Hansard: NA: Mini-Plenary (Debate on Vote 34 )
House: National Assembly
Date of Meeting: 16 May 2023
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Minutes
UNREVISED HANSARD
MINI PLENARY - NATIONAL ASSEMBLY TUESDAY, 16 MAY 2023
VOTE NO 34 – MINERAL RESOURCES AND ENERGY
PROCEEDINGS OF MINI - PLENARY SESSION OF THE NATIONAL ASSEMBLY
Watch: Mini-Plenary (Debate on Vote 34 )
Members of the mini-plenary session met at the National Assembly at 10:00.
The House Chairperson Mr C T Frolick took the Chair and requested members to observe a moment of silence for prayer or meditation.
APPROPRIATION BILL
Debate on Budget Vote No 34 – Mineral Resources and Energy:
The MINISTER OF MINERAL RESOURCES AND ENERGY: Hon House Chairperson, His Excellency President Cyril Ramaphosa in his absentia, Deputy President Paul Mashatile in his absentia, Deputy Ministers present here, hon Deputy Minister of Mineral Resources and Energy, DMRE, Dr Nobuhle Nkabane, hon members, Director-General of the DMRE, Mr Jacob Mbele and team DMRE, chairpersons and CEOs of our state-owned entities, captains of industry, ladies and gentlemen, over this Medium-Term Expenditure Framework of the current Administration, with 2023 being the last full year, a confluence of domestic and global factors impacted the performance of the mining and energy industries. Notwithstanding the headwinds, we remain steadfast in setting objectives that our department should meet to realise this government’s developmental agenda.
In our programme to ensure universal access to electricity for poor and indigent households, we aim to connect 917 000 households to the grid. Today, 673 946 households are connected to the grid. The remainder of 243 054 will be connected in this financial year. This achievement brings us evermore close to the United Nation’s Sustainable Development Goal 7.
I must emphasise that we have been given a number of advices in this regard. One of those is that we should not be connecting more people because there is a shortage of electricity. And our view is that connectivity and universal access to electricity is necessary. It cannot wait for the grid. We must deal with the grid problem, but connect our people.
In line with the reform of the electricity sector called for by the President, we have amended the Electricity Regulation Act to enable the creation of the transmission systems operator. The legislation is before this House. We appeal to members to speedily table it for discussion and conclusion. That is establishing transmission as a market and a wheeler of energy.
Coupled with the intention to create a competitive supply and demand electricity market, the ANC-led government has created a green economy. Through the Risk Mitigation Independent Power Producer Procurement Programme, RMIPPPP, and the Renewable Energy Independent Power Producer Procurement Programme, REIPPPP. We have procured a total 7 786 megawatts, through Bid Windows 4,5 and 6. A total of 2 130 megawatts, are connected to the grid. A total of 150 megawatts and 784 megawatts are envisaged to be operationalised in November 2023 and August 2024, respectively.
Notably, the single-most challenge we face to address the energy crisis is the grid unavailability. That is beginning to be the problem because you can increase the generation but if there is no grid capacity the impact is not the same. So we must pay attention to the grid capacity.
Notably, the single-most challenge we face to address the energy crisis is the grid unavailability. For instance, 3200 megawatts wind capacity of the 4200 megawatts procured under Bid Window 6, could not be allocated due to grid unavailability. As the IPP office notes.
Grid availability is critical to securing electricity supply in the future. It impacts not only on the public procurement programmes, but also on private embedded generation initiatives. We have removed the ceiling on embedded generation, but if there is no grid window the impact is going to be minimal.
In our efforts to narrow the electricity supply and demand gap, the Integrated Resource Plan, IRP, 2019, which is our blue print policy for electricity generation is currently under review. We intend to present the draft to the Cabinet in the second quarter of this financial year. Hon Mileham, I know we said March, but I am telling you now and upfront that it will be in the second quarter of this year. Because we are moving thoroughly, we are trying to bring a revised IRP and that is not a cut and paste.
