Mining Licensing; Energy Efficiency Strategies & Bio-Fuels Strategy: briefing by Department

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Mineral Resources

27 March 2007
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Meeting Summary

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Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
28 March 2007
MINING LICENSING; ENERGY EFFICIENCY STRATEGIES & BIO-FUELS STRATEGY: BRIEFING BY DEPARTMENT

Acting Chairperson: Mr E Mthethwa (ANC)

Documents handed out:
Mineral Regulation Branch
Energy Efficiency Strategy

Audio Recording of the Meeting


SUMMARY

The Mining Regulation Branch of the Department of Minerals and Energy reported to the Committee on the status, challenges and way forward for licensing. The application process, the implications of the Minerals and Petroleum Resource Development Act of 2004 and the challenges that have arisen from the large number of applications, were discussed. The Department strongly dismissed the perception that the Act was a disincentive to investment in the sector. In fact,
the Mineral Regulation branch challenged anyone to prove to it that the Act had led to a flight of mining investment from South Africa The Committee raised questions predominantly about the application process and the experiences that applicants have on the ground.

The Clean Energy Branch presented on Energy Efficiency and Bio-fuel strategies in South Africa. The Committee was concerned with the proposed use of maize in bio-fuels and the lack of energy efficient technology in the country.

MINUTES

Mr C Molefe (ANC) explained that he was the acting Chairperson in the absence of both the Chairperson and the acting Chairperson. He handed over to the delegation from the Department of Minerals and Energy (DME).

Mining Licensing - status, challenges and way forward
Mr Jacinto Rocha (Deputy Director General: Mining Regulation, DME) introduced himself and his delegation made up of Ms N Ntombela (Chief Director, Western Regions), Ms F Zikalala (Chief Director, Central Regions) and Mr B Qina (Acting Chief Director, Eastern Regions).

He noted that the Mineral and Petroleum Resource Development Act (MPRDA) came into operation on 1 May 2004, so it will have been three years of implementation by 1 May 2007. Since then they have received a record number of applications. To implement the Act, the Mineral Development branch was divided into two: the Mineral Regulation and Policy branches. They have 376 employees of which 305 are involved in licensing specifically and the managers are experienced.

The application process is stipulated in the Act, so people who say that they do not know the process have not read the Act. Furthermore, the timeframes are also contained in the Act. The applications are treated as projects. He illustrated this with a generic application process which is available on the DME website. Lodgement is done by mail or by person in one of nine regional offices to coincide with the provincial boundaries. There is an office in Cape Town, Port Elizabeth, Kimberly and Springbok, Klerksdorp, Johannesburg, Welkom, Durban (was in Dundee), Polokwane and Witbank. The applicants do this and the applications are accepted or rejected within fourteen days. This is different to the refusal or granting of licences. They are accepted or rejected on the basis of a number of requirements. It is a tick-box exercise.

There is then a general consultation process, according to the Act. The applicants must submit an environmental management plan or program depending on if it is a prospecting right or mining right application. From this inofrmation, it is decided if the application is granted or refused. The applicants must be notified within 30 days of this decision. The right is then executed, DME approved and the right must be registered. In 120 days, the applicant must start prospecting or mining within a year.

That is the generic application process. Applications are treated as projects to facilitate understanding for those who did not read about the process in the Act. They have an internal process at the branch which was publicised in September 2006. DME counts the number of days from the application date. When an application is accepted, they indicate the timeframe to the applicant. In the letter to the applicant telling them of the acceptance, they indicate when execution will be done so that the applicant can make necessary arrangements to execute the right. That has been the process since September 2006.

