Hansard: Appropriation Bill: Budget Vote No 31 – Mineral Resources
House: National Assembly
Date of Meeting: 21 Apr 2010
Summary
No summary available.
Minutes
TUESDAY, 22 APRIL 2010
PROCEEDINGS OF EXTENDED PUBLIC COMMITTEE – OLD ASSEMBLY CHAMBER
_____________
Members of the Extended Public Committee met in the Old Assembly Chamber at 14:02.
House Chairperson Ms M N Oliphant, as Chairperson, took the Chair and requested members to observe a moment of silence for prayers or meditation.
The MINISTER OF MINERAL RESOURCES
START OF DAY
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order! I would like to welcome the Ministers and Deputy Ministers present, as well as the members and members of the public in the gallery. I believe that there are also some officials in the gallery. You are all welcome.
APPROPRIATION BILL
Budget Vote No 31 – Mineral Resources:
The MINISTER OF MINERAL RESOURCES: Hon Chairperson, Members of Parliament, the Director-General of Mineral Resources, management of Mineral Resources, Chairpersons, CEOs of mining companies, the leadership of trade unions, chairpersons and CEOs of state-owned entities, representatives of other stakeholders, comrades and friends, ladies and gentlemen, it gives me great pleasure to introduce to this House the debate on the Budget Vote of the Department of Mineral Resources for the 2010-11 financial year.
As you will recall, President Jacob Zuma announced the reorganisation of Cabinet and national government departments on 10 May last year. Amongst other things, the Department of Minerals and Energy was split into two, namely the Departments of Mineral Resources and the Department of Energy respectively, to ensure a realigned organisational structure reflective of the new functions as informed by the new mandates.
I am happy to report that the transitional arrangements in terms of which the Department of Mineral Resources provided support services to the Department of Energy has now come to an end. The Department of Mineral Resources is now fully established and employees have been matched and placed into the two newly created departments. In view of the global recession and the state's limited financial resources, the Department of Mineral Resources will be implementing the approved organisational structure in phases.
The process of splitting the Department of Mineral and Energy budget was successfully finalised in January 2010. This process culminated in the final allocation of R1,030 billion for the Department of Mineral Resources.
In response to shrinking financial resources, the department introduced a number of cost-containment measures and stringent controls to achieve more with less. These included scaling down the number of delegates on overseas trips, the suspension of international conferences and seminars, the hosting of meetings in close proximity to the department or in free venues, using public service circulars or free advertising for positions below director and so on. We will continue on this path.
The revenue collected for 2009-10 was R149,118 million against the projection of R165,357 million. The implementation of the Royalty Bills will result in a further reduction of our revenue collection as this function has since been moved to the SA Revenue Services, Sars, with effect from 1 March 2010. My department remains committed to sound financial management and discipline. We will continue the legacy of obtaining an unqualified audit opinion as was the case in the past five years with the Department of Minerals and Energy.
The Department of Mineral Resources will continue to implement our fraud prevention and anti-corruption strategy and plan. In addition, the department will continue to educate our employees on the code of conduct. We have also finalised our disaster recovery plan which will be implemented this year. We are also reviewing all our information systems with the aim of ensuring integration.
With regard to procurement, my department has managed to channel 45,4% of its procurement spending towards historically disadvantaged South Africans in 2009-10. Going forward, we are planning to develop a supplier development strategy in consultation with the Department of Trade and Industry. This strategy will assist in ensuring the participation of historically disadvantaged people in the procurement of specialised goods and services.
In line with our spending priorities for 2010-11, an amount of R67 million has been allocated for mineral policy and promotion activities. I recently convened a mining summit with all stakeholders under the auspices of the Mining Industry Growth and Development Task Team, Migdett, with the aim of developing a strategy for sustainable growth and meaningful transformation, seeking to position the country's mining industry along a growth path whilst simultaneously transforming it.
At this point, I must emphasise the mutually reinforcing nature of both growth and transformation, ie the one cannot be successful without the other. The development of a 2030 vision for growth and transformation is consistent with the second mandate of Migdett of recommending interventions to position South Africa's mining industry for optimal growth when the global economic climate improves. Our deliberations took place in a constructive spirit of tripartite collaboration, and we are positive that we have agreed on a significant number of issues which will enhance growth and the sector's global competitiveness, create decent sustainable jobs, and transform the industry in a manner that meets the expectations of the industry's stakeholders, investors and our country's citizens.
Equally, it's encouraging that all parties are committed to concluding work on the remaining consensus-seeking issues by the end of June 2010. As we all know, as of February this year, mining production grew at 6%, while mining revenue correspondingly increased by 8%, confirming that the recession is quickly becoming a thing of the past. We have completed the first phase of the mining transformation policy journey, which has provided us with the benefit of hindsight.
As we reviewed progress in terms of performance of the mining industry and the extent to which the transformation objectives have been attained, we found that we have seemingly made great strides towards the replacement of the original mistrust among key stakeholders with a growing spirit of collaboration. However, we also found that the cumulative performance of the mining industry in South Africa compares unfavourably relative to other mining jurisdictions, coincident with the longest synchronised commodity boom ever experienced, and suggestive of the structural challenges inhibitive of the attainment of the desired outcomes. This is corroborated by the regression analysis of cumulative annual volumes of production that have contracted during this time, with mining's contribution to the gross domestic product, GDP, in real terms correspondingly declining by 1%.
Accordingly, South Africa's share of the global exploration budget has systematically declined, from 8% in 2001 to less than 4% last year in real terms, although there has been a steady growth of this expenditure in nominal terms. Nevertheless, more than 80% of this budget is typically expensed toward exploration activities in existing mines, while an insignificant remainder of below 20% is dedicated towards green-fields exploration. The mining industry, therefore, cannot be sustainable unless it begins to invest in replenishing the finite nature of the current reserves and prolongs its future growth.
I am also aware of the recently published Fraser Institute Survey of Mining Companies, which indicates that South Africa has lost its global ranking from 27/47 in the 2002-03 survey to 61/72 in the 2009-10 survey on the institute's policy potential index. Whilst some may dismiss the survey as the product of conservative analysis, it does, however, have a profound influence on investment decisions. To the extent that this state of affairs can be attributed to the policy and regulatory environment which is within the authority and control of my department, I have specifically tasked Midgett, again, to integrate policy considerations in their input towards the development of the aforementioned strategy, which will not only restore but further enhance the country's ranking and render it a more attractive mining investment destination.
Despite considerable diversification of the country's economy in the recent past, the mining sector remains a key variable in our economic growth equation. For instance, in 2009, the industry contributed 9,5% to gross value added, 9% to total fixed capital formation, more than 30% to the country's total export revenue and it employed 2,9% of the country's economically active population, currently at just below half a million direct jobs and a further half a million indirect jobs.
In addition, the sector contributes 18% to the country's corporate tax receipts. The listed mining companies represent over 30% of the market capitalisation of the Johannesburg Stock Exchange. While mining activities consume 15% of national electricity, the mining industry directly contributes more than 95% towards the country's electricity generation.
South Africa is host to significant known reserves and resources of mineral commodities, with almost 60 minerals being actively mined and prospects for the exploitation of an additional two new minerals in the short to medium term. A large number of these known reserves were discovered using conventional exploration methodologies. For this reason, there still lies considerable residual potential for discovery of world-class deposits using modern exploration technology. This is further supported by existing mining infrastructure, which enables investors to leverage maximum value from their investment in South Africa, while at the same time contributing to sociopolitical improvement.
On the transformation of the mining industry, there's consensus among stakeholders on the limited progress attained to date. The rising tensions between mining companies and host communities, typically in rural areas, are symptomatic of serious challenges that face our intent to grow this industry in a sustainable manner. The impact assessment of the Mining Charter further illuminates lack of meaningful ownership vesting in the hands of its intended beneficiaries, due to, inter alia, the complexity of funding models underpinning transformation transactions.
These models are typically designed to benefit principal partners, financiers, legal advisers and other management firms to the disadvantage of the intended beneficiaries, who remain not only indebted but also in the absolute minority. This practice is contrary to the objectives of the transformation agenda and undermines the aspirations of the populace. This has also created an environment for fronting, at which targeted beneficiaries are not actively involved in mining project development, but more focused on making quick money.
Fronting is a disgrace and is a scourge in the realisation of effective transformation of the mining sector in South Africa. The levels of investment in human resources development for historically disadvantaged South Africans, HDSAs, falls significantly short of the target, which has also contributed immensely to the paucity of requisite skills reported at the height of the commodities boom. The living conditions of the workforce in the mining industry have improved marginally from the apartheid era, which is inconsistent with the transformation objectives. I have referred a detailed report of these findings to stakeholders as part of the broader consultative process and will be tabling it in Cabinet soon.
Skills development is the cornerstone of competitiveness of the industry. Earlier this week I spoke at a ceremony at which Gold Fields handed over R28 million worth of sponsorships to the University of Johannesburg and the University of the Witwatersrand in support of their engineering faculties, specifically aimed at supporting mining engineering. With these words, I would like to applaud Gold Fields for this important initiative and challenge other companies to follow and, indeed, do better, through this example. [Applause.]
I am introducing a more frequent monitoring and evaluation mechanism, which will constantly gauge the extent of compliance and transformation in terms of the regulatory regime. In this regard, my department is enhancing its scope with continuous regulatory impact assessment on legislation and policies developed and implemented in the mining industry. This will ensure constant evaluation of the impact of the policy and will enable the department to assess the socioeconomic impact of the legislation governed by the department. I will release quarterly reports to this effect.