Whilst this review is underway, we continue to procure additional electricity informed by the existing policy. Accordingly, in this financial year, we will procure the following additional generation capacity: Bid Windows 7 and 8 which will give us 5 000 megawatts each and that means a total
10 000 megawatts renewable energy. The requests for proposals for the procurement of this capacity will be issued to the market in the second and fourth quarter of this financial year respectively. Second quarter Bid Window 7 and fourth quarter Bid Window 8.
In the second quarter, of this financial year, we will issue further requests for proposals for the procurement of battery storage with a capacity totalling 1 230 megawatts. In the second quarter, we will issue a request for proposals for the procurement of gas-to-power totalling 3 000 megawatts. In the fourth quarter, we will also issue a request for proposals for the procurement of 2 500 megawatts of nuclear energy. We need all that energy to ensure that as we rollout our renewable energy, we also roll out base load energy.
House Chairperson, the mining industry contributes to the gross domestic product, GDP. Whilst production declined, the value of production registered R1,18 trillion in 2022, up from R1,1 trillion in 2021, on the back of strong global demand.
The sector created 23 552 jobs between June 2021 and December 2022, resulting in the overall employment of 472 088 workers. In other words, besides the headwinds, this industry has not declined but it has created more jobs.
I am making this point because when we reported a decline in the number of fatalities in this somebody intuited that it should be because there is a fewer worker in the industry.
There are no fewer workers in the industry. Workers in the industry are more by 23 522 and therefore, those facts don’t reconcile.
According to the South African Revenue Service, Sars, the mining sector contributed R89 billion in Corporate Income Tax in the 2021-22 financial year. A further contribution of mining to the country’s revenue through royalties stood at R28,45 billion in the same period, keeping its percentage contribution to the GDP at 7,53%. This is a clear indication that mining remains a strong pillar of our economy.
As highlighted in the latest Fraser Institute Survey that placed South Africa in the worst position in recent memory, mining would contribute even better to the economy if the binding constraints in electricity load shedding, rail, and port systems bottlenecks were urgently resolved. According to the survey, South Africa is in the bottom quartile on the investment attractiveness index. Our view is, we had issues last year and we have no issue now. Because we know that load shedding is a reality and we know that rail and port bottlenecks are a reality and therefore attractiveness is required to address those weaknesses.
One of the indexes highlighted in the Fraser Institute survey is the transparency of licensing systems. To this end, we have in collaboration with the State Information Technology Agency, Sita, initiated a procurement process for a licensing system with integrity. The bid adjudication process is underway and will be finalised by July 2023.
Okay. I have skipped something. Please help me, hon Mileham.
Mining and energy have also seen some tail winds with sizeable investments. To this end, the department is following on the implementation of 56 investment commitments which were pledged into mining and energy sectors, at the annual investment conference, amounting to a total of R397 billion. Among them are R16,5 billion of De Beers for Venetia Mine, R6 billion of Exxaro in Grootegeluk, R636 million of Impala Platinum at the Two Rivers operation and R175 million in the Steelpoortdrift Vanadium Project. These pledged investments reinforce our assertion that mining is a sunrise industry ready to bolster South Africa’s economy for years to come.
Despite the fact that people may raise issues in terms of the investment – we have been listening to the articulation of the United Stated of America, USA, Ambasador, we have listened to some investors in London, we have listened to the banking sector. All of them are trying to poor cold water on the investment environment in South Africa. We have a responsibility to ensure that we continue to withstand all the efforts to downgrade our investment.
On the energy sector, the lifting of the threshold on embedded generation has unleashed green shoots. For example, A Goldfields investment in 50 megawatts photovoltaic plant at their South Deep Mine with an investment of R715 million. This power plant can supply the mine and the potential excess power ready to be sold to the grid, thus creating a prosumer market which will help close the supply and demand gap. That talks to the reality despite the fact that in 2022 mining production declined by 9,9% and Goldfields registered an increase of 10%. It means supplementing your own energy supply and contributing to better production.