There have been a record number of applications. Mr Rocha said that he had not seen this number in the last ten years he has been at the DME. This fact is not represented strongly in the media. There have been 10 909 since the implementation of the Act. In Mpumalanga, since 1992 (promulgation of the Mineral Act) until 2004, they received 800 applications. In the last three years they received 2 224 applications: 900 were accepted, 1 600 rejected, 394 granted, 2 494 refused and 458 applications were withdrawn. The majority of applications come from Mpumalanga, North West, Northern Cape and Limpopo. Even the numbers of applications in the Eastern Cape are off the record. Prospecting rights: 5 719 were received, 4 691 were accepted, 997 rejected, 2 604 granted, 1 655 refused and 216 applications were withdrawn. Prospecting indicates if people are interested in investing in South Africa. This is a good indication that the MPRDA opens doors as this many applications were not seen before its creation. These statistics can be verified. The accepted applications are in different stages in the process. Mining rights: 1 074 were received, 283 granted and 239 refused. Some are still in progress at various stages. Mining permits for small scale mining: 2 447 received, 1 065 granted; 597 refused; 530 are still in progress.

Moving on to the Act's impact on investment, Mr Rocha said that there has been a rumour that the MPRDA had driven away investment. DME's view is that this is not the case. They can substantiate it through the number of applications that they have received and through information outside of the DME. Since 2004, there have been sixteen mining companies that listed on the JSE. This compares to only three who listed between 2000-2004. Of the three, two were listed in 2004. This information is from the stock exchange. In addition, Nedbank Corporate Capital says the market capitalisation of junior- and mid-cap companies has grown from 15 billion in 2001 to 60 billion in 2006. It is now at about 63 billion.

The other element that had been built into the MPRDA during the transition phase is a guarantee of conversion for prospecting and mining rights. They have never refused a prospecting or mining rights conversion unless DME finds that they should not have used the conversion route. He asserted that no mining company can say that they came for conversion but their right was refused. It is guaranteed and that is why the conversion process takes longer - they cannot refuse any conversions and interactions with the applicants must take place until it is finalised. All prospecting conversions have been finalised. The transitional period for this was May 2004 to April 2006 and they have finalised all of them. The mining rights conversions will continue until 2009.

The information that he has quoted is not from DME, it is available in the market. Unfortunately this does not appear in the newspapers, which tend to be only negative. Paul Miller from Nedbank has said that if the growth of the junior and mid cap companies is extracted, they are outperforming the nine largest mining companies on the JSE index. Unfortunately the health of the mining sector in South Africa tends to be measured by the behaviour of the larger companies and one forgets about the activities generated by the junior sector.

Mr Rocha said that in 2006 he had attended the opening of three new mines: one coal, one chrome and one platinum. This type of info often does not come out in the media. This year, a platinum mine was opened and he attended the first blast. He could only remember attending the opening of one mine prior to the MPRDA - a diamond mine in Polokwane. They also went to the opening of a Voorspoed mine in the Free State. There was a lot of activity in the mining sector but unfortunately this did not come out that strongly. Another article from the Mining Weekly from the 15 December 2006 by Jade Davenport, stated that the new JSE listed mining companies showed an appetite for local mining investment. This was not coming from the DME, it was from Mining Weekly. A report from Business Day on the 12 March 2007 by Rob Rose stated ‘divestment blow to mining’ as Barrick sold their South Deep shares and another company sold their 20% equity shares in Goldfields. As far as he knew, Barrick did sell their shares but were involved in South Africa with a community called Bakgatla Ba-Kgafela for a platinum mine. They are preparing for their feasibility study. With regards the sale of the equity shares; when one person sells, another person buys so the "divestment" was unclear to him. That the companies sold shares did not mean that the companies stopped operating. South Deep is still there mining and Barrick is involved in a project with the community in the North West, as he mentioned.

Looking at what has been happening, the Mineral Regulation branch challenged anyone to prove to them that the Act has led to a flight of mining investment from South Africa. They heard a lot of noise but in order to react in a logical way, they had to get proof that it is a fact. Then they could go back to the Act and ask what has led to that. If it is the Act then they can look at it to see which provisions provoked such flight. But until they are given proof, it is difficult to react and say ‘amend the MPRDA’. What they see is people coming. Just the day before at a meeting they met a Canadian man said he was in South Africa for the first time to invest. Mr Rocha said that he did not know why, if people are coming, that one focused on those that have left. As far as he knew only one company had left. He would not mention their name. When the branch tried to find out why they left; publicly they said it was because of BEE. When they spoke to people who worked on the mine, they said that it was because the gentleman who was there could not find opportunities.

