Department of Minerals and Energy Strategic Plan: briefing

Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
25 May 2005
DEPARTMENT OF MINERALS AND ENERGY STRATEGIC PLAN: BRIEFING

Chairperson: Ms N Ntwanambi (ANC, Western Cape)

Documents handed out:
Department PowerPoint presentation: Overview
Strategic Direction for Programme 1: Administration
Department PowerPoint presentation: Strategic Plan 2005/06 – 2009/10
Department PowerPoint presentation: Mine Health and Safety
Department Strategic Plan 2005/06 to 2009/10

SUMMARY
The Department of Mineral Affairs and Energy gave three slide presentations on their Strategic Direction 2005/06; Department aims, functions and training programmes, and their Mine and Health Safety Strategic Plan. Mining-related diseases and deaths - particularly from asbestosis, manganism and silicosis - were of particular concern. Particular attention was drawn to the development of more socially representative human resources and service delivery.

Considerable Committee discussion ensued on the municipality delivery of free basic services; the court decision on the Richtersveld community’s land claim against Alexcor; and the safety of the nuclear waste facility at Vaalputs. Much attention was given to mining safety, and workers being trained in alternative skills to soften the impact of job losses.

MINUTES

Department Strategic Direction
Ms T Zungu (Department Chief Compliance Officer) presented a slide presentation giving the Department’s overview, vision and mission statements, budget allocation and key focus areas. Key objectives included an active contribution to sustainable development; redressing past imbalances; the implementation of related economic policies and legislation; and governing the sector so that it became healthier, cleaner and safer. The total budget was R2.1 billion, of which 76.6% went to transfer payments and 23.4% went to the Department allocation.

Key strategic areas included the development of human resources; improvement of service delivery; focusing on mining-related hazards that impacted public health and how unrehabilitated mine sites impacted the environment; fatalities, injuries and occupational diseases; implementation of the Mineral and Petroleum Resources Development Act; and the finalisation of amendments to the Precious Metals and Diamond Acts. The Department would also focus on the promotion of renewable, cleaner and safer fuels, universal access to electricity; and the nuclear and radioactive waste management policies.

Department Human Resources briefing
Mr G Mnguni (Department Director: Management Services) gave an overview of the aims and functions of this division. The numbers of vacancies at 12 April 2005 were 163. The number of applications ‘in progress’ was 129 and 34 were still to be processed. This vacancy situation had really improved. As at end March 2005, employment equity in terms of race stood at 72% black and 28% white; male employees were 53% of the workforce; and women composed 22% of senior and middle management. The total of disabled persons represented only 1% (against the target of 2%). Of grave concern was the average staff turnover of 9% per annum.

The Department was developing a Scarce Skills Retention Strategy along with a mentorship programme. The internship programme had commenced in 1997, and each Directorate employed at least two interns for 18 months. About 230 interns had been enrolled since the inception of the programme, and there were 108 interns currently ‘in the system’. Employees were offered bursaries to study for careers in line with core functions of the Department. There were currently 258 bursary holders.

The Electricity Regulatory Initiative aimed at providing capacity for the Department’s employees within the electricity sector and was funded by Norwegian donors. The Masters in International Technology (DaVinci with UTP) programme was a Ministerial project to ‘bridge the gap’ in IT and project management skills within the Department. Two female employees started the programme in September 2004. The Petrad (Norway) project aimed at developing employees in the management and administration of petroleum. One employee from the Department had participated.

The aim of Women in Nuclear Training (France) was to expose South African candidates to international technologies. Negotiations were currently underway to have the programme presented in South Africa. Four employees of the Department have been trained on nuclear issues through this programme.
Other government initiatives included meetings at ministerial level, the Accounting Officers Forum (FOMEH), and the subcommittees of the Accounting Officers Forum.

Mine Health and Safety briefing
Mr N Mojapelo briefed the Committee on the Strategic Plan for Mine Health and Safety. This included safety and health performance, occupational health and safety structures, MHSI objectives 2005 – 2008, and the programme budget. He referred to the Leon Commission recommendations about a new approach to laws and institutions.

He went over the safety statistics up to December 2004. Deaths among the industry’s 450 000 employees had been reduced from 270 in 2003 to 246 in 2004. Occupational health remained a challenge. He listed particular mines that showed an improved safety record and those that still need to improve. Referring to occupational health performance, he dealt particularly with silicosis and tuberculosis, as well as the compensation paid out to affected miners between 1998 and 2003. He particularly looked at the examples of Northam Zondereinde Platinum Mine; Hernic Ferrochrome Maroelabult Mine, Harmony Free State Operations 2; DRD Hartebeestfontein, where employees had died on these mines, and also that of manganese poisoning.

The Occupational Health and Safety Council was headed by the Minister of Minerals and Energy, followed by: the Mine Health and Safety Council and then subcommittees of the Mining Regulations Advisory Committee (MRAC), Safety in Mines Advisory Committee (SIMRAC) and the Mining Occupational Health Advisory Committee (MOHAC).

The objectives of the Mine Health and Safety Inspectorate (MHSI) for 2005 – 2008 were to actively contribute to sustainable development; redress past imbalances; implement related economic policies and legislation; govern the sector to be healthier, cleaner and safer; and to review and develop appropriate structures, processes, systems and skills. The number of inspections achieved in 2004/05 was 12 342 (95% of target) and there had been 3 464 audits, which was 83% of the target.