The Seriti-Green, R4 billion commitment of a 155-megawatts wind energy facility. This is a clear demonstration that our targeted interventions are beginning to deliver green shoots in addressing the electricity challenges that the country faces.
In 2022, we gazetted an exploration strategy which aims at ensuring that we attract at least 5% of global exploration spend by 2025. To give effect to this drive the implementation of this strategy, we have approached and negotiated with the Industrial Development Co-operation, IDC, on the establishment
of an exploration fund for junior miners, which is to be concluded by the end of June 2023. In its first phase, the fund will consist of a combined investment of R500 million from the DMRE and the IDC. That money is intended to help emerging miners to do exploration. It’s quiet an ... [Inaudible.] ... because we are gambling, you don’t know if there is a mineral.
The social licence to mine in communities is an important principle, also included in the Mining Charter. In this regard, mining houses working together with communities and municipalities, have contributed towards creating capabilities, which are part of the National Development Plan. NDP, by building health and education infrastructure. For example, Waterkloof Hills Primary and High Schools in the North West was donated by a mining company, JS Skenjana Secondary School in Idutywa Eastern Cape, Rockdale Community Health Center, Bokamoso Water and Sanitation project in the North West and the Rearata Primary School in the North West.
Those are few examples out of many. Social labour planning is beginning impactful project instead of delivering. We are beginning to see that. Last weekend we were handing over a social plan project of food production in Rustenburg. We will
continue doing so because mines must not be known to be leaving holes on the ground. Mines must begin to change the reputation of the mining industry in communities.
Health and safety continues to register incremental improvements of 49 fatalities recorded in 2022, were the lowest number on record. There is progress on reported occupational diseases, with a drop from 2 013 in 2020 to 1 924 cases in 2021. Now, more than ever, we must double our efforts to achieve our zero-harm goal.
We must consolidate gains made through the partnership with our social partners. Health and safety is an area where there can be no conflict or antagonistic relation between the employer and workers. Because it is about the lives of people.
House Chairperson, the demand for Liquefied Petroleum Gas, LPG, has doubled in the last 10-years and is poised to grow more. LPG can reduce demand for electricity during peak hours thereby minimize the severity of load shedding. We wish to encourage consumers to use this efficient source of energy for space heating and for cooking. It is quiet important.
In line with the country’s oceans economy agenda, we work hard to attract investments in the oil and gas sector and bringing communities on board to see the benefit from this for development. In 2022, we undertook consultations in seven kingdoms and in the Eastern, Western Cape and Northern Cape provinces. The consultations helped us appreciate real and prevailing sentiments about oil and gas developments. These sit in contrast to lobby groups, mostly foreign-funded.
I am emphasising this that many of the people who are running anti-development nongovernmental organisations, NGOs, are foreign funded and they block development in our country. For me, the problem isn’t either climate change or development, but both. You deal with development responsibly, but you don’t block development.
I was quite excited when I heard hon Lorimer taking an interest in the developments in Namibia. The only that he did not mention was that some of the companies that have made discoveries in Namibia were chased away from here. Because we want to be a small clean space in a world that is developing. Three discoveries of oil have been made in Namibia. They are looking for the fourth one. They have discovered three. And
they are actually drilling ten worlds of oil. That is progress. In our side where those deposits are stretching you can’t because we have given environmentalist veto power over the development. It is not right and it is something that we must look at and we must amend our legislation if need be.
Because we must pursue development.
The protracted litigations emanating here adversely impact South Africa’s economic development, for example, Eni South Africa B.V. which was doing exploration in KwaZulu-Natal, KZN, coastline have left us because they were taken to court seven times and they went to Côte d’Ivoire and discovered huge oil deposits. That is what happens.
As Richard Swedberg argues, in his articulation of the role of the law in the economic sociology of capitalism, and the development of growth in the markets and I quote:
Law is typically part of the political machinery. One reason for this is that law introduces an extra layer, between political decisions and their execution, the state can influence the economy through regulation.