On the matter of the challenges that they face, Mr Rocha said that there was a problem that everything was blamed on the regulatory environment and it becomes very general. It was then difficult to identify which elements of the regulations are bad for investment. For instance, last year around March, there was an article that said that Company X lost R50 million because of delays in the application process. He then inquired about it from the relevant regional office. He learned that the same company had applied three times previously and their applications were rejected. They then launched a mass application in April 2006 and the application was accepted. He does not know what the CEO of the company was thinking in terms of his counting of days; he expected the rights to be granted by July 2005, so he said that he lost money because DME was nine months late. They went back into the system to find that they were one month late. That company did not lose money because of DME. But what came out in the media was that a company lost R50 million because of delays in the regulatory process.

There were other companies who raise issues around their own planning challenges and then blame the regulatory process, delays in the application process. That was why, for them not to always be blamed, they came up with the project planning process where they told companies to expect finalisation by a certain month. There was also passive resistance to transformation. They hear that everyone supports transformation but very few were committed to it. No one would some out and say they do not support it but when push comes to shove, the commitment dies down. They had this experience during the conversion process with the major companies. They had decided to set aside two to three days with the major companies to have a workshop with them to tell them what they were doing wrong, especially with BEE and social and labour planning.

That was why there was an increase in the number of conversions in 2006. Before that DME would read the applicant's documents and be frustrated with what they saw and would then send these back. That was why they decided to call them all together and indicate what they were not doing right. They were still waiting for some of the companies that went through that process.

There was also an unwillingness to comply with the regulatory requirements. South Africa’s Section 24 of the Constitution says that everyone has the right to a good environment and some say they cannot give money for protecting the environment, it was too much and they blamed the regulatory environment. As officials, they have to implement the law. They have to ensure that the South African environment is protected. If the companies do not want to put down a ‘deposit’ for future generations to enjoy the environment, then it becomes difficult to say yes, the right was granted. Then DME were told that they were going against development.

There was also pressure to process applications very quickly. They had noted this in the previous year. They have internal capacity challenges and it was not around intellectual capacity, but staff turnover was a problem. For instance, they were losing two senior managers this month in this branch. They were going to the mining sector. If the branch was ineffective, they would not have the right people to be recruited into the mining sector. They were also losing at the junior management level, especially on the environmental side. One thing that tends to be forgotten was that there were capacity challenges within the industry itself. They could tell this from the quality of applications that were received. This matter had to be addressed collectively, not only DME processing applications, but also looking into the companies to see what their capacity challenges were so that they could assist each other by knowing their role as the applicant and the role of the regulator.

They have all heard a lot about fronting and there were various types, from the less sophisticated ones who bring their domestic worker in to those of financial engineering. A lot of time must be spent reading documents to discover fronting. For example in one deal they assessed they had to go through 21 contracts.

There was also deal making: companies only interested in making the next deal and not in becoming operators. This was so they can get 1% or 2% or 5%.

He referred to the debate on "broad based"; to what extent should one broad base? It was the challenge of crumbs. The other challenge in South Africa was the extent to which one focuses on acquisition by historically disadvantaged individuals. One did not focus on the fact that when HDIs acquire equity, the previously advantaged also benefit. Noises were only heard when people fought over the 26%. He gave an example using the Chairperson and Adv H Schmidt (DA). If they become partners, the Chairperson, being the BEE partner, got 26%. The Chairperson was the anchor partner but he had to also bring the youth, the women and the communities. The noise that one heard was about the Chairperson’s share and whether it was broad-based. But one forgot that Adv Schmidt was getting 74% and nobody complained about that. This was the debate in South Africa, should one focus on the 26% or the 74%? The challenge was the element of crumbs when there was a loaf of bread with 100 slices, the BEE partner took 26% but had to distribute it to the women, youth and community.