.../TM
END OF TAKE
Chairperson, Cabinet has directed my department to undertake a detailed audit of the state's exposure to mining and to propose modalities of consolidating such interests into a single entity. To this extent, I am finalising the creation of the state-owned mining company to be considered by Cabinet during May. [Applause.] I am particularly encouraged by the overwhelming support of stakeholders during the Mining Summit for the finalisation of the state mining company, and I assure you that the work is being assiduously finalised - and to those who heckle: Hard luck.
I am delighted to announce that the Council for Geoscience has also completed and published the one-in-two-million-scale geological map for the entire Southern African Development Community, SADC, region. This map is a benchmark product, because it is the first integrated geological map for the region that will provide a common understanding of the geology between all the SADC countries. The map is already proving useful in the search for ground water and minerals in the region. As Africa unravels her geological complexity, additional potential for further mineral development is increased, which has the potential to address the socioeconomic plight of the host countries.
Beneficiation of our minerals is a priority for my department and, to this end, I have completed the necessary consultations and am ready to table the strategy before Cabinet within the next two months.
The importance of research and development aimed at supporting and expediting the country's expanded mineral beneficiation programme cannot be overemphasised. To this end, R165 million has been allocated to Mintek for 2010-11. Although the results seemingly take longer, they are generally worth the patience and the continued support of our science councils. But I must also indicate that research and technology for the mining industry cannot be a thing of the past. We need this with immediate effect. It is part of the future and growth of the industry.
The Geoscience Amendment Bill was endorsed by Cabinet in December last year and gazetted earlier this year. I intend to introduce this Bill to Parliament shortly. The main focus of the Bill is to effectively manage infrastructure development in dolomitic terrains, and empower the Council for Geoscience to be an advisory authority in respect of geohazards, as well as to enable the Council for Geoscience to become the custodian of all geotechnical data and technical information relating to exploration and mining. In terms of this, the department has allocated R136 million in support of the activities of the Council for Geoscience for 2010-11.
The diamond industry cannot be forgotten during this period. It was hardest hit by the global economic and financial crisis, resulting in prices contracting by more than 40%, during the year of recession, as well as job losses in the same magnitude. Accordingly, the industry has not responded adequately to a number of initiatives being put in place, all of which suggest an abundance of vulnerability within the sector. For instance, the business model of the State Diamond Trader, including the financing model, the structure, operational models and the inhibitive legislative provisions are the basis of the low performance of the State Diamond Trader. Therefore, I have instituted the urgent development of a comprehensive strategy for the diamond industry, which will seek to identify structural weaknesses in the structure of the diamond industry and recommend remedial action.
South Africa boasts a mining heritage in excess of a century, the bulk of which preceded the application of optimal mineral recovery technologies, as well as the implementation of a regulatory framework that is emphatic about sustainable development of the mining industry. The sole focus on economic benefit for an extended period resulted in a legacy of derelict and ownerless mines, as well as unrehabilitated mines, the cumulative environmental impact of which is beginning to exhibit clear signs of impact on the surrounding environments, including acid mine drainage, which pollutes ground and river-water systems, amongst other things. These are part of the legacy of the past. These are part of the legacy of apartheid and of the apartheid-era government not caring. Now we have to bear the brunt.
I have established a rehabilitation oversight committee within my department to drive the implementation of a rehabilitation programme for all mines which were licensed prior to the Minerals Act of 1991 and the Mineral and Petroleum Resources Development Act of 2002. I have also signed off on the rehabilitation strategy for these mines. I am now finalising the implementation plan and costs for the rehabilitation programme. An amount of R52 million has been set aside for the implementation of this programme for 2010-2011. I know members will say this is not enough, but this is the beginning of a positive approach to the rehabilitation of what belongs to our people in South Africa.
My department, through the Council for Geoscience, has been confirmed to host the 2016 International Geological Congress, which will attract a few thousand leading earth scientists from all over the world. This, once again, displays not just the importance of South Africa in the world, but also the importance of the scientific people in our environment. This is just as historic as the 2010 Fifa World Cup, because it is the first time in African history that this conference will be hosted on the continent. It is my intention to attract as many young people as possible not only to participate in the lead up to 2016, but also in the actual conference itself so that they can begin to appreciate that science is indeed really cool - that it is "Ayoba" - and to get them excited about careers in this field where they are much needed. The Council for Geoscience, in partnership with a few geo-institutions, has earnestly begun the preparatory process for the conference and is seeking to attain a long-lasting legacy in the geosciences for the country and the continent.
We have embarked on an initiative to review administrative processes and the current timeframes as prescribed by the Act, with a view to reducing turnaround times and being more transparent. During this review process, proper engagement and consultation will take place with other government stakeholders, such as the Department of Water and Environmental Affairs.
The turnaround times for processing applications for mining rights will be reduced from 12 to six months, whilst the turnaround time of applications for prospecting rights will be reduced from six to three months, but this comes with a caution. This cannot be reduced if applications are incomplete and not compliant. This only applies to those applications that are fully compliant. So, if you come with half-baked bread, you will not succeed. You must bear that in mind: if you remove the bread from the oven before it is well cooked, you will never get positive results. [Applause.]
With regard to the conversion of old-order mining rights into new-order mining rights, a number of such applications have been submitted, and we are currently processing these. The deadline for such applications expired on 30 April 2009, and those who missed the deadline have forfeited their rights; those rights have lapsed. As we process these applications, it is becoming clear that most applicants are not meeting the requirements. The most prominent noncompliance issue is the reluctance and even refusal by companies to embrace transformation. Most applications have not addressed the issue of black economic empowerment requirements, and this is of great concern to me.
The other area of concern is the quality of the social and labour plans which are not in line with the needs of the communities. The failure of companies to address these critical issues inevitably results in delays in the finalisation of their conversion applications.
In the last Budget Vote, we committed ourselves to ensuring that companies deliver on their social and labour plan commitments. Some companies have come on board and contributed significantly to uplifting both their host communities and labour-sending areas through their local economic development projects and have provided scholarships and bursaries. I commend these companies and say to them: Keep up your good work. And, to the bad companies, I say: We are coming; we are there for you. [Applause.]
The department will focus on conducting more rigorous compliance inspections. In cases in which companies fail to comply or default, we will enforce the law. Currently, R174 million has been allocated for the implementation and enforcement of the Act.
However, hon members, our health and safety track record in the mining industry continues to be a matter of concern. In the past year, the industry has managed to record a year-on-year slight reduction in fatalities owing to accidents in the industry. A total of 165 mine employees died in 2009 as compared to 171 in 2008. I am still very concerned about the high number of fatalities in the mining sector. As we know, one death is one too many. Consequently, many families lose their sole breadwinners. Fall-of-ground accidents still remain the largest accident category and the predominant cause of fatalities followed by the transportation and machinery category.
Occupational health impacts are not immediate and hence difficult to quantify. Silicosis remains a major cause of premature retirement and death at South African mines owing to excessive dust exposure. On the other hand, tuberculosis continues to be a serious challenge for the mining industry and this is exacerbated by HIV/Aids. Lastly, noise-induced hearing loss is also a significant health hazard owing to exposure to high levels of noise in the workplace.
To deal with these pressing occupational health and safety challenges facing the industry, the department has recently embarked on a number of interventions, which include the implementation of the amendments to the Mine Health and Safety Act to improve enforcement and prosecution; work being done to improve seismic network coverage and seismic systems integration to assess actions taken by mines in dealing with high-risk areas which are prone to seismic events; and the health capacity of the inspectorate being improved by the establishment of a new Chief Directorate for Occupational Health and the appointment of additional health inspectors in our region. An amount of R145 million has been allocated toward these health and safety programmes.
We are currently experiencing problems between mines and surrounding communities owing to blasting operations that cause damage to houses, nuisance dust and noise. In addressing these challenges, we are developing a comprehensive strategy with an emphasis on blasting, vibration, noise and dust control, and we will regulate these where necessary.
The current legislation on compensation matters in the mining industry needs to be urgently overhauled so as to address issues relating to access to services and information and turnaround time on payments and compensation. There are collaborative efforts between my department and the Departments of Labour and Health to review the compensation legislation and develop an integrated compensation system.
Although illegal mining is a problem in South Africa, I must indicate that the Department of Mineral Resources is not responsible for illegal mining, and we are not a department or Ministry for illegal mining. Illegal mining is a criminal activity and has to be treated that way. [Applause.] Therefore, because this is not an area where we have competency, we have referred this matter to the interministerial security cluster, as this is a criminal issue. The department and other relevant departments must ensure that there is a need to fight the matter of illegal activities within the mining industry, including the stealing of copper wire by various people, causing a lot of blackouts within our communities.
IsiZulu:
SIHLALO: Ngqongqoshe isikhathi sakho sesiphelile. Kodwa ukuze amalungu aqondisise ukuthi yini lena ofuna ukubatshela yona ukuze nabo bakwazi ukuphendula. Uzothatha imizuzu emithathu esikhathini sakho sezimpendulo.
English:
The Mine Health and Safety Council has budgeted R29 million to support the achievement of zero harm to mineworkers through a comprehensive research programme. The council continues to drive the implementation of the outcomes of the Tripartite Leadership Summit and the recommendations of the presidential summit.
The Mining Qualifications Authority, MQA, has allocated almost R280 million to support the mining and minerals industries with skills development. There is a great need to partner with Further Education and Training Colleges in areas where there is significant growth in mining. Work experience is important for graduates in the mining area, in mining engineering, and geology, and metallurgy. The MQA supports this initiative through the allocation of bursaries to about 500 learners who are studying mining-related qualifications at different universities. I must emphasise that we will be revisiting our strategy to address challenges, in terms of which internship and learnership programmes are sometimes abused by the replacement of experienced mineworkers with interns. This is an unacceptable practice on the part of mining companies, and we will be dealing with this issue decisively.