That is what he writes. Therefore, ours cannot be a mere regulatory framework that reverses the gains of our hard-won liberty where, as described by Nee and I quote:
Under transformative change, the old rules and procedures frequently become, instead, sources of oppositional norms.
Following the tabling of the Upstream Petroleum Resources Development Bill in Parliament, Cabinet approved the merger of IGas, PetroSA, and the Strategic Fuel Fund, SFF, to form the South African National Petroleum Company, SANPC. The establishment of the South African National Petroleum Company will give effect to the provisions enshrined in the said Bill, for the state to participate meaningfully in oil and gas developments. To bring this Cabinet approval into effect, the final draft of the South African National Petroleum Company Bill has been submitted to the state law advisor for constitutional certification and will be gazetted for public comments in July this year. We implore members to ensure its finalisation before the end of term of this Administration. I can see that hon Mileham is agreeing in Japanese. He shaking his head.
The closure of crude oil refineries has presented a new set of challenges in our economy, with potential instability if not well-managed. Importation of petroleum products has reached unprecedented levels. And the robustness of the distribution infrastructure will be tested when the Sasolburg Refinery goes into a mandatory maintenance shutdown for four-months scheduled for later this month. To ameliorate the risk of product shortage in the market, contingency plans are in place and product imports have been lined up. We are also pleased that the Cape Town Refinery is back in full operation as this will narrow the supply and demand gap in the market.
To enable us to deliver on these commitments, the department’s budget for the 2023-24 financial year is R10,7 billion. You can notice that it is one the smallest budget in our budgets. Confirming an argument that I have consistently raised that we are not investing enough in revenue generating departments. We spend more money in social spending and it is an issue that we must review. Because these revenue generating departments must be supported and must receive sufficient funds. A large portion of this amount, about R8,5 billion, is earmarked for transfers to public entities, municipalities and other institutions or implementing agents. A large portion of the
funds under transfers will be disbursed to Eskom and various municipalities for the implementation of the Integrated National Electrification Programme, INEP. Which is connecting households to the grid.
Through this programme, households will continue to be electrified through connection to the grid. To this end, R6 billion is earmarked under INEP as follows: R3,8 billion for the INEP goes to Eskom grant and R2,2 billion goes to INEP Municipalities Grant.
In closing, I would like to thank the Deputy Minister for her central role in the work of our department and the members of this House for their continued guidance and support, particularly the Mineral Resources and Energy Portfolio Committee. I must say, Mr Sahlulelo Luzipo, that sometimes we go to the portfolio committee and we feel the pressure. But it is a necessary pressure that we have to feel. We like to go there because we learn and gain experience.
I would also like to express my gratitude to DMRE’s leaders, and the SOEs. I would also like to thank our partners for their continued co-operation and support. I would be making a
mistake if I did not thank my wife, Nolwandle, and my family, as well as my private office staff, for their continued support. In carrying out our mission, we have at times been tested from all sides. Regardless of personal, national and even international pressures, we have always been willing to stand firm and hold high the flag of our country’s development, guided by the progressive political perspective of governance centred on nothing but the people. Distinguished members, I submit Budget Vote 34 for your deliberation and eventual approval. Thank you.
Setswana:
Rre M J WOLMARANS: Motl Modulasetilo, ke rata go fetisa madume go Letona la Diminerale le Maatla, rre Mantashe, Motlatsatona, Mme Nkabane, Leloko logolo kgotsa Modulasetilo wa Komiti, Rre Luzipho, maloko a Kokwano ya Bosetšhaba ya rona le baagi ka kakaretso, madume. Modulasetilo, ANC e dumalana le go thekga Tekanyetsokabo 34, gonne Lefapha la Diminerale le Maatla le na le bokgoni jwa go laola ka manontlhotlho dikuno tsa dimenerale le maatla mo sedikeng se re leng mo go sona.
