respond in writing to Ms Ngwenya’s question.

Mr Nhanha said he was concerned about the response to trucks transporting manganese. Mr Mbele had undertaken to meet with the Minerals Council. The Committee should note this and Mr Mbele should report back to the Committee on progress made.

Deputy Minister Dr Nkabane said the Department welcomed the Committee’s inputs. Written responses would be provided to the Committee secretariat within three days.

The Chairperson said the poorest of the poor should be considered when regulating prices. She thanked the Department for their participation.

MInutes of previous meetings and the Budget Vote report were adopted without amendment.

The meeting was adjourned.