In conclusion, Madam Chair, there seems to be consensus amongst economists that we have weathered the stormy seas and that the global economy is on the mend. I would therefore like to emphasise that for my department to realise its vision and goal of a transformed minerals sector, our collective efforts, commitment and partnership will be paramount. The mammoth task that lies ahead of us cannot be achieved by any one individual organisation, but through our meaningful yet distinctive contribution, collaboration and partnerships we will create value for our fellow South Africans and investors through the sustainable exploitation of our mineral resources. It is therefore critical for us as stakeholders and partners to continue having robust debates, engagements and action with the aim of growing and transforming the minerals sector. I thank you. [Applause.]
GG//Mia
END OF TAKE
Mr M F GONA
The MINISTER OF MINERAL RESOURCES
The HOUSE CHAIRPERSON: Thank you, hon Minister. I now call the hon M F Gona, the chairperson of the portfolio committee.
Mr M F GONA: Hon Chairperson, hon Minister and Deputy Ministers present here, leadership of organised labour, leadership of organised business, officials of the Department of Mineral Resources lead by the director-general, Advocate Nogxina, comrades and fellow South Africans, in case I run out of time so say so, let me, from the outset, state that the ANC supports this Budget Vote. [Applause.]
We base our support on the all-embracing theme that "Working together we can do more". This theme reverberates throughout government departments, reflecting a clear response to the state of the nation address by the President, the hon J G Zuma. This is a theme which is even more relevant to all stakeholders in mining, particularly in our present-day circumstances.
Once more, I would like to dedicate this speech to the thousands of mineworkers who have perished in this industry over many years of mining in this country. This Parliament extends heartfelt condolences to the families and loved ones of the deceased.
It is important for us, when we speak about this industry, to trace some historical background. South Africa's mineral industry, largely supported by gold, diamonds, coal and platinum-group-metal production, has made an important contribution to our economy. It has provided the impetus for the development of an extensive and efficient physical infrastructure and has contributed greatly to the establishment of the country's secondary industries. Mining remains South Africa's largest industry in the primary economic sector, followed only by agriculture.
Mining continues to be South Africa's principal earner of sought-after foreign exchange, as the hon Minister has demonstrated clearly in this House, although levels of earning are declining. During the 1990s, mining directly generated 41% of total exports, approximately the same as the fast-growing manufactured goods export sector. From the year 2007 real fixed investment in the mining sector improved by about 14,8%. Unfortunately, this improvement was insufficient to compensate for the declines that had taken place in 2004 and 2005, with the result that production fell by 1,5% in 2006.
We further recognise the fact that, notwithstanding the sometimes jittery mood of the investor community owing to some perceptions, the mining sector continues to act as a magnet for investment in South Africa. You have to listen, my friend. The portfolio committee has just resolved to play its expected role to address both the genuine concerns and the perceptions of the investor community.
The mining industry continues to make tangible contributions to the gross domestic product of the country, as the Minister demonstrated. Mining remains amongst the leading sectors on job creation, with employment levels currently estimated at more than 330 000.
In this regard, hon Chairperson and Minister, we acknowledge and applaud the role played by the Mining Industry Growth, Development and Employment Task Team, Migdett, the multi-stakeholder team that was established in December 2008 as a direct response and attempt to mitigate the negative impact that would result from the global financial crisis – which, I must add, was not of our own making.
Indeed, these efforts have been successful in reducing the potentially high numbers of job losses in the mining sector. These numbers were estimated to be around 100 000. Instead, only approximately 35 000 jobs were shed by the industry. This figure, however, is still high when considering the number of dependants of these mineworkers. This intervention demonstrates the correctness of our theme of "Working together we can do more", because Migdett is a multi-stakeholder body. Everybody made a serious contribution to put us in that kind of a situation.
The historical and current factors discussed above have been made possible by the fact that South Africa is endowed with rich mineral resources. This country is home to vital and the most diversified mineral reserves in the world. This includes, but is not limited to, the platinum-group metals at a world level of about 70%, gold at 40%, manganese at 70%, chromium at 70%, and many other mineral commodities that include diamonds, titanium, bituminous coal, anthracite seams, copper, phosphate, iron; the list continues.
This extensive mineral wealth is a common heritage to all South Africans. Section 24(b)(iii) of the Constitution of South Africa guarantees everyone the right to "secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development". Through this section and other relevant provisions in our Constitution, we as public representatives, all of us in this House, are enjoined to ensure that benefits that accrue from the development of our minerals be enjoyed by all South Africans. Therefore, the question is: Do we all benefit equitably from this mineral wealth? This is a very clear question. [Interjections.] Wait! You will answer me later.
In order to answer this question in a frank and objective manner, without being partisan, our sober minds are called upon here to be applied to this situation. To answer this question in a more frank and objective manner, we need to examine a few socioeconomic developments that have a direct bearing on the current political conjuncture in our country.
Sixteen years into our democracy South Africa continues to be faced with the serious challenges of rising levels of poverty. Political and economic analysts agree with us. They estimate that approximately 40% - I repeat, 40% - of South Africans are living in poverty. They also estimate that approximately 15% of our population is living in abject poverty. More than the majority of these poor people within our society continue to be black South Africans.
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SN
We have high levels of unemployment. In its latest report, Statistics SA reflected that in the period of October to December 2009, the official rate of unemployment was 24,3%, and indeed if we use the expanded definition of unemployment, this rate would be much higher than the 24,3% referred to.
South Africa was recently been declared the world leader in the arena of the most unequal societies, and gap of inequality continues to rise. [Interjections.] The huge backlogs in the delivery of housing, water and sanitation infrastructure, schools and other institutions of learning, health care facilities and other public amenities, reflect a situation in which this country is faced with serious challenges.
Therefore, given the picture depicted above, anybody in this august House who can give an affirmative answer - as you have just done, hon member - to the question posed in this submission, would be pretending to be living in another country somewhere or, worse, would be pretending not to be living on planet Earth. Maybe you're living on Mars somewhere, observing planet Earth at a distance.
Therefore our patriotism, our love and our commitment to our beloved country and the future of generations to come is being invoked at this juncture. So, we are saying that you must put aside your ideological affiliations and political beliefs and look at the objective situation as it obtains on the ground.
As a caring organisation, therefore, the ANC, in response to this challenge, took a progressive resolution at its watershed Polokwane congress in December 2007 in that we must, among other things, establish a state-owned mining company, something the hon Minister has referred to. [Interjections.]
The TEMPORARY CHAIRPERSON (Ms M Oliphant): Order, hon members!
Order, please!
Mr M F GONA: You must listen. We are teaching you here. The primary task of this state-owned mining company is to amass the necessary resources to enable this developmental state to address these huge socioeconomic backlogs.
You can't wish them away. You can never wish them away. Let me give you a lecture once more ... [Interjections.] You can never have a bastion of wealth in a sea of poverty. You would never enjoy that wealth. That is granted. [Interjections.] [Applause.]
This resolution, therefore, is in line with clause 3 of the Freedom Charter that discusses the sharing of the country's wealth that: "The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole."
The democratic government, led by the ANC, has already operationalised the relevant part of this resolution through the enactment of the MPRDA, the Mineral and Petroleum Resources Development Act, in 2002. The Ministry of Mineral Resources and the department were successfully established in a short space of time. Congratulations, hon Minister, and your department; you were able to form yourselves in a short space of time. [Applause.] The Ministry and the department are ready to further advance the fulfilment of these ideals that were declared by our people way back in 1955.
The need for job creation in the country remains a challenge. The mining industry remains an important catalyst for the attainment of this goal. In this regard, we are aware that the Department of Mineral Resources is in the process of developing at least three important strategies that the hon Minister has referred to. They are the strategy on the local beneficiation of our minerals, the strategy on the promotion of small-scale mining, and the strategy to rehabilitation the ownerless and derelict mines, which you have correctly characterised as an apartheid legacy in terms of the burden that faces this democratic government. We trust therefore that there will be buy-in and maximum co-operation by all producers within the industry.
We are seriously concerned about the apparent slow progress of transformation in the industry. Transformation in the mining industry – if we might remind all of you - is a legal imperative, as provided for in section 100 and other relevant sections of the MPRDA. We agree with you, hon Minister, that where there is no compliance, action must follow.
Patterns of ownership are reportedly remaining skewed in favour of previously advantaged South Africans and both natural and juristic persons of foreign origin. The levels of illiteracy and numeracy are reportedly at about 67% of the workforce in the industry – a terrible situation.
The focus on skills development remains insufficient. Yet education is declared by the President of this country, by more than 60% of the country's population and also by the democratic government, as one of the five key strategic developmental priorities.
The implementation of employment equity requirements is selectively undertaken with a reported disproportionate biasness towards white women. Scandalous! Scandalous! Mining communities and new entrants in the mining industry remain excluded and marginalised.
The diagnosis of occupational-related diseases, such as the Minister pointed out, silicosis and pulmonary tuberculosis reveals high levels of exposure of mineworkers to hazardous materials and unhealthy living conditions, such as single-sex hostels and the surrounding shacks.
The levels of fatalities and accidents remain unacceptably high compared to other mining countries. The portfolio committee has acknowledged and pledged its support for the efforts and attempts made by the Mine Health and Safety Council to address these challenges.
We further take serious note of the endeavours and co-ordinated efforts by Simrec, the Safety in Mines Research Advisory Committee, the Council for Geoscience and Mintek in the research and development of technological capabilities that would enable the industry to detect and receive early warnings on seismicity. This will enable us to curtail the high levels of fatalities that are mainly caused by rock falls and rock bursts. We need not remind this House that this is also among the key priorities.
Hon Minister, let me come to the challenges that we have picked up when we were deliberating on the Budget Vote. The issue of capacity in your department is one of the uppermost issues in our minds that we would like you to attend and that of the State Diamond Trader.