Dingwaga tse pedi tse di fetileng, Eskom e ntse e le mosetlhoeng sa dikgang ka mathata a a aparetseng naga le
setheong seo. Santlha, Eskom e fokoditse keelo ya motlakase ka mokgwa o o sa amogelesegeng mo setšhabeng, gape e amile le maemo a ekonomi thata ka fa batho ba tlhoka se ba ka iphidisang ka sone. Ntlha ya bobedi, Eskom e tlhatlhositse selekanyetso sa digriti tsa motlakase. Seo se bakile kelotlase ya letseno ka kakaretso.
Go nnile le poelomorago mo dikunong, sekai, dituelo kgotsa digriti tse di kwa godimo, di tseile lotseno lwa ba dikobodikhutshwane, mme fela, Eskom yone e a ungwelwa. Le fa e sa beeletse mo go tlhotlheng le go atolosa keelo ya mafaratlhatlha a motlakase mo nageng. Jaanong, Lefapha la Diminerale le Maatla le lemogile gore go na le bothata jo bo tlhokang go rarabololwa ka ponyo ya leitlho. Lefapha la Diminerale le Maatla le na le ditsitsinyo tse dilatelang.
English:
House Chairperson, just to illustrate, the recent amendment to Schedule 2 of the Electricity Regulation Act, the Electricity Pricing Policy and the Electricity Amendment Bill seek to create a competitive electricity market with open transmission access which allows the sale of electricity by Independent Power Producers, IPPs, direct to customers, municipalities and
Eskom whilst incentivising investment in the electricity market through cost reflective tariffs. Tabling these amendments to Parliament will therefore not only reduce the burden of Eskom but also improve the security of supply of electricity, broaden the basis of economic growth and increase the potential for additional green jobs in the country.
Evidence suggests that major private companies such as Shoprite, African Rainbow Minerals, Anglo American, Ford SA, Gold Fields, Kumba Iron Ore, SA Breweries, Heineken SA, Sibanye-Stillwater and Tiger Brands are already incentivised to respond to the planned amendments to provide reliable and affordable supply of electricity.
While the level of electricity generated by these companies is minimal to reduce the burden on Eskom, the Department of Mineral Resources and Energy, DMRE, nonetheless wishes to sufficiently create a competitive electricity market and tariffs quicker as it has seriously deployed its administrative resources to the task of working closely with the Department of Public Enterprises to advance the unbundling of Eskom into three separate divisions which seek to change Eskom’s monopoly position in generation and distribution
network which will eventually be good for the economy and customers.
Of course, opposition parties have a stance that argue that the unbundling of Eskom is a precursor to privatisation and inevitably that would push for the unbundling to be delayed or reversed. Within that the only thing the oppositions, more specifically the EFF, can delay might be the state of the nation like they normally do, rather than the unbundling of Eskom. The ANC-led government, through the DMRE and the Department of Public Enterprises, understands that the extreme consequences of load shedding and energy insecurity require that the ideological debate between state and private ownership be set aside and all mechanisms to address load shedding and energy insecurity must be mobilised.
Other opposition parties like the DA and the Freedom Front Plus support the unbundling of Eskom in the hope that the entry of IPPs would gradually erode Eskom’s market share, thus replacing state ownership with private ownership in the electricity market as both parties presume the private ownership of enterprises as all that is necessary for economic success.
The DMRE maintains the openness of the electricity market. Mounting evidence suggests that it is far from being a paragon of ... [Inaudible.] ... and instead amplifies the role of the state in the provision of electricity through Eskom. Take for example, the DMRE has rationalised African Exploration Mining and Finance Corporation, AEMFC, as well as supported the opening of expansions of Sasol and Seriti coalmines in Mpumalanga to secure the supply of coal to Eskom for the generation of electricity, given that the price of coal, which has increased by 40% between 2008 and 202, has also increased the cost of electricity generation and aggravated load shedding and energy insecurity.
Environmentalists argue that DMRE is pursuing growth first and clean up later through its support for coal which has higher risk for environmental cause than the more mature renewable energies. In short, they suggest that the DMRE is counterproductive from a just transition standpoint.
