Mineral and Petroleum Resources Development Amendment Bill: briefing

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
22 August 2007
MINERAL AND PETROLEUM RESOURCES DEVELOPMENT AMENDMENT BILL: BRIEFING

Chairperson: Ms N Ntwanambi (ANC, Western Cape)

Documents handed out:
Presentation on Mineral and Petroleum Resources Development Amendment Bill
Mineral and Petroleum Resources Development Amendment Bill [B10B-2007](as amended by the Portfolio Committee on Minerals and Energy)

Audio recording of meeting

SUMMARY
The Deputy Director-General of the Department of Minerals and Energy briefed the Committee on the amendments to the Mineral and Petroleum Resources Development Act (Act 28 of 2002). The amendments aimed to make technical corrections, remove ambiguity from certain definitions, include changes to mine closure procedures, make provision for beneficiation and the Council for Geoscience, separate the powers of the Ministers of Minerals and Energy and Finance, include certain old order mining rights and allow for better administrative practices. The dilution of Black Economic Empowerment and fronting practices were prevented by requiring the Minister’s prior written approval for cession or sale of prospecting or mining rights.

Members of the Committee reserved detailed comments on the amendments until the next meeting as they were given inadequate time to study the Amendment Bill. Questions were asked about mine closures, dealing with pollution and environmental degradation, the role played by the Regional Mining Development and Environmental Committee and the definition of beneficiation. The Department was asked to comment on complaints received from the Endangered Wildlife Trust and the Chamber of Mines and the Committee was given the reassurance that adequate time and opportunity was given to all interested parties to make representation to the Department and the Portfolio Committee on Minerals and Energy.

MINUTES
In her opening remarks, the Chairperson said that Members were not adequately prepared as they had only received a copy of the Amendment Bill at the meeting and had not had the opportunity to compare the amendments to the existing Act.

Briefing by Department of Minerals and Energy
Mr Abe Mngomezulu (Deputy Director-General, Department of Minerals and Energy (DME) apologised for the delay in circulating copies of the Amendment Bill (as amended by the Portfolio Committee) to the Members. He extended the apologies of the Director-General, who was unable to attend the briefing. The delegates from the Department were introduced: Ms Lindiwe Mekwe, Ms Elize Swart, Mr Shadley Mackenzie, Mr Douglas Mailula and Ms Bongiwe Lufundo from the State Law Adviser’s Office.

Mr Mngomezulu briefed the Committee on the historical background to and the main objectives of the Mineral and Petroleum Resources Development Act (MDPRDA) (see attached document).

Mr Mngomezulu explained the rationale behind and the effects of the amendments. It was necessary to correct some technical errors and to remove ambiguities in certain definitions. “Community” was redefined to protect the interests of historically disadvantaged South Africans (HDSA). The mine closure requirements were reviewed and provision was made for mine closure procedures and strategies. Two new concepts (beneficiation and the Council for Geoscience) were introduced. There was a need to separate the powers of the Ministers of Minerals and Energy and Finance and to transfer the responsibility for the determination of fees (e.g. royalties) to the Minister of Finance. The omission of existing old order mining rights (e.g. mynpachten, OP26 rights, mining leases and subleases) was addressed. The dilution of Black Economic Empowerment (BEE) and fronting practices were prevented by requiring the Minister’s prior written approval for the cession or sale of prospecting or mining rights. The appeal and review of administrative decisions were refined to effect sound administrative practices. The area for small-scale mining operations was increased from 1.5 hectares to 5.0 hectares. The manner of consultations with landowners, lawful occupiers and interested parties was to be prescribed in the Regulations. The Regional Mining Development and Environmental Committee (REMDEC) was enabled to make recommendations to the Minister on objections and environmental issues.

In conclusion, Mr Mngomezulu said that the amendments resulted in a technical improvement to the Act and allowed for more effective implementation thereof. The co-operative governance between organs of state was enhanced. The amendments did not result in any deviation from the objectives of the Act or the principles enshrined in the Mining Charter and brought the MDPRDA in line with other legislation.

Discussion
Ms Ntwanambi thanked the Department for the presentation. She said that Members required the opportunity to compare the Amendment Bill to the Act so that they were in a position to make more comprehensive comments. She asked if all the proposed amendments were included in this version of the Amendment Bill.

Mr Mngomezulu replied that the changes approved by the Portfolio Committee on Minerals and Energy were included in the latest version of the Amendment Bill.

Ms Ntwanambi asked if due consideration was given to the interests of workers when mines are closed and if they were properly informed of the closure. She asked whether consideration was given to cases where there were people living in houses on mining land that was subsequently sold.