The issue I want to speak to you about, Minister, before my time is up is the matter of single-sex hostels. These hostels must go by 2014, because they are not only a legacy of apartheid but a remnant of the cornerstone of the apartheid system: the migrant labour system. They also perpetuate the ... [Time expired.] [Applause.]
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Mr H C SCHMIDT
Mr M F GONA
Mr H C SCHMIDT: Hon Chairperson and colleagues, I'm not sure whether Mr Gona's admission – that, under the ANC government for the past 16 years, the Gini co-efficient has progressed to being one of the worst in the world – is basically an admission that we need a new government; that they have failed! [Interjections.]
However, returning to my speech, recent mining production figures published by Statistics SA show that mining production declined by 6,7% year on year and fell by 5% in 2008. The decrease in annual production of diamonds and, in particular, gold, confirms a growing concern that mineral resources are finite and that mineral regulation is of the utmost importance in maximising its contribution to much-needed economic growth.
The proverbial resurrection of the state-owned African Exploration Mining and Finance Corporation, the AEMFC, formed in 1944, indicates ominous signs which reflect the state's view of its role in mining affairs. Applications for prospecting rights by the AEMEC were recently lodged on wine farms in the Western Cape and in other parts of the country. Whilst the applications in the Cape winelands were withdrawn due to major public opposition – and the director-general's publicly stated view that mining and wine farming were irreconcilable, a view that is strongly supported – many other applications are still pending. Government has no right to partake in private-sector mining activities. It has made a mess of SAA, Transnet and many other state-owned entities, not to mention Eskom. The state now strangely considers itself fit to venture into mining activities.
When considering the reasons for government's participation, it becomes clear that the underlying motivation with regard to Eskom and the Chancellor House deal, resulting in massive financial benefit accruing to the ANC, is also applicable here. The decision by the Minister to grant numerous exemptions to the AEMFC, exempting it from having to apply for prospecting and mining rights, as well as mining permits, is at best ill considered. At the least, these exemptions should be withdrawn in order to allow for a level playing field between the private sector and the state-owned company, if any. The state, as regulator, should be in a position to distance itself from the mining sector to ensure objectivity in the awarding of mineral rights to applicants.
The Kumba-ArcelorMittal clash has been overshadowed by the department awarding, under strange circumstances, a prospectingright to an ANC-linked company in an instance where only a mining right could have been awarded. It is on record that Kumba lodged an application with the department for the 21,4% undivided mining right formerly held by ArcelorMittal which they admittedly failed to apply for.
Imperial Crown Trading Company, ICT, a company whose directors have strong ANC links, was, surprisingly, awarded the mining rights, whilst the application of Kumba, a well-respected mining company, was turned down. ICT appears to be no more than a shelf company with no proven skills to prospect, let alone mine, hence the possible motivation for incorrectly awarding a prospectingright where a miningright is applicable. Its ability to mine and its access to capital can only be limited, if not non-existent. It is clear that a previous employee at Luthuli House, Andrew Hendricks, the husband of the previous Minister of Agriculture and a senior official at the National Union of Mineworkers, NUM, all serve on the board as directors.
Such apparent self-enrichment schemes by members closely linked to the ANC is concerning, whilst the involvement of a senior member of a major mining union is difficult to justify in light of the plight of its own members.
Minister, if this government is serious about the minerals sector, ostensible fraud and underhandedness by officials in the department in the awarding of mineral rights will only lead to growing dissatisfaction amongst applicants and the public and will lead to obscure results. We are aware that the department has indicated that it is duty-bound to consider so-called internal appeals to the Minister, but more often than not these appeals seem to be a futile exercise as they are, as a rule, turned down. Recent media reports, for instance, indicated that an ANC MEC in the Northern Cape continued to mine whilst not having the rights thereto, without any consequences.
'n AGB LID: Skandelik! [Scandalous!]
Mr H C SCHMIDT: Little, if anything, seems to be done by the department except but to watch how the laws it is supposed to uphold are broken by ANC members holding high political office. This cannot be tolerated.
Whilst a recent report by the Auditor-General indicated that the liability relating to the rehabilitation of abandoned and ownerless mines amounted to approximately R30 billion, the department has seen fit to allocate only R52 million towards the rehabilitation of those mines. Without taking inflation into account, it will take government approximately 60 years at this rate to resolve this immense problem. Clearly, not enough resources are being allocated to this function.
The picketing by a few thousand members of the ex-Mine Workers Union outside Parliament today is indicative of the failure by government to resolve the issues satisfactorily. Despite having convened a parliamentary committee in 2008 to resolve the concerns of the Union, no effective resolution has been reached. [Interjections.]
The TEMPORARY CHAIRPERSON (Mrs M C Mabuza): Order, hon members! Order, please!
Mr H C SCHMIDT: This matter clearly requires government's urgent attention. [Interjections.] Or, could I just say, it was stolen by the Eastern Cape government – ANC government. [Interjections.]
Growing frustration is emerging from applicants for mineral rights relating to the transparency of applications submitted. Allegations of queue jumping by applicants alleged to have abused the process requires the implementation of a tracking system whereby an applicant can monitor the progress of an application. Fears relating to the similarity of applications reflected in the application documents of competing applicants should be addressed. It would ensure that applicants do not waste valuable resources and time submitting an application only to be informed that their application has been preceded by another application, strangely enough.
The management of Aurora Management Services at the Grootvlei mine on the East Rand in Gauteng, with whom family members of both President Zuma and former President Mandela are involved, has led to disastrous consequences. Whilst the Grootvlei mine is still in liquidation, mineworkers have not been paid – in some instances for up to two months and longer – leading to severe financial consequences for the families of those involved. An urgent solution to this matter is required, whilst mindful of the fact that the state should not incur liabilities with regard to the current environmental consequences and the continued pumping of acid mine water from the mine.
Whilst fronting is not acceptable and should not be tolerated for obvious reasons, we have recently come to experience a new form of fronting which entails applying with the assistance of friends at the level of the regional offices and the office of the Council for Geoscience and the subsequent granting of mineral rights to individuals without the required expertise or funding to effectively conduct the appropriate mining activities.
It is also understood that applications for mineral rights have, in certain instances, been redirected by officials in the department to individuals and companies who have acted on inside information from within the department and who were subsequently allocated those mineral rights at the expense of the genuine applicant. It is believed that these individuals then approach companies, private companies and institutions with the request that they - or him or her - be made an offer for the relevant mineral right granted by the department. This approach is clearly as unacceptable and as legally and morally reprehensible as the incidence of frontingby certain companies and firms.
Whilst those involved would naturally prefer not to step forward and declare their corrupt activities, these kinds of irregularities can only be resolved once an open and transparent system of registering and tracking applications has been implemented by the department.
Upon a parliamentary question to this hon Minister, it was stated that the department was using the National Mining Promotion System and was investigating the possibility of integrating the Cadastral maps into the system.
That, with respect, is not enough and does not deal with the concerns raised above, leaving the applicant to apply merely in terms of the Promotion of Access to Information Act, which does not address the above concerns. The question can quite validly be asked, why not, when the consequences are so detrimental and the process prone to corrupt practices.
In conclusion, it needs to be stated that the Mining Charter and the review thereof need finalisation. Certainty for investors is of the utmost importance in creating a viable and sustainable investment climate. We should not spoil it by allowing uninformed and malicious remarks to be made by young individuals who have their own interests at heart and not that of the mining industry or the intended beneficiaries, which the new dispensation, heralded by the implementation of the Mineral and Petroleum Resources Development Act, was intended to facilitate. I thank you. [Applause.]
The TEMPORARY CHAIRPERSON (Mrs M C Mabuza): I thank you, hon member. Hon members, I would like to remind our guests in the gallery that they are not allowed to use cameras.
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Mr P D DEXTER
Mr H C SCHMIDT
Mr P D DEXTER: Chair, yesterday the chairperson of our committee said to us that he hoped that there would be no surprises today, but he was the best surprise of all, because he gave the best opposition speech I've ever heard. It was wonderful to hear, Chair, and I'm glad to see that you are on our side now. [Interjections.]
I also want to mention, Minister, the heckling from the ANC towards the DA, saying "their government": in fact, the former National Party is part of the ANC. That was the government, not them. [Interjections.]
Anyway, Minister, on a more serious note ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mrs M C Mabuza): Order, hon members!
Mr P D DEXTER: On a more serious note, Minister, I must say that I was pleased that you mentioned the Fraser Institute report, because we've been very concerned by what was in that report. Barry Sergeant of Moneyweb wrote an article on this. What is really of concern is that we are now ranked 61 in 72 countries. We managed to beat Zimbabwe and the DRC, and I think that's nothing to be proud of. The data that was used for this report came from over 3 000 companies in the industry, and although it's based on their perceptions and opinions, I think it's very important that we don't be blasé or defensive about this. I was really heartened by your stance, Minister, that we must take it seriously and try to find a way to engage with these issues in order to overcome those perceptions.
But, unfortunately, debacles such as the Sishen mining-rights grab that has been mentioned already, the ANC-linked Chancellor House mining company activities, and things like the Grootvlei mine, don't really assist with the image of the industry or of our country. I think these are the challenges that require your immediate attention, Minister. You really have to walk the walk and not just talk the walk about tenderpreneurs, even if they are people from your own organisation.
When it comes to the perception of corruption, although the incidents are isolated, I really think that those of us in the portfolio committee can attest to the fact that it really is a shame, because when we engage with the department in that committee, it is quite clear that they are taking seriously the issues and making a genuine attempt to address the challenges facing the industry. I think it's been really refreshing for us to engage with officials who are open and frank about the problems, rather than being defensive. But it's no good that we have that engagement while we have people outside undermining the efforts of a department that's trying to do the right thing.
