Department of Minerals and Energy Strategic Plan and Budget 2008/09

NCOP Economic and Business Development

28 May 2008
Chairperson: Mr J Sibiya (ANC, Limpopo)
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Meeting Summary

The Department of Minerals and Energy briefed the Committee on its Strategic Plan 2008/09- 2010/11. The presentation covered DME’s 2008/09 legislative programme, energy, mining, DME’s internal environment, empowerment programmes and lastly its financial planning. Members engaged vigorously with the DME on the issues that had been covered.


Meeting report

The Department of Minerals and Energy (DME) delegation comprised of Ms T Zungu Deputy Director General: Corporate Services, Mr T Maqubela Chief Director: Nuclear, Mr G Mnguni Chief Director: Management Services, Mr D Msiza Deputy Chief Inspector, Mr M Oberholzer and Mr M Masemela.

Ms T Zungu presented the DME’s 2008/09-2010/11 Strategic Plan. She outlined DME’s 2008/09 legislative programme and stated that out of the seven bills planned for submission during 2008/09, only four would be submitted as it would be a short year for both Cabinet and Parliament.

The current electricity challenges being faced by SA was elaborated upon. The DME would continue with its energy saving campaign. An Energy Summit had recently been held in Johannesburg and the department was in the process of finalising its strategy to address summit resolutions. The recently proposed electricity price increase by Eskom continued to be robustly debated and it had forced the department to acknowledge that the electricity-pricing regime had largely taken place in a policy vacuum. The Committee was also given a breakdown of figures for the Integrated National Electrification Plan. The breakdown compared planned figures to those actually achieved.

Ms Zungu stated that the international market determined the pricing of liquid fuels and that SA could not influence it. The DME had however realised that the market-determined prices for Liquefied Petroleum Gas (LPG) was far too high and had embarked on a process to regulate LPGas prices. The department had also stepped up the process on the awareness of clean energy. With regard to clean fuels, the DME together with DEAT had agreed to start negotiations on fuel specifications. The process was foreseen to be complete by 2010 with implementation of the specifications taking place by 2012. Security of energy supply for SA was paramount to DME. It had evaluated the security and continuity of supply of liquid fuels by considering the entire value chain. The merits of alternative clean forms of energy for the security of energy supply had to be considered. Hence the decision to expand the use of nuclear energy for electricity generation.

Members were assured that 2010 projects were not under threat, the 2010 FIFA World Cup was treated as a special project in terms of ensuring security of electricity supply for hosting cities. The DME had also embarked on a high level national communication and information dissemination campaign on energy efficiency.

The safety track records at mines had recently been a subject of great concern. Safety audits had recently been done at mines and a report would be finalised on the findings and recommendations of the 333 high-risk mines audited. Ms Zungu stated that the department had been implementing the Mineral and Petroleum Resources Development Act (MPRDA) since 2004.The DME however continued to experience challenges of poor compliance and non-compliance from the mining industry.

The Committee was also given a breakdown of DME’s internal environment and its integrated human resources plan. Participation of youth and women in the mining and energy sectors continued to be a challenge. The DME had however youth and women empowerment programmes in place. Ms Zungu concluded with a summary of DME’s financial plan.

A female ANC member asked for a breakdown of figures on women and disabled persons in DME. Specifically the positions that they were currently filling. She also referred to women’s organisations in the provinces like South African Women in Mining Association (SAWIMA) and asked what the status of these organisations were. She further referred to the youth that were being trained by DME and asked from which provinces were they recruited and how was recruitment done.

Mr Mnguni stated that DME had a computer system in its human resources department that kept track of employment equity in terms of race, gender and disability.

Ms Zungu responded that organisations like SAWIMA had some time back elected new members for its board. She noted that DME had a specific branch to deal with women issues. In the past DME had obtained list of students for its programmes from the Department of Education. DME was currently trying to prevent the same students from entering the programmes each year, that is, repeats.

Mr Douglas (ACDP, WC) said that in 2007 there had been a breach in security at the Pelindaba nuclear facility and asked what had been done to remedy the situation. He referred to the nuclear convention to which SA was to become a signatory and asked whether it would help to ensure better security at nuclear plants. Mr Douglas asked what was DME’s plan to deal with nuclear waste. He further asked whether the Darling Wind Farm project was in fact working.

Mr Maqubela replied that the nuclear convention enhanced security, as it would have obligations. He referred to the incident at Pelindaba and said that at no time was sensitive nuclear material at risk. An international inquiry had been done on the incident and the report had shown that at no time was sensitive nuclear material at risk. The inquiry was also satisfied with measures that had been proposed and implemented since the incident.