Discussion
The Chairperson asked about the relationship between Cape Town’s own electricity and Eskom for the provision of free basic services; on progress made in the land claims case in the Northern Cape, and in discussions with the Department of Public Enterprise, Alexkorand the Royal Bafokeng. She also asked whether the Department was ready for the first Regional Electricity Distributor (RED) due to be launched in June.

Ms P Temba asked who constituted the Accounting Officers Forum and whether the Department was included. She enquired how selections were made across the provinces for the intensive training programmes. With regard to women’s training courses, how was advertising done for candidates?

Ms N Magubane (Deputy Director-General, Electricity and Nuclear) responded that the delivery of free basic electricity and services was the responsibility of municipalities. This included gas, electricity, water and sanitation. The funds allocated came from the equitable share formula from National Treasury. Relationships between Eskom and municipalities were not good, and the Department would need to try to bring parties together to ensure municipal payments to Eskom. Fewer municipalities were not providing free basic services, and this number would continue to be reduced.

Ms Magubane continued that as far as the launching of the first RED in Cape Town was concerned, the Department was on track but restructuring had been more complex than expected. The plan was to start in Cape Town and then move further.

Mr G Mojapelo said the reasons the cancellation of bursaries were varied – some staff left the public service and some just lost interest in the training. The Department ensured they collected what had been paid out, with interest added. The training programme was fairly accessible with participation from every sector and, in particular, from rural communities. With regard to the 27% staff turnover, exit interviews had been conducted.

With regard to the Homeland Trust and how rural communities were reached, there were regional offices in all nine provinces. Community leaders were brought into the Department for training, but had to travel long distances.

In response to the question relating to the Alexkor land claim, the court decision had been that the Richtersveld community had the right to claim the land as well as the mineral rights. The Department was interested in how Alexkor would fare financially. Most of their diamonds were coming from the sea. The land was being given back to the community but not mining activities. It was expected that a compromise would be reached where the community would have some stake in Alexkor.

The Chairperson asked whether the community was being trained to farm the land. Mr K Sinclaire replied that one should be careful when referring to the future of Alexcor Northern Cape, as this was up to the Supreme Court that had adjourned. Alexcor had briefed the Department on its needs. He was concerned that expectations might be created that may not materialise. The court would decide how the process would unfold.

Ms N Magubane said that the first beneficiaries of the Women’s Nuclear Energy training programmes were from the Northern province and Rhodes University. Students were trained in nuclear work in France.

Mr K Sinclaire cited cases in the Northern Cape where it took four years to get a licence. If the Department did not wish to give out licences, they should at least have informed the applicants to that effect. He also asked about the position with regard to the nuclear waste facility of Vaalputs in the Northern Cape. Europe was running out of space to store nuclear waste and therefore the Government could make money out of Paalpits and other rural areas. He also asked whether it was true that Eskom had ‘run out of energy’. The iron ore mined at Sishen was transported to Saldanha where value was added, then back to Vereeniging before export. The Department would better empower citizens if value was added closer to the source of the product.

Mr Mtombelo (?) asked about employment equity. He was not satisfied with the response about communicating with young men and women in rural areas. He also asked when Black Economic Empowerment would really become ‘broad-based’. On the question of mining safety, there were many accidents underground and much illness. The Department should better assist these employees. With regard to job losses on the mines, plans should be put in place to assist workers.

The Chairperson concurred that better precautionary measures should be taken to prevent mine accidents, particularly to migrant workers and those who went underground. She asked what happened to those families where the sole breadwinners had died on the mines.

Ms Chen asked whether there was any policy for exporting raw minerals to overseas markets. Could overseas investors come into the country and export at a cheaper rate?

Mr D Gamede (ANC KZN) responded on the question of insurance for underground miners. The trend had been to subcontract. A number of those involved in fatal accidents were not insured – was the Department in control of the subcontractors to which the big companies were outsourcing? With regard to hazards mining which impacted on public health. In Cape Town there had been complaints from Tableview requesting Caltex be moved from there.

Ms Zungu responded that the provincial breakdown on energy, electricity and nuclear had not been included because the presentation was already too bulky. They would include that information in another presentation at a later stage. With regard to nuclear waste, the site was definitely safe. There was no crisis with Eskom’s electricity supplies – 70% was supplied by Eskom and 30% by Cape Town municipality.

Mr A Mngomezulu (Department Deputy Director-General) referred to the lack of activity at Kimberley diamond mines. In spite of incentives, no company was as yet prepared to put anything back. Legislation was about to be passed (previously the Precious Metals Act) so that every company that mined diamonds would be obliged to offer a certain percentage to the State. Everyone would have a licence to buy from the State. All cuttable diamonds in South Africa would be made available to local cutters. Once the commodity was depleted, mining companies would be encouraged to plough back into the communities so that future local economic activity could be addressed.

Industrial Development Zones (IDZs) were VAT-free. In order to use these systems, overseas companies investing through the Independent Development Trust (IDT) would have to plough back more into the country, not only creating jobs but also making sure that areas like Kimberley survive.

Mr A Mgomezulu continued on the subject of job losses. Each mine should have a social and labour departure plan whereby employees were trained in alternate skills such as welding and bridge building, in preparation for possible retrenchment. The Department was looking at ways of cushioning job losses so that when a mine’s life came to an end, job losses would be minimised.

On the question of mining licences for employees, a Black Economic Empowerment policy had been implemented. About 94% of mineral rights in the Northern Cape were state-owned. Most of the applications had been refused because of non-compliance, and were being granted in accordance with the new legislation. In terms of the Mine and Safety Act, mines should take responsibility for their employees and also their subcontractors. Mines had to provide protective equipment.

The meeting was adjourned.