Some of the concerns that the committee has identified and engaged the department on include the pace of transformation, illegal mining and the contamination of the water table in Gauteng, and opportunities for small miners. I would like to add an issue, Minister, that I hope you will take up – and it is the competitiveness of the mining services industry in our country.
Given all the experience of mining in South Africa, more of our companies in this sector should be continental or global players, but unfortunately they're not. Canadians and Australians are snapping up all the opportunities on the continent, and beating our companies to the finish line. I think that's because, although we prioritise mining, the government, in terms of industrial strategy, has not prioritised that sector. I know it doesn't fall under your immediate department, Minister, but quite clearly the Department of Trade and Industry is not taking this seriously. In the committee we have agreed that we will engage with the department, but I think if you were to champion it as well, Minister, it would go a long way.
The biggest problem that we face in the country is that we've got all this mining potential but we don't have the capital to realise these opportunities. I think the main challenge is that we don't have a coherent vision or strategy of how we're going to ensure that companies mine in a sustainable way while we engage with the issue of transformation.
As we have observed in the committee, transformation is slow and the industry is still dominated by a few big players. But something will have to give if there's going to be transformation, and that's the debate that we need to have. This is because transformation isn't only about the numbers of women or the number of black people in the industry; it's also about bridging the wage gap between workers and the management in companies. It's also about ensuring that there are opportunities that benefit everybody in our country, rather than a select few individuals. And, importantly, it's also about mining in a way that leaves a positive legacy for future generations.
I was in Kimberley at the spot where the road has collapsed because there's been no rehabilitation of a mine of one of the big companies there. We've seen this issue of the poisoned water table in Gauteng, and it's those sorts of things that we, as future generations, are going to have to pay for. I'm very happy, Minister, that you have taken up this issue and that you are going to deal with the issue of a rehabilitation programme. But the truth is that government also has to take a tougher stance on this issue in relation to private companies, because I think that they've been getting away with murder. In the future, we, as a country, are not going to be able to fund continually cleaning up after people who have made super profits, and then leave and go overseas.
In addition, we know that the global economic crisis – which we know has cost the industry anywhere between 100 and 150 000 jobs – is thankfully and hopefully at the tail end, and the industry is now back on the upswing. But last time around, when we had an upswing, we were unable to capitalise on it as a country. We missed the last upswing in terms of resources. I think one of the things that you will have to do, Minister, is tell us how you intend ensuring that we have a strategy as a country to take the next global upswing of resources and benefit in a sustainable way.
Part of that debate is how we reconfigure the relationship between government, business and labour. Currently, I don't think that we are seeing the best coming out of the industry, because of the combative nature of some of the issues that are raised around transformation; but, equally, I think that the reality is that workers in this industry have taken such a beating over the years, their unions are weak, and they are not able to make the kind of contribution that we need to ensure that we have a sustainable industry.
I'm glad also, Minister, that you spoke about beneficiation, but we must be honest: We've talked about it forever. We are really paying lip service to this issue. Minister, what practically are you going to do to ensure beneficiation? We say it every year, but we don't see anything. We've got institutes and we throw money at them, but what is the concrete strategy to promote beneficiation? That's what you have to tell us. What is the policy mix that will make our country attractive to investors while ensuring transformation? Thank you. [Time Expired.] [Applause.]
Mr E J LUCAS
Mr P D DEXTER
Mr E J LUCAS: Chairperson, the IFP is very pleased to see that the Mining department has been able to retain most of its staff members. The department is currently faced with serious challenges, and they will need all the support that they can get in order to overcome them. One of these challenges is being able to cope with a budget that seems insufficient to meet the task at hand.
Within the industry itself, we have the following concerns. These concerns need special attention in order for us to deliver on transformation. The first concern is small-scale mining. We support the idea of small-scale mining projects as they are excellent vehicles for allowing disadvantaged communities to enter into the industry. There are, however, a few obstacles to this process which must be overcome, the most notable being the obtaining of the necessary finances in order to start up such an enterprise.
Most small-scale miners have little difficulty in acquiring the requisite prospecting licence. It is the next step, namely that of obtaining finance that hinders them from entering the industry, as finance houses are loathe to give money to what they deem high-risk start-ups. This leaves small-scale miners with no other alternative but to seek private finance. The problem with this is that most private financiers require exorbitant returns on investments and on shares in the start-up business and this results in the licence holder being sidelined, resulting in fronting.
The IFP would like to see greater involvement from the department in respect of providing or even sourcing technical and financial support for small-scale mining individuals.
The beneficiation of our natural resources must begin as soon as possible. It is an issue that we have skirted around for far too long. It is a big step, but its rewards for South Africa will be just as big. It will create employment and boost the mining sector, thus greatly benefiting our economy as a whole.
International investors must be encouraged to invest in our mining sector. A favourable climate must be created - one that lends itself to South Africa being chosen as the investment destination of choice. Loose talk regarding nationalisation doesn't inspire confidence in international investors, and will not assist us in attracting investment into our country.
Illegal mining operations are another serious area of serious concern. This is not only because of the many injuries and fatalities that occur, but also because of the fact that this unlawful activity is openly financed by certain individuals who seem to operate above the law and without fear of any criminal sanction. Where are the police? Without finance or market demands these practices would cease to occur. Why are they being so ineffective in curbing this illegal industry?
Sustainable development in the mineral and mining sector, as well as the creation of employment, should be our key focus at this economic juncture. Our country has great mineral wealth which can and should play a significant role in our rapid emergence from the current global economic crisis. The IFP supports the Vote. Thank you. [Applause.]
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Mrs N F MATHIBELA
Mr E J LUCAS
Mrs N F MATHIBELA: Hon Chairperson, hon Ministers, hon Deputy Ministers, honmembers, ladies and gentlemen, I am honoured today to take part in this debate at a time when we are celebrating Tata Nelson Mandela's 20-year anniversary of his release from prison. It is also a very important year as we are going to have the 2010 Soccer World Cup.
President Jacob Zuma said we have in the fourth Parliament five key priorities, which we have to make sure we deliver on as it is time we speed up service delivery. The five priorities are health, education, jobs, fighting crime and rural development.
I am going to talk about mine health and safety, which are the most important things in terms of mines. As it is said, a healthy country has healthy workers and a healthy economy. The men and women who work in the belly of the earth in terms of mineral resources are very critical to the country's growth.
Worker competitiveness is one of the fundamentals. We have to make sure that they are in a good and healthy condition and that they are not exposed to diseases such as TB, HIV and Aids, mine dust and loss of hearing.
The department has sent 14 health inspectors for training. This is a sign of a caring government. However, the industry is still not yet ready to treat workers like people who are worth respecting as they lack privacy and still share accommodation.
Mining has unique circumstances that impact negatively on disease burdens. In the mines, diseases can be categorised into two broad types: firstly, to diseases directly attributable to mining, such as silicosis; and, secondly, to occupational diseases such as HIV and Aids, TB from silicosis dust and hearing loss. These diseases are being increased by the disruption of family structures, overcrowded accommodation and social ills.
The reduction of hostel occupancy from 16 to four people is unacceptable. The conversion of hostels into family units and the promotion of home ownership are totally inadequate.
There is also not enough balanced nutrition owing to the outsourcing of balanced nutrition service providers.
In 2003 the industry set targets for the elimination of silicosis.
Of the targets set in 2008, 95% of all exposure measurement results are below the occupational exposure limits for respirable crystalline.
The legacy of derelict and ownerless mines continues to impact negatively on the licensing of mining operations, despite the fact that the current operational mines have met their responsibility, as this relates to the maximum compliance with the prevailing legislative regime and relevant best practices.
South Africa has a long history of mining. With the promulgation of the Mineral Act of 1999, it has only recently developed and implemented comprehensive legislation to regulate the environmental management and mining closure process. However, to date, South Africa has developed comprehensive legislation and policies on health, safety and environmental management issues, and in terms of the entire governance of the minerals industry.
Most of the compliant current operational mines, in particular the chambers, have therefore implemented systems, programmes and measures to effectively manage health, safety and environmental impacts resulting from mining activities. This is part of ensuring that the existing industry does not create unsustainable legacies in the future.
The current operational mines do not have any legal obligations or responsibilities owing to a large number of historical mining operations that have been abandoned by their operators, as they relate to the legacies, with little or no regard for their impact on public health and safety or the environment.
Preliminary estimates of the Department of Mineral Resources are that there are 5 096 derelict and ownerless mines in South Africa, resulting in an approximate R30-billion liability for the government. The liability estimation excluded the costs of management and treatment of acid mine drainage by the state.
In many cases, these derelict and ownerless mines have a significant impact on the health and safety of local communities and on the environment. Public health and safety impacts include those owing to physical features of the mines such as open shafts, unstable slopes on dumps and pits, collapsed features and abandoned mine infrastructure. Other hazards have resulted from contaminated water and soil, mining chemicals, explosives, radioactivity, wind-blown
dust and, in the case of coal mines, the spontaneous combustion of coal and coal waste.
In light of the current rate of the implementation of the
rehabilitation programme by the Department of Mineral Resources, this impact will haunt the industry for many years in the future.
The Auditor-General recently raised concerns in Parliament and the media about the impact of these mines that continue to plague the industry. This happened irrespective of the fact that the current operational mines are taking their responsibilities and comply with the necessary obligations. Moreover, in the areas of cumulative and integrated impacts, pollution emanating from the derelict and ownerless mines has a direct impact on the current operational mines.
A policy challenge, in terms of the Minerals and Petroleum Resources Development Act, is that any investor interested in mining an unrehabilitated, abandoned or ownerless site has to take over the entire liability on site. As a result, new businesses are unlikely to invest in areas where pollution from old dumps is still a threat given the cost implications. Furthermore, these mines also have a direct impact on current operational mines, especially in instances in which these mines occur in the vicinity of the current operational site.