As expected, the DA also completely misses the point of just transition pushing the mythical narrative that DMRE’s support for coal is extremely detrimental to the green economy. In particular the innovation of clean coal technology spear
headed by the Council of Geoscience, CGS, under the portfolio of DMRE allows the coal industry to operate sustainably without damaging the environment, yet no matter how clean coal becomes it will remain dirtier compared to the renewables such as wind, solar, nuclear and gas.
There are opportunities in using clean coal technologies in the short to medium term such as retaining employment and competitiveness in the coal industry while the ANC-led government, through DMRE, devises greener strategies that would develop new industries and opportunities with similar economic and employment benefits, especially for communities dependant on coal for economic activities such as in Mpumalanga.
Although coal remains a critical input in energy generation and a source of survival for vulnerable stakeholders, the DMRE is currently using its planning capacity to incentivise investment in cleaner technologies such as gas and making it virtually possible for the country to transition to a green economy in the long run.
Through the Upstream Petroleum Resources Bill and Gas Amendment Bill, the DMRE has incentivised investments of at least $2 billion in first phase of the Brulpadda development in block 11B and 12B which is expected to produce three gas wells by the end of 2025. More importantly discovered gas wells present an opportunity to reduce increased electricity costs and insecurity for the mining sector which often results in uncompetitive extraction costs.
Reducing electricity costs for the mining sector is a catalyst to investment in the mining commodities discovered by CGS that are becoming increasingly critical in the face of the transition to green economy. It also increases investments in communities through the Social Labour Plans, SLPs, which lacked enforcement in the past. The DMRE has recognised the positive role that SLPs can play. An example is the handing over of two clinics at Rockdale and Kathyville in Middelburg and Barberton built by the Barberton mine and Seriti Resources as part of SLPs.
Going further, the DMRE has found it more appropriate to develop, in the mining and mineral sector, Women Empowerment and Gender Equality Strategy and an implement plan and the
Women Diggers Programme to reverse the growing trend of women underrepresentation which continues to plague the mining industries. Key successes of these initiatives are aimed at improving women participation at an entry level of small-scale mining’s financial and technical support. Thus, the DMRE is crowding in investment to support women representation in the mining industry through a funding partnership with the Industrial Development Corporation. For this mentioned above incentive and others not stated, the ANC wholeheartedly supports this Budget Vote 34. I thank you, House Chairperson.
Mr K J MILEHAM: Chairperson, by now even the most jaded Chairperson, By now, even the most jaded of ANC loyalists must agree that the energy crisis is crippling South Africa. What is worrying, however, is that for the Department of Mineral Resources and Energy and its entities, it is business as usual. There is no urgency, no drive to improve the situation. Quite frankly, it might as well be called the Department of No Energy. As for Minister Mantashe, well, perhaps we should let his accomplishments, or lack thereof, speak for him.
I have in my hand the Minister’s signed performance agreement. So, shall we see how he has done? His first responsibility, and I am only looking at energy, is to:
Contribute in development of a just transition framework and ensure transition to an energy mix as per the IRP 2019.
I think we can all agree that the Minister has been a stumbling block in this regard, and that progress has been slow to non-existent. IRP 2019 was based on poor assumptions and bad data, and the new IRP, Minister is behind schedule. And the just energy transition? Well, despite the $8,5 billion commitment in foreign funding, no one in this government, least of all Minister Mantashe can agree on how to spend it.
The next target is to:
Improve the energy availability factor to ensure constant supply of electricity.
That is at record low levels and load shedding now is at persistent Stage 6 with forecast predicted to be the worse in
the country in the months ahead. Although, to be fair, the Minister did open up the Risk Mitigation Independent Power Producers Procurement Programme, even if it was an unmitigated disaster in terms of implementation. But to date, none of those projects are generating any electricity, more than three years after the preferred bidders were announced.