Mr J Sibiya (ANC, Limpopo Province) said that there were cases where people were found to be mining illegally in mines that were closed and ended up being trapped or killed. He asked what was done to prevent access to closed mines.

Ms Ntwanambi commented that she was aware of one case where people were living underground in an old mine in the Free State and another instance where illegal aliens were trapped in a mine in Mpumalanga.

In response to the questions related to mine closures, Mr Mngomezulu replied that the requirements and conditions for mine closures were not substantially altered by the amendments and remained as described in the Act. The Minister must be informed of impending closures so that everyone was aware of the closure. There were legal procedures that must be followed when workers were retrenched as a result of a mine closure. There were procedures for the proper closure of a mine, including sealing it off in such a way that prevented unauthorised access. The Minister must also satisfy herself that a mine was properly closed off and it would be inspected before the closure certificate was issued. These requirements were intended to avoid the problems experienced with old shafts that were left open.

Ms M Temba (ANC, Mpumalanga) asked what role was played by REMDEC in the closure of mines and who served on this Committee.

Ms J Terblanche (DA, North-West Province) referred to Clause 34(a) that amended Section 43. It stated that the previous owner was responsible for any environmental liability, pollution or ecological degradation until the closure certificate was issued by the Minister. She wanted to know what happened if degradation or pollution occurred after closure, how this was dealt with in terms of the legislation and who was then responsible for dealing with the pollution.

Mr Mngomezulu replied that the previous owners would be held accountable for any subsequent pollution as well.

Mr D Mkono (ANC, Eastern Cape) asked what was meant by the term “beneficiation”.

In response to Ms Temba’s question, Ms Elize Swart (Director, DME) explained that the same Government Departments that considered the applications for closure and made recommendations to the Minister were represented on REMDEC. Should there be concerns over any residual impact within the five to ten year period as defined in the Act, the Committee would not recommend that the Minister certified closure.

In response to Ms Terblanche’s question, Ms Swart explained that the Act made provision for post-closure management and the financial provision for such management. If there were any post-closure impacts, the mine remained responsible and the closure certificate would not be issued if the Minister was not satisfied that the matter was satisfactorily addressed. She mentioned that a mine may transfer this liability to a third party but this was subject to approval by the Minister and was not a common occurrence.

Mr Mngomezulu explained that the DME was in the process of developing a beneficiation strategy. He gave an example of the four stages of beneficiation in the mining of gold: the primary or first stage was the crushing of rock, the second stage was the extraction of gold ore, the third specialist stage was the refined product, for example, gold bricks and the fourth stage was the final product, i.e. gold at a purity level of 99.95%. The mining of other minerals would also fit into the four broad stages. He said that it was essential to include a definition of beneficiation in the Act so that everyone was clear on what was meant by it. He added that the Mining Charter would include offsets for those companies with beneficiation programs in place.

Ms Ntwanambi said that as far as she was aware, there was no law dealing with illegal mining. She asked whether the provinces were represented on REMDEC. She reported that complaints were received from the Endangered Wildlife Trust (EWT) and the Chamber of Mines that they were not given the opportunity to participate in the public hearings on the Amendment Bill. She asked what processes were followed to allow for submissions by interested or affected parties.

Mr Mngomezulu replied that REMDEC had regional offices in all nine provinces. There was no law governing illegal mining – it was against the law and therefore a police matter. The DME was trying to minimise illegal mining through the proper closure of mines and reported any illegal mining operations to the SAPS. He said that adequate time was allowed for input and comment on the proposed Amendment Bill and the complainants did appear before the Portfolio Committee and their comments were included in the documents. The Chamber of Mines did have a legitimate complaint as a recommendation was inadvertently left out. This was subsequently resolved. Mr Mngomezulu pointed out that the Department worked closely with the State Law Adviser and followed the prescribed processes in the formulation of the Amendment Bill.

Mr Z Kolweni (ANC, Alternative Member) asked what would happen if a mine was re-opened after it was closed.

Mr Mngomezulu replied that a mine is closed and sealed in such a manner that it can be unsealed and re-opened by a qualified person at a later stage.

Mr D Gamede (ANC, KwaZulu Natal) asked if there were any punitive measures if a mine was not closed properly and was abandoned.

Mr Mngomezulu replied that an environmental guarantee was required before mining operations can commence and was regularly updated to adequately cover the cost of repair to any damage that may occur. In the event that a mine was abandoned, the guarantee was forfeited.

Ms Ntwanambi announced that the Amendment Bill would be considered at the next meeting of the Committee, scheduled for 5 September 2007.

Mr Mngomezulu thanked the Members of the Committee for their input and cooperation.

The meeting was adjourned.