Mining has unique circumstances that impact negatively on the disease burden. Diseases in mining can be categorised into two broad types. The first category is directly attributed to mining, such as silicosis and occupational TB from silica dust and noise-induced hearing loss. The second category is that of diseases such as HIV/Aids and nonoccupational TB, which are due to indirect factors.
In 2003, the industry set targets for the elimination of silicosis.
With regard to industry targets for the elimination of silicosis by December 2008, 95% of all exposure measurement results had to be below the occupational exposure limit for respirable crystalline silica - 0,l mg per m3. These results are individual readings and not average results. After December 2013, using present diagnostic techniques, no new cases of silicosis should occur among previously unexposed individuals. The present noise exposure limit specified in regulations is 85 decibels. After December 2008, the hearing conservation programme implemented by the industry must ensure that there is no deterioration in hearing loss greater than 10% amongst occupationally exposed individuals. By December 2013, the total noise emitted by all equipment installed in any workplace must not exceed a sound pressure level of 110 decibels.
According to data from the Department of Mineral Resources, there has been an improvement since 2005 in meeting the target for silica dust - 95% of dust measurements being below the occupational exposure limit, although a slight regression was recorded in 2007. There is no report to indicate if the target was met in 2008.
The number of silicosis cases has not decreased and has stabilised around 1 600 reported cases per year since 2006. It remains to be seen if people who entered the industry in 2008 will have silicosis by 2013. But cases of silicosis will still occur.
The rate of claims for noise-induced hearing loss has shown a steady decline over the years and there is a real possibility that industry targets can be met. More than 80% of employees in 2007 were still exposed to machinery-emitting noise levels greater than 85 decibels. The ANC supports this budget. [Time expired.] [Applause.]
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Mrs M N MATLADI
Mrs N F MATHIBELA
Mrs M N MATLADI: Hon Chairperson, South Africa accounts for over 10% of world gold production, and is the leading producer of precious metals, such as gold and platinum, as well as base metals and coal. It is the world's fourth largest producer of diamonds. This is something to be proud of, but the question is: Should we be proud?
The mining industry is also South Africa's biggest employer, with around 460 000 employees, and another 400 000 people employed by the suppliers of goods and services to the industry. Currently, more than 70% of the mining industry's labour force is black, while less than 5% of managerial positions are held by black people.
A target set by government is that by 2009 all mining companies were expected to have 40% of managerial positions held by previously disadvantaged South Africans. That has not worked, as the charter proved to be inefficient. It is disappointing to note that only 10% of the mining sector had been acquired for black citizens. This failure is very disappointing.
We now have reports that a new mining charter will be endorsed next month to increase black ownership. The question is: How will we ensure that the new charter does not fail where the previous agreement did? The willing-buyer, willing-seller scenario obviously does not work in any sector. Therefore, how will these goals be attained?
The statement by the Director-General of Mineral Resources that all South African mining companies must sell at least 26% of their assets to black investors by 2014 is very impressive, but we need to desist from setting unattainable targets without proper planning, just expecting the stakeholders to comply.
With these few points, the UCDP supports the budget. I thank you. [Applause.]
Mr V V MAGAGULA
Mrs M N MATLADI
Mr V V MAGAGULA: Chair, hon Minister, hon members and members of the department who are here, we, as the ANC, are happy with the budget allocation for Mineral Resources. We are happy that the department has identified community upliftment as one of its key priority areas over the medium-term. Pursuant to this, the department has identified small-scale mining as a prospective tool to uplift poor communities and develop a draft small-scale mining strategy intended for implementation in the current financial year.
We are convinced that this initiative will contribute to rural development, which is one of the five priorities identified by the President in his state of the nation address. We are, however, concerned about the current state of ownership in the mining sector.
The mining charter that was adopted in 2004 set a target of 15% for historically disadvantaged South African's participation in terms of ownership within five years. The charter also stipulates the plan for the development of the mining community as a prerequisite for the granting of a mining licence. We therefore urge government to ensure that the mining companies are adhering to the mining charter. [Interjections.]
Just wait! I'm coming, don't worry or I'll leave you. [Laughter.]
The TEMPORARY CHAIRPERSON (Mr T S Farisani): Hon members, it's the rule and practice in this Parliament that we listen to one another attentively. This applies to all, including him. Hon member, please continue.
Mr V V MAGAGULA: They are implementing their social and labour plans to ensure that what we set out to achieve, is indeed achieved.
We are of the view that the goal of ensuring that society as a whole benefits from the mineral wealth of the country cannot be left entirely to the private mining companies. We urge the state to explore the avenue of greater involvement in mining. We acknowledge that, if the state decides to get directly involved, it must subject itself to the laws that govern the sector.
The envisaged state-owned mining company has to consolidate all the interests of the state in mining, including Alexkor and the African Exploration Mining and Finance Corporation. Our suggestion is that an urgent audit on the ownership and conditions of service in the mining industry be conducted.
The Ministry of Mineral Resources must draft the legislation towards the establishment of a state-owned mining company. We advocate the establishment of a state-owned mining company as a matter of urgency, and that the company resort under the Department of Mineral Resources. Thank you. [Applause.]
The TEMPORARY CHAIRPERSON (Mr T S Farisani): Thank you, hon member. It is important to remember, once again, that we're a multilingual society and that English is not everybody's mother tongue. [Applause.] When we use some of these languages it's in order to help some us, who are linguistically limited, to understand. So, let us respect the way we speak these languages, especially those languages that are not our mother tongues. [Applause.] Thank you very much.
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Mr E J MARAIS
Mr V V MAGAGULA
Mr E J MARAIS: Mr Chairperson, hon Minister and hon members, the mining industry undoubtedly forms the foundation of South Africa's economy. In particular, it is an important net generator of foreign exchange and attracts a large foreign investment flow. Repeated calls from politicians and trade unions have recently been made for the government to take over ownership of the mines. While government has continually downplayed this demand, a public debate has erupted over the appropriateness of such a call.
The South African mining industry has declined overall over the past few years in spite of the global boom. It still remains the fifth biggest industry worldwide as measured by value added to GDP measuring US$21 billion. However, this is nine times smaller than the mining industry of China, six times smaller than that of the USA, a third of Australia's mining industry, and it lags behind Brazil. It is still larger than that of Canada, Russia, India and Chile. We are, therefore, a country with considerable mining abilities when compared to the international norm.
The mining industry has recently survived hardships on various fronts, which include difficulties in obtaining mining permits and rights, the effects of bad politics, a lack of skilled people, power cuts, procurement shortfalls and a lack of new projects. However, the sector is already experiencing an economic upswing. In spite of this, the mining industry's contribution to the GDP of the country shrank by 32% in the first quarter of 2009.
More than 50% of infrastructure spending is taking place in emerging markets. South Africa, as a developing country, can ill afford to lose its fair share of infrastructure investment owing to a mining policy not conducive to taking maximum advantage of this situation.
While mining accounts for approximately 7% of South Africa's GDP, our manufacturing industry is still heavily reliant on mining due to the mining industry it supports. It is still one of the country's biggest employers of semi-skilled and skilled employees, and a net generator of foreign exchange. The mining industry has been a major contributor to broad-based black economic empowerment, in short, BEE, amounting to approximately R150 billion in BEE deals, or 33% of the number of such deals done to date during the past 11 years. The need for BEE has been expressed by the Mineral and Petroleum Resources Development Act as "to substantially and meaningfully expand opportunities for historically disadvantaged persons".
Investors typically go where risk and reward are best aligned. If the risks outweigh the potential rewards, the country is going to struggle with investment. There is a real opportunity for Africa, but when it comes to the specific investment opportunity, people will still put it through a series of tests.
Where there is continual state ownership, with social services and employment benefits built in from the start, there may still be arguments supporting some or other form of nationalisation. In many instances, however, where national companies have been forced to privatise in terms of the World Bank's Structural Adjustment Programmes, the worst of both worlds has also been evident. In Zambia during the late nineties, the privatisation of Zambia Copper Consolidated Mines stripped workers of various rights and exempted the new owners from environmental regulations.
The commodity trading pacts of 30 years ago have given way to the rules of the World Trade Organisation. With the likely accession to various international regulations and general agreement on trade in services, calls for nationalisation appear to be merely symbolic gestures. Meanwhile, the power of communities to claim ownership over what lies beneath the land remains as strong as ever.
The Mineral and Petroleum Resources Development Act, MPRDA, Act 28 of 2002, which came into operation on 1 April 2004, effectively removed the ownership of mineral rights from its previous owners and vested them in the state on behalf of the nation. Such stripping of vested ownership and rights of holders has, inter alia, been referred to as the nationalisation of privately owned mining rights.
Various court cases are pending against government and notices have been served in terms of the Institution of Legal Proceedings Against Certain Organs of State Act, the so-called the ILPA Act. The government has at all times maintained that the MPRDA did not lead to the expropriation of mineral rights, when, in fact, it did, and previous owners and holders of mineral rights could not prove that they had suffered financial loss. However, the Northern Gauteng High Court has recently ruled that the loss of mineral rights could be classified as expropriation and that the owners of mineral rights had to be compensated in terms of the law dealing with expropriated assets.
The views of the former Governor of the Reserve Bank, Tito Mboweni, and of the chief executive officer of the Chamber of Mines opposing the nationalisation of mines are a matter of public record. In addition to the Deputy President and the Minister of Mineral Resources, no fewer than three ANC leaders have recently stated that the nationalisation of mines would not take place. Deputy President Motlanthe, Minister Susan Shabangu, Deputy Minister Derek Hanekom, ANC secretary-general Mantashe, and ANC treasurer Mathews Phosa have all publicly opposed calls for nationalisation. On the other hand, the ANC Youth League and various other individuals are on record as either supporting calls for debate on the nationalisation of mines, or, in fact, have publicly stated their support for the nationalisation of the mining production capacity.