There was also the issue of the ‘revolving door’. They have seen that some companies establish themselves, they acquire the right with one BEE partner, they then dismiss the partner. The BEE partners revolve but the established company stays the same and are called investors. If the company is a family, one is not ashamed to call them the Oppenheimers, but if they were HDIs, they were called ‘the usual suspects’. Where was the debate in South Africa? So for some we say it was good, and for others we say, ‘No, you can’t do that, it is not good for you because you are historically disadvantaged, you are the usual suspects’. But established companies can apply for as many rights as they want, they were never ‘the usual suspects’, they were investors.

There was also lip service to socio-economic development issues. He was shocked to read a magazine article looking at an assessment of socio-economic contributions. There were six mining companies in the top ten. He wondered why they never came and spoke to the DME since what they saw in the annual report was totally different to the social and labour plan, which was the regulatory tool to ensure companies contributed. DME always had to tell companies why they have to provide skills development to their employees. If they analyse the social and labour plan around skills development, the information from the Mining Qualifications Authority (MQA) and information from the Department of Labour did not talk to each other. This was an environment where all South Africans agree that there is a skills challenge. What one saw in the social and labour plans was a lack of rigour in skills development from the mining companies. There were issues around adult-based education and training and internships. In the DME, each directorate must have an intern. They challenge companies that have many divisions, to use this avenue if they are serious about skills development.

In conclusion, Mr Rocha said that the MPRDA had rejuvenated the mining industry. This was based on the number of applications that they had seen. They could ask people to conduct research from 1992 to 2004 and compare it to the period in which the Act has been in place. People would not apply if there was no interest. Secondly, the MPRDA had not expropriated anybody’s rights. There was a provision in the Act, Item 12, that stated if one could prove that one's rights had been expropriated, then they would be paid compensation. As far as he knew there had only been one individual who had done this. In October 2004, they received a number of notices about the intention to take government to court because the Act had expropriated rights. Because of the Prescription Act, they had to give notice of intention to sue. If the state owed you money, you had to claim it in three years. To date, no one had taken them to court. Nobody had come to challenge the constitutionality of the Act because it had expropriated rights.

The other element, if the MPRDA had done something, was that it had clipped the wings of the former mineral development managers in the regions in term. Their discretion had been clipped. There was a perception that the regional managers still had discretion. However, they only had discretion to make one decision: the acceptance or rejection of applications which was a tick box exercise. You could not have discretion in a tick box since the applicants either complied or they did not. Decisions on granting were done at head office, mining rights by the Director General, prospecting by the Deputy Director General. He did not know where the discretion perception. Once a right was granted, the regional manager could not stop this. The MPRDA was a better piece of legislation than the Minerals Act of 1991. The Minerals Act had a lot of discretion and no one ever complained but now with the MPRDA, where discretion had been taken away, people were complaining about it.

Officials of the Mineral Regulation branch were public servants and Section 197 of the Constitution enjoined them to loyally execute the policies of the government of the day, and that was what they were going to do with out fear or favour. It was the responsibility that they took. In the process, some people would be happy and some unhappy but they would implement the law. As a branch, they would admit when they made mistakes and would rectify them. They would address the challenges and problems when they arose. Since 2004, not withstanding the challenges, and taking into consideration that the MPRDA was new, no one could say that they had messed up. They were proud of what they had achieved. Their objectives were not to disrupt the mining industry, and they believed they had fulfilled this objective.

It was true that some applications were processed outside their time frames. When the noise was being made, they made a study in June/July and found that only 7% were processed outside the time frame but everyone got the impression that the branch was in disarray. Cabinet then decided that they would send the Vulindlela project to DME to investigate the licensing process for minerals and petroleum. For the first time the report to Cabinet was a positive one. This was an indication that despite initial mistakes, the processes were in place and they worked. They would continue with this. People could compare them to many countries but they had information that not everything was good in other frameworks. The Fraser Institute had made a survey on this that when there were comments that mining companies made a comment about another country, some people thought they were doing well, while some thought it was a mess. The DME were not going to lie down and accept baseless criticism but they were prepared to take constructive criticism.