Mr Maqubela said that a nuclear waste management policy was being implemented. It had been approved in 2005. He noted that the draft legislation was currently with the State Law Advisor’s Office. The legislation provided for the creation of an agency for nuclear waste management.

Mr Masemela stated that Darling was a pilot project and if successful it could be used as an alternative source of energy.

Mr Kolweni (ANC) was concerned about electrification in rural areas and asked DME for comment. He referred to the use of biofuels as an energy source and asked whether there were projects in which the poor were benefiting. About DME’s statement that power for 2010 World Cup should not be a concern as it was being treated as a special project, he asked if this was DME or Eskom’s view.

Mr Maqubela replied that there was a huge debate over the issue of food security and the use of biofuels. SA’s policy was to exclude maize in its biofuels strategy. The issue was how to link the strategy with poverty alleviation. He noted that the rollout on biofuels had just begun.

Mr D Gamede (ANC, KZN) referred to the electrification of clinics for the current financial year and asked why there were none that had been electrified. He also asked what control measures were in place for the use of gels as fuels. Control measures for the use of compact fluorescent lights (CFLs) was also queried.

Mr Gamede felt that many of the measures in place for mine health and safety was for the long-term. He asked what was being done in the short-term. He queried the department’s vacancy rate. He referred to beneficiation and asked what punitive measures had been taken and asked what the local content was. He reiterated earlier concerns that not much had been said about disabled persons within DME. He lastly asked why two thirds of the DME’s budget was being paid to various councils. He asked what work were they doing, was the work research related?

Mr Masemela replied that the 2010 World Cup was treated as a special project and that funding had already been put aside for it. The capacity was there.

Mr Masemela stated that in 2007/08 the department had received special funding to eradicate electrification backlogs of clinics and hence all clinics were electrified. Hence the zero figure for 2009. He noted that there were control standards for ethanol gels and for CFLs. The oversight of CFLs however rested with the Department of Trade and Industry (DTI). The South African Bureau of Standards (SABS) reported to DTI.

Mr Msiza stated that the mining industry was required to have systems in place on health. He noted that DME had established mining groups in regional offices and that there were health inspectors to ensure compliance.

Mr Mnguni agreed to forward figures on the staff replacement rate and vacancy rate to the Committee shortly. He noted that there were challenges of high turnover rates for highly skilled and senior managers. Individuals were in demand and it was a challenge faced by public service as a whole.

Ms Zungu said that a detailed report on expenditure especially as it related to councils would be forwarded to the Committee.

Mr Sibiya (ANC, Limpopo) made reference to a situation in Limpopo where residents had asked Eskom to electrify an area and was told that the substation in the area was too small to handle the extra load. He asked what strategies had DME in place to assist Eskom in such situations.

The Chair referred to SA’s expansion of its nuclear power programme and asked what mechanisms were in place to ensure that there was no interference from other countries such as the USA. He referred to poor or non-compliance with the MPRD and asked for detail.

Mr Maqubela replied that SA’s nuclear expansion was for peaceful purposes, that is, power generation. He did state that some of the G8 countries were not in favour of some of SA’s activities. SA was entitled to do what it was doing as it was in line with non-proliferation treaties.

Mr Oberholzer said that poor compliance was often due to insufficient information or poor plans. Non compliance referred to illegal mining activities.

Ms Mchunu (IFP) asked why was mediatory action always taking place after incidents had happened at mines. She asked why there were no preventative measures.

Mr Msiza replied that safety culture and accountability was not where it should be. Penalties had been increased from R200 000 to R1m. Discussions had been undertaken with the Department of Justice on the level of prosecutions.

Mr Gamede asked if DME had met the required 2% disabled persons employment equity requirement.

Mr Mnguni replied that the figure was currently at 0.93%. DME has put measures in place to address the issue. In all there had been five disabled persons employed within DME but the figure had dropped due to persons leaving or passing on.

Mr Douglas referred to environmental impact assessment studies and asked if they had been done where mining was taking place on the Wild Coast and at St Lucia. He asked whether there was a possible oversight role for the Committee.

A female DME representative noted that environmental management plans needed to be set up by mining companies. The plans would set out the impact. She however noted that environmental impact assessments were done by DEAT.

Ms Themba asked why the employment figures of Coloureds and Indians in DME was so low.

Mr Mnguni responded that the replacement rate of Coloureds and Indians within the department was high. He said that there was an element of job-hopping. People had moved on.

The meeting was adjourned.




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