Following a briefing by the Department of Minerals and Energy and the Chamber of Mines in respect of illegal mining activities during 2008, some of the members of the committee were of the view that all disused mines should be nationalised as a solution to illegal mining. The notion creates further impetus for the nationalisation of mines, as the disused mines are not economical to mine by big mining companies due to various factors. The most important of these are the major financial costs associated with continually mining deeper for resources and costs relating to the safety of employees.
The closure of mining activities, especially in communities which historically have been heavily dependent on mining for a living, has led to members of the community engaging in illegal mining.
The nationalisation of South African mines would cost R1,4 trillion to R2 trillion, or, to put it differently, would treble South Africa's national debt overnight. Nationalisation of the mining sector is, thus, quite clearly the delusion of those who are completely out of touch with reality. The mining industry represents approximately 33% to 35% of the market value of the Johannesburg Stock Exchange.
In conclusion, nationalisation is an unaffordable, untimely and frankly unnecessary suggestion which has already undermined market stability. I thank you. [Time expired.]
/Robyn/
END OF TAKE
Ms F C BIKANI
Mr E J MARAIS
Ms F C BIKANI: Chairperson, hon members of Parliament, the Minister, the director-general of the department and all guests present, it's true that it's easy to brainwash a willing person, like Dexter, as has been done by the DA. He has quickly forgotten that people who are current members of the DA were staunch members of the National Party government. They changed sports because they refused to part with the agenda of the preservation of white privilege.
It's an honour to see progress with our own, hon Dreyer. And, hon Marais, the ANC Youth League has moved on on the issue of mines and nationalisation. Please grow up. [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order!
Ms F C BIKANI: For a start, I immediately wish to give the highest recognition and honour to the true Congress of the People's 1955 Freedom Charter in today's Budget Vote 31, Mineral Resources, by quoting:
The national wealth of our country, the heritage of South Africans; shall be restored to the people;
The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole;
All other industry and trade shall be controlled to assist the wellbeing of the people;
All people shall have equal rights to trade where they choose to manufacture and to enter all trade crafts and professions.
With these words of wisdom, not only for admiration but implementation as well, in our national democratic revolution of the ANC, I wish to say that mining remains one of the important sectors in the economy of the country. In 2008, this sector accounted for about 8% of the gross domestic product directly, and for 18% of the indirect multiplier and induced effects included. It employed 296 000 employees, which is about 2,28% of the total working population in the last quarter of 2009. However, only 34 000, which is about 11,5% of persons employed in the mining sector during the afore-mentioned period were women. This is cause for concern, and the current situation can be traced back to the deliberate exclusion of women in mining in South Africa and even globally.
A final look at the transformation of women in the mining industry needs serious attention with specific reference to representation, beneficiation and needs. Moreover, challenges faced by women in incorporation, allocation and job opportunities, control and their biological make-up, portrayed to disadvantage them within the mining industry.
The International Labour Organisation's Underground Work (Women) Convention of 1935, prohibited employment of women in underground work with article 2 of the Convention stated that no female, whatever her age, will be employed to do underground work at any time.
However, article 3 provided for the exemption of females who had to enter the underground parts of a mine for the purpose of performing their nonmanual duties in the following categories: females holding positions of management and who do not perform manual work; females employed in health and welfare services; females in the course of their studies spending a period of training in the underground parts of a mine; and any other females who may occasionally have to enter the underground parts of a mine for the purpose of a nonmanual education.
In South Africa, the Minerals Act, Act 50 of 1991, also excluded women from working underground. This Act was repealed by the Mineral and Petroleum Resources Development Act of 2002. The MPRDA actually addresses the ownership aspect of discrimination in the mining industry. Section 12 of the MPRDA makes provision for facilitation of assistance by the Minister to historically disadvantaged persons to conduct prospecting or mining operations which, by the way, seem to portray their own challenges in this respect.
The Broad-Based Socioeconomic Empowerment Charter for the South African mining industry, better known as the mining charter, came into effect in 2004. The mining charter defines broad-based socioeconomic empowerment as redressing the results of past or present discrimination based on race, gender or other disability of historically disadvantaged persons in the minerals and petroleum industries as well as in the value chain of such industries.
The mining charter includes a scorecard which requires the mining companies to establish and implement plans to achieve the target for women participation in mining of 10% within five years. The five years expired in 2009, and very little progress is visible since the adoption of the charter.
Yes, there is acknowledgement that since the introduction of the mining charter there has been an increase of participation of women in mining, with some companies managing to achieve the 10% target set while many have not. In 2007, more that 12,5% of Anglo Coal's total workforce was women, and 6,7% of technical occupations were occupied by women.
Anglo American reported, as at the end of June 2007, that 13,34% of the company's total workforce was made up of women, some 7,23% of whom played technical roles within the organisation. The company employed 241 women at the coalface, 14 in coal processing, 22 in geology, and 53 in metallurgy.
Impala Platinum started the Women in Mining programme in 2004 as a response to the mining charter. Regardless of attempts by the company to achieve targets, it only had 5,8% women in its workforce by the end of May 2007.
I could go on with attempted achievements and progress, but we need to stop and start reviewing progress and the effectiveness of these processes to the advantage of our women. A constant thought is also how the statistics of women actually and significantly apply to black women in particular. The vibrations and powers embedded within the mining industries' employment and ownership opportunities are certainly not yet to the advantage of black South African women, not to mention the basic required employment equity targets that need to be met.
This is also then a reminder to the Minister to ensure finalisation of the beneficiation strategy in small-scale mining and present this to the portfolio committee by October 2010, that within the beneficiation strategy the possibilities should be explored of the state mining company being the majority shareholder in the beneficiation industry, and that government should establish a mineral industrial beneficiation zone.
Furthermore, the Minister should ensure that a 10% mining charter requirement is achieved by all companies within the required timeframes, and that the 10% requirement does not become new job reservation compliance, which is black women underground and white women in skilled jobs in offices.
Pregnancies can slow down women's career progression. Waist and back pains and severe menstrual pain are attributed to their jobs. Currently, because of high levels of radiation underground, women have to be removed within three months of their pregnancy. This then only allows them to be placed elsewhere in the working area until their maternity leave is applicable. The disadvantage currently is that their underground benefits are removed, meaning that the worry of an already cut salary further allows complications in the pregnancy, especially risking the life of the unborn baby whose rights appear not to be a priority at this stage of pregnancy. Further, the mother has to stress about a cut salary which is aggravated by psychological ill health due to the stress and anxiety of making ends meet.
There is absolutely nothing accommodative in terms of the labour laws and basic human rights of the pregnant woman in the mining industry, so whether in labour or not, she is suffering. Such a lot of reviews and possible amendments are being made within the Mine Health Safety Act as well as related mining laws. [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, hon members!
Ms F C BIKANI: I wonder what and how much effort is prioritised for the sake of women in this industry. It is time that basics should be dealt with by the Department of Mineral Resources to ensure that mining companies comply and meet basic needs for women by ensuring that pregnant women are not punished financially. Companies must pay their salaries with all benefits until formal maternity leave, irrespective of placement during pregnancy to avoid radiation. [Applause.] And there should be a supply of free sanitary towels in all mine clinics. Surely, it's not an impossible need, given the cost of antenatal clinic services, which are by far a good – and for many years have been – free-for-all.
Another form of discrimination is the fact that some men do not want to work with women. They see them as lazy and incapable of mining work. Women also do not produce as much as men, and, as a result, they get lower bonuses. Women are moved informally by men to teams that get fewer bonuses. Women are seen as less willing to take risks and as stifling the work process because they are always cautious. They do not want to work in a substandard way which sometimes impacts on the bonus received by the teams. Women do not have the option of staying in hostels. They have to commute between work and their villages early in the morning every day and transport themselves to work, which is partly a daily challenge. Women are more prone to heatstroke and have to work under humid and hot temperatures even when having their monthly periods. Lavatories are shared by both men and women and are unhygienic.
Need I then remind this House that the founding provisions in chapter 1(a) and 1(b) of the Constitution of South Africa states that:
The Republic of South Africa is one, sovereign, democratic state founded on the following values:
(a) Human dignity, the achievement of equality and the advancement of human rights and freedoms.
(b) Non-racialism and non-sexism.
The control we are mentioning here as women is definitely not power mongering for a position to head a household, but control and fairness in rights of women in an industry that refuses to realise the transformation for wealth earned in the industry.
It is time that the Department of Mineral Resources with the Minister give priority to a budget allocation that will advance the emancipation of women in mines. We greatly and significantly contribute to the economic development and success of not only this country but to Africa and, very much so, globally as well. To break down these barriers of poverty, women need full support and improved working conditions, better positions and clear ownership rights in mines, not to mention the simple basic needs I already deliberated on.
In 2009-10, the Mine Health and Safety Inspectorate continued developing the skills and knowledge base of its staff members to meet new challenges posed by the restructuring process. Fourteen staff members in the inspectorate attended nine managerial and administrative courses, and five technical courses. In 2008-09, the inspectorate embarked on addressing skills shortages and past imbalances in the mining sector, by training 23 engineering and occupational hygiene learner inspectors and permanently employing one learner inspector.
1n 2009-10, the inspectorate offered 11 bursaries totalling R1 million to students in mine surveying and engineering. But it appears that the mining industry continues to lose skilled labour to better companies within the industry, not to mention the poorly monitored employment equity targets within the field.