The Chairperson said that he had hoped that the presentation would cover the Camden issue.

Mr Rocha asked if he could comment on it before questions. The reason he did not put it on the programme, it was not prearranged. They had met with Eskom the day before where they discussed the Camden issue. They had not received any application from the USUTU mine. The USUTU mine was the mine that supplied coal to the Camden power station. USUTU was mothballed from 1988 to 1990. It was then run by Ingwe under another name (Trans Natal Colliery). Due to the mothballing of the power station, they had to stop mining. When the power station was de-mothballed in 2004, it was done so with no mine. So there was no coal from USUTU to the power station. Eskom applied for prospecting rights in the property around USUTU in 2005. Eskom was aware that those rights were refused. They notified Eskom in September 2006 by registered mail. Eskom then said they did not receive it, they sent notification in March 2007. There had been no coal from USUT mine since the 1990s. He could not see a connection between no coal being provided to the power station and the application for prospecting. Prospecting was when you intended to look for the mineral, not to mine. This all came out in the TV programme, Carte Blanche, on which he was interviewed. The facts were not presented. Prospecting rights would not have resulted in a supply of coal to the power station. In order to get a mine running, they would have to follow a long process and even now they would not be supplying coal.

Discussion
Mr W Spies (FFP) asked for the reason that the Camden application was refused. He got a lot of complaints about rehabilitation guarantees from the public. He had met a man that applied to mine on his farm and then withdrew his application. It was very difficult to reverse the process as they could not get DME officials to inspect the site, was there a procedure for this? People were unhappy with the sand mining in Cullinan since there was no rehabilitation. He asked if there was a breakdown of the figures into new and conversion licences.

Adv H Schmidt (DA) said that he had heard that the figure of R10 billion being bandied around was from the Chamber of Mines. This was a study conducted and figures deducted from mining activity in Australia increased by 200% and ours were only about 63%. Did this explain why people said there was something wrong? Regarding the Nedbank Corporate Capital report, was the growth due to BEE or from investment or both and what percentages? With regard to mines taking legal action against DME, the three year prescription period was not appropriate according to the previous minister. What were the dates? Some mining companies thought they had until the end of April 2007 but some people from the Department had indicated that it was the time from when the application was refused. He requested clarification.

Mr C Kekana (ANC) asked if there was a breakdown of the accepted licences in terms of the demographics of the recipients. Were black people and women moving into mining? Departmental offices suffer from employees moving from the public to private sector for salaries increases. People in his constituency had tried to apply and he has tried to help them but had got no joy from the Department. He wished DME would assist new-comers.

Ms N Mathibela (ANC) thanked Mr Rocha for the wonderful presentation; she wished all DDGs were like him. She was glad he was putting his foot down. She could already see the light at the end of the tunnel. She asked what could be done to help the MQA and Department of Labour talk to each other. With the education programme, was the "Tata Lapa in the mine" part of this?

A member asked for clarity on the impact on investment and the sixteen mining companies listed on the JSE. With regards the challenges, did they have plans to solve fronting and deal-making issues?

Mr E Lucas (ANC) said that the DME had a challenge to change mindsets. People felt defensive. There was no assistance for the people at the bottom, otherwise crumbs were better than nothing. Another difficulty was the process to get from prospecting rights to mining rights. People could not get funding and the big companies had such an advantage.

Mr S Vundisa (ANC) said that he had heard complaints that DME did not reply to applicants in his constituency (Khalagadi) which was very mineral rich. What was happening to the applications, were they received? Did they stop at Kimberely?

Mr M Matlala (ANC) asked what the status of the HDIs was? They need a breakdown of the applications. Were the conversions BEE compliant?

The Chairperson said it was difficult to get a response from the DME offices. How good were they at communicating? Perhaps constituency offices could be empowered by the Committee Members. He was grateful for the strong stance but how did they plan to deal with the challenges?