There is a great deal of inequality when it comes to availability of studies. No recognition is given to the aspiring development of black mine workers, and no efforts are visible to ensure that youngsters are drawn to the industry. Matters of studies and home oppression are still not in the same category. There in a very high failure rate of up to 100% in courses such as the mining management competency certificate. A high number of learners do not even end up sitting the exams. Most fail because of poor exposure. Once again, this is especially evident amongst black mining learners.
The Mining Qualifications Authority and the Mining Qualifications Framework yield no progress. The quality of training generally remains poor. On analysis of the material used, it might not necessarily be relevant to the needs. A mine health and safety summit in its action plan once suggested a school of excellence. This has not yet happened, suggesting then that a notion of this nature needs improved support from the department to ensure that there are measures taken to improve the present skills gap and stifling progress in the field.
None of the formerly so-called black universities has an engineering faculty in South Africa. The North West University in Mafikeng, for instance, does not have any specialised mining training.
The HOUSE CHAIRPERSON (Ms M N Oliphant): Hon member, your time has expired.
Ms F C BIKANI: In conclusion, I wish to show the Department of Mineral Services ...
The HOUSE CHAIRPERSON (Ms M N Oliphant): Hon member, your time has expired.
Ms F C BIKANI: ... that in their strategic plan for 2010 they have indicated that their aims are to promote and regulate ...
The HOUSE CHAIRPERSON (Ms M N Oliphant): Hon member, please take your seat.
Ms F C BIKANI: We, nevertheless, support the Budget Vote. Thank you, Chair. [Applause.]
/NB/
END OF TAKE
The MINISTER OF MINERAL RESOURCES
Ms F BIKANI
The MINISTER OF MINERAL RESOURCES: Elamadoda ngeke silibone Sogoni.[We will never have one that belongs to the men-folk only, hon Sogoni.]
Chairperson, I would to thank the members of the committee and thank you, Chairperson, for the leadership you have shown. [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Hon Minister, order please! No, there is no mystery. Some members have left some minutes unused and so the Minister has 13 minutes in which to respond. You may continue, hon Minister.
The MINISTER OF MINERAL RESOURCES: Thank you, Chairperson. I would like to thank the chair of the portfolio committee for the leadership he has shown, and also the members for supporting our budget. This is the first of its kind.
I know that it is not sufficient, hon members, but we also need to bear in mind we have just come out of a recession. The recession is not only out there; it is all over. It also had an impact on our budgets, hence we don't have enough. But, as people, I think we all know that there's never been enough in life. Even your individual salaries are never enough. I want to hear a person who says, now I am satisfied with my salary. You get an increase today, you think you are satisfied, next week it's no longer enough. Unfortunately, that's the law of nature.
I just want to deal with the issue of the conditions in the mining industry. I think it is an area we are looking into with the Department of Labour. It is very important for us, as we deal with issues of conditions of employment, that we understand the context in a broader way. I agree that issues of human rights are a critical matter, but those issues also reside with the Department of Labour.
If I had to deal with them, this House would come back and say: This Minister is a power monger; she wants more power for herself; she is taking on competencies which belong to other departments. So, we are working and bringing some of the issues to the attention of the Department of Labour.
I just want to say that there are people that are not entitled to do business in this country, and there are those who are or have automatic rights to do business. You know, whether individuals are ANC or DA, there are laws on how to do business in South Africa. And there is no stipulation anywhere in the Constitution of South Africa which says others are excluded.
But, I must also indicate that, when we get applications as a department, we don't look at your profile, where you come from, which party you support. There's nothing in the law which says we must look at that. The law clearly stipulates and says: these are the criteria we must apply to you, Mr Smith, to participate. The applications state that. I'm not looking to do business with someone's relative. It's not my business.
[Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, please!
The MINISTER OF MINERAL RESOURCES: I know, it used to be a privilege, but we agree, this is an open society. It is very interesting that, in the DA, while you talk about a free, open market, you talk about a free, open society, with discrimination. That is so unfair; that's not being realistic. We have to make sure ... [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, hon members!
The MINISTER OF MINERAL RESOURCES: We have to make sure it is the Constitution of this country. It is discriminatory to say: if you are a relative of the President of this country, you don't have the right to be involved in business. That's what you are saying, and it is very, very wrong because there is no law which says that that cannot happen. You on the other side of this House - how many of you ... [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, hon members!
The MINISTER OF MINERAL RESOURCES: How many of you have businesses? [Interjections.] All of you. I can't talk about you, wean. I can't talk to you about hon Mazibuko. I can't talk about you; you don't even understand the name of the game; you are lost, so I can't talk to you, you know. [Laughter.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, hon members!
Mr I M OLLIS: Excuse me, Madam Chair, would the Minister like to do a lifestyle audit on any of the DA members, because she is welcome to do so, if she wants to.
The MINISTER OF MINERAL RESOURCES: You had your chance; I'm not going to answer that. Let's have a debate outside. No, no, no you are eating into my time. You! You are now busy ridiculing Julius. You are worse than Julius! Yes, you are! You are worse! [Interjections.]
Hon members, on the issue of involvement of the state in mining: there's nothing amiss. There is nothing wrong. In any country there are parties where companies are involved in economic activities. What is key ... [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, please!
The MINISTER OF MINERAL RESOURCES: Listen! Listen! What governs that is the rule of law, the rules of the country. There are rules in this country which determines how to do business. [Interjections.]
The HOUSE CHAIRPERSON (Ms M N Oliphant): Order, hon members!
The MINISTER OF MINERAL RESOURCES: There's nothing wrong. Eskom is state-owned but is involved in business. There are many others. Alexkor is the same. It is doing so well. Don't be lopsided. Look at the total picture; don't be negative. [Interjections.]
You know, hon Dexter, you are negative. You are. You are terrible.
May I also say I agree with you, hon Dexter. I think I agree with you on the key issues you have raised. These are issues which are being addressed, but I must also indicate that beneficiation is not a lip service and it is not an event; it is a process. Because, at the end of the day, whatever strategy we come up with must be workable. I think the two of us know these are not events. If we make them events, they are going to collapse. Whatever we bring to this House must be sustainable and it must work. That's the intention of beneficiation. So it's not lip service; we are determined to make sure that we have a strategy which can make South Africa better and able to compete globally.
On the issue of competitiveness, the recent summit was precisely to address the issue and the repositioning of the mining sector within the global environment. We recognise that we have lost in many, many ways and we can't afford, with the current upswing, to lose another opportunity to make mining better within the global environment. That's what we are targeting. So I just want to assure you that that's where we are going and we are positive that we are going to get there. [Interjections.]
Well, I can't speak on behalf of unions, you know. We used to be unionists. If unions are weak, what can we do? Maybe the two of us must go back and make sure that we strengthen them again. [Laughter.]
I also want to touch on rehabilitation. We can't as a department say that we will be able to budget R30 billion as the government. This is government money, and there are many, many priorities in government. So, we have got to share this cake which comes from taxpayers' money. So we are positive that the R52 million we have is the beginning. It will take us somewhere.
I must also indicate, hon members, that derelict and abandoned and ownerless mines are a legacy of the past. The current laws are correcting that. In terms of what we are bearing today, all of us must make sure that we rehabilitate that land for usage, because what has happened is not of our own making, it is not of our own taking. So I just want to say: co-operate with us. We want to develop a plan for rehabilitation. As for those who managed to fill their tummy and left, unfortunately we can't find them. If we could, we would want them to take responsibility for the mess they have caused in this country.
I must also say, Mr Marais, that the policy of this country is clear, there is no confusion. Compliance is quite clear. How we issue permits is quite clear, Mr Schmidt. We are addressing the gaps but I don't have a magic wand that makes things happen magically; we have got to put in place processes which address some of the issues you have raised in the past, some of the issues which you continually bring to our attention, with the intention of bettering the situation.
We are not saying we currently have the best, but we are making efforts to achieve the best or better the environment within the mining environment. So we all want you to co-operate with us, and we hope the committee will be positive in making sure that your inputs are recognised, and that we are able to move together, because it is not for me. If the mining sector is good it's not for me; it's for all of us. It is for our benefit. It is for our future children. So we have a responsibility. It cannot be seen to be an issue of the ANC. It is an issue for all citizens of this country.
The last point which I want to touch on, hon Marais, is that we have not nationalised anything. What we have done with the mineral resources of this country is just make sure that they are in compliance with United Nations conventions. It is only South Africa which was an anomaly, where mineral rights used to be in private hands. Let me also say that one of the critical issues we faced when we came into government in 1994 was that the minerals of this country were stifled by a few people who had ownership. No new investment could come into the country. The new law – which states that mineral rights reside with the state – has opened up many opportunities. That is why, today, this industry is so dynamic. That is why everybody today knows about this industry, even if a person does not have an understanding of the mining sector. Today they understand what goes on here. So I just want to clarify that issue.
Nationalisation is a fact. It's indeed a fact. It's not government policy but we can talk about it. There's history to everything. Why should we want to reinvent certain things? If discussions happen, there's nothing wrong. If you go to America, nationalisation is being discussed. If you go to UK, you will find the issue there. But the key issue is how we respond and how we apply our minds in a way that makes sure that we are responsible and we are able to create a future for our country. So it is not that we must all jump because somebody has raised something out there. We can't do that. We must apply our minds. We must be dynamic. We must be scientific. We must learn from history. We must learn from what happened in other places. There is nothing new which is happening in South Africa. We have learnt from the past. We are a free-market economy. Thank you. [Applause.]
Debate concluded.
The HOUSE CHAIRPERSON (Ms M N Oliphant): Thank you, hon Minister. I want to remind members that at 16:30 there will be an EPC on Co-operative Governance and Traditional Affairs here in the Old Assembly, and there will be an EPC on International Relations and Co-operation in E249 at 16:30 as well.
The Committee rose at 16:15.
Nvs
END OF TAKE
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