Mr Rocha noted that the reasons for the refusal of prospecting rights could not be released. If companies did not put up a deposit for the rehabilitation, what would happen to the environment? DME spent a lot of money for rehabilitation, especially on the asbestos mines. The process to undo rights existed and was according to the Act. What was meant by mining investment? One had to ask if this included junior companies doing something on the ground. Did they not count? It seemed to him that they were only looking at the members of the Chamber of Mines. There were only three new mining right applications for platinum from the members of the Chamber of Mines. He had asked a company how long it would take to respond to a boom in the price of a commodity. It took eighteen months for an open cast mine to be created, and longer for an underground mine. When one looked at investment, one had to ask what one meant by that. There was no platinum in Australia; were we including platinum? It was a debate that must be engaged in so that apples are compared with apples.

On the figure of R10 billion lost, he said that AngloPlatinum had announced R30 million in three years. They had not been granted conversion, neither had Impala Platinum; yet both have said they would invest. Canada raised 600 million Canadian dollars last year on the Toronto Stock Exchange to invest in South African mining. What was that? Where did they get these figures of monies lost? Why did they put South Africa down? In respect to Western Australia, this was a report with ambiguous advice. Was it true? It was a perception, which was difficult to respond to. The prescription period should not arise since no rights were expropriated. The mining industry thought that it came to an end at the end of April 2007. As far as DME were concerned, it did not. But the mining industry would react based on how they see it and not on the fact that DME was confident that it did not.

Ms Ntombela responded that they do not have breakdowns of the figures at this stage since they do not have a tool to measure this. They had noticed more women but not seen any disabled people. They were looking for disabled applicants. They had noticed that there was participation through equity from BEE companies that had such representation.

Mr Rocha said that MQA and the Department of Labour did talk but the information from them was in conflict.

Ms Ntombela continued to say that ABET should deal with the illiteracy and take people through the process. They had invited all the unions. Illiteracy was huge at mines. They expect the unions and mines to work together for skills development programs.

Ms F Zikalala said that in Section 43 of the Act, rehabilitation must be done at the closure of a mine and the relevant department was the chief inspector. The form of payment could extend the time of the process. Many people did not want sand mining but then there would be no development. Rehabilitation was essential. They would like to take the issue up. They did not have information on the applications from Khalagadi not being replied to. DME had to reply within fourteen days. They would investigate further. There might be some problem with the flow of applications between offices.

Mr Rocha said that in all manganese applications, the surrounding communities were shareholders. Either people were not satisfied or they were not aware of it.

Ms Zikalala noted that there was already a training centre there so the prospecting rights would lead to development. They would monitor and see if the community really benefited. The Kimberly office dealt with a lack of resources. If there were specific issues on the table, they would definitely look into it.

Mr Qina said that some people did take part in fronting because they have so little. They must look at the different forms of fronting. They need to crack down on this. Some companies had empty joint venture agreements. It boiled down to the unwillingness of companies to be committed to transformation. When the agreement was 26%, you could see that the company was doing the minimum to comply.

Mr Rocha added that they had received 370 prospecting rights conversions and 360 mining rights conversions. On the issue of compliance, they would continue to get complaints but how they dealt with them was critical. They had grouped the chief director for three regions. These chief directors should be dealt with if they did not get joy at their offices. They also got congratulatory letters. There were no late applications at the moment. All backlogs were dealt with in September last year. The conversions only had timeframes to be done by 2009 but these take a long time. They were a branch of DME that was willing to take responsibility, when they soundeddefensive it was in an effort to explain themselves. They were committed to delivering a quality service. Some complaints were valid and others were not but due to people not knowing. He thanked the Committee.

The Chairperson thanked Mr Rocha and his branch for their effort and commitment.

Energy Efficiency Strategies
Mr S Tyatya (Chief Director: Clean Energy, DME) introduced the presentation.

Dr E Du Toit (Director: Energy Efficiency, DME) explained why energy efficiency was necessary. They were guided by the white paper on energy and Policy 1998. She outlined the vision and the eight goals of the branch including improving health, job creations, poverty alleviation, decreased pollution, decreased CO2 emission, increased industrial competitiveness, increased energy security and a delay in building power stations. The targets must be met by 2015. The monitoring and measurement objectives were shown.

Ms X Mtwa presented the National Bio-fuels Industry strategy. It relied on the Cabinet mandate from 7 December 2005. The bio-fuel task team was multi-departmental. Progress so far included a feasibility study and the macroeconomic impacts. A summary of the experiences internationally were given. Some challenges included the implementation and communication with stake holders.

Discussion
Mr L Greyling (ID) said that they could not do the issue justice in such short time. He recommended a longer time to commit to it. For energy efficiency, Eskom got money to enhance this. was the money in the right place? Has it been transferred? He had the personal experience of not being able to access an energy efficient fridge. It must be easier for consumers. In Australia, houses were subsidized to do energy audits but it would be a disincentive to put the municipality in charge as there they want people to use more not less electricity. was it something we could consider? In terms of bio-fuels, they want it to be 75% of renewable energy and that they would use maize. His understanding was that there was no reduction in green house gases because of the conversion rate in maize of 1:1. They also need to look at other considerations like water and land requirements, food security and others. Multiuse crops should be considered, such as hemp which could be used for fiber, food and fuel. He doesn’t know where the research was in terms of this.

Mr G Morgan (DA) in terms of energy efficiency, it would always be difficult to convince big users to be energy efficient since it was relatively cheap in South Africa. He thinks that we should be looking at the technology on the other side. He thinks we should more toward 1 watt standby appliances and others should eventually be banned. In 2001, the current president of the USA put out a presidential directive that all federal government arms must have only 1 watt appliances. It could begin in the government. Incandescent light bulbs should also ultimately be banned. There should be disincentives for this. Australia has banned them, the US, Venezuela and Cuba were phasing them out. He thinks Mr Greyling was generous to give maize the conversion of 1:1. The best report has been a 3% benefit. Sugar cane was much better and maize was a big problem in South Africa.

Mr Lucas also thinks it should be dealt with again at a later stage. Starting at government buildings was a good idea, like water heating. What would be the cost of building power stations in the future if they delay today? Bio-fuels look attractive but drought was an issue and they need to do the topic justice. The country did not have enough maize. Education was necessary for energy efficiency. It could be done by example.

Mr Kekana agrees they need more time for the issue. With regards energy efficiency, many people would want to use efficient appliances but do not know about it. They need a big campaign. They should come again and make a presentation on gas and solar energy. They do not know what was available on the market. He doesn’t think the human rights groups would allow them to use food for fuel. How would they make sure there would be enough food for the nation.

The Chairperson said that it was clear that they must come back to the issue.

Ms Du Toit replied that the money for Eskom comes from consumers. DME would take over this money in stages. People do not listen to HIV/AIDS campaigns which was life and death, why would they listen to electricity campaigns where they could save a small amount of money. They were busy looking at technology for safer appliances, it was important and they were waiting for the energy Bill to come through. The delaying the building of power stations was an example of how much money could be saved if people were more energy efficient; it was not to say that they were delaying the building of power stations. Education was essential. They had a school competition with record response. Some of the kids that won from Springs did not even have appliances but knew how to be energy efficient. They want to work with the mayors and municipalities to get the education to the people.

Mr Tyatya added that energy efficiency was an energy best practice. They believe that communication was the key to change people’s attitudes. They have consulting with SABS on energy efficient appliances. They were working on it. The concerns about bio-fuels were noted. They were saying what could be achieved, but not saying that it was the only way to meet the targets. Maize was commonly used but they would concentrate on using excess maize. The energy balance was true, maize was not always the best. They were looking at this and if it could be improved. It would enhance energy security.

The Chairperson noted that everyone was taking the issue very seriously.

Meeting adjourned.

 

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