What about the increase Eskom’s reserve margin to counter load shedding. How is that going Minister? Again, this has deteriorated rapidly under your control and Eskom’s operating reserves are barely keeping the lights on. Maybe explore embedded generation options to augment Eskom capacity. No, not much has been done in this regard. In fact, we should be doing everything we can to make it cheaper and easier to install embedded generation, including reducing import tariffs and local content requirements. Has Minister Mantashe had any such engagements with his counterparts at the Departments of Trade and Industry or Co-operative Governance and Traditional Affairs? It appears not. Has he broadened the section 34 determinations for municipal procurement? No. Or perhaps the separation and unbundling of Eskom to eliminate cross subsidisation and improve efficiency. Well, it turns out that is not going so well either.
The Electricity Regulation Amendment Bill, which is crucial to enabling this, still is not before the portfolio committee and it appears unlikely to be considered before Parliament rises for the 2024 elections. Of course, if the ANC had considered the DA’s Private Members Bill, which sought to do exactly this in 2019, the Minister might actually have achieved this target.
If you have been watching, you will know that we have run out of jet fuel at our airports on several occasions. But Minister Mantashe is responsible for security of supply and diversification of liquid fuels. There is no Energy Security Master Plan - Liquid Fuels. Our refining capacity is all but gone and our supply pipeline is weak and subject to destruction. These are just some of Minister Mantashe’s targets. The reality is, he is failing on just about every measure. When ordinary South Africans are suffering because of the cost of living, and when electricity and fuel prices are primary drivers of inflation, one would expect the Minister and Department of Energy to treat our energy crisis as an economic crisis. Sadly, that is not happening.
There is hope, however. Where the DA governs, more businesses are succeeding, more people are finding employment and the economy is growing faster than anywhere else in South Africa. This is because the DA has more than just a plan for dealing with our energy crisis. The DA get things done. [Time expired.]
Ms P MADOKWE: Hon Chairperson...
IsiXhosa:
... mandithathe eli thuba ndibulele kwaye ndibulise kumongameli wethu sonke...
English:
... the son of the soil and commander-in-chief of the EFF, President Julius Sello Malema. Greetings to commissars and ground forces of the economic emancipation movement and greetings to all the supporters of the EFF in South Africa, Africa and the world over. This year, 2023 marks 10 years since the formation of the EFF, the only weapon in the hands of our people, a thorn in the flesh of our colonisers and the only voice of the oppressed and the marginalised.
It has been 10 years of unbroken struggle alongside of the widows, children and dependents of our black brothers who were massacred in Marikana under the instruction of South Africa’s sitting President. Alongside mining communities across the country...
Mr B A RADEBE: Hon House Chairperson, on a point of order: I am rising on Rule 85, the member just enunciated that the President instructed the people to be massacred.
The HOUSE CHAIRPERSON (Mr C T Frolick): Yes, I heard that comment. Hon member, you must withdraw that comment.
Ms P MADOKWE: I withdraw it, Chairperson. Alongside mining communities across the country who have not seen any development or employment but instead are left with diseases, polluted water and air and the damaged environment. Alongside mineworkers we are still exploited and discarded and to this day we are fighting the same battle as the generation of Mambush fell fighting. In the same breath, we would like to extend our condolences to the families of the mining community activists who are to this day being killed for protecting
their communities from greedy mining companies and politicians.
It has been 10 years of unbroken struggle alongside black businesses who are being systematically closed out of participating in the petroleum industry, an example being Econ Oil, the only black-owned, female-owned petroleum company which was blacklisted from providing services to Eskom, allegedly under the instruction of Minister Jamnandas, while a Swiss company ABB Ltd. which confessed to economic crimes, continues to do business as usual in South Africa.
It has been 10 years of unbroken struggle alongside our people, who are losing homes, jobs, businesses, their lives, loved ones, even losing the ability to give their loved ones dignified funerals because of the consequences of load shedding. As we celebrate the 10-year anniversary of the people’s movement, we invite mineworkers, mining communities, and our people across the four corners of South Africa to come celebrate with us at FNB stadium on the 29th of July 2023.
We further call on all South Africans to donate to the only organization that is not funded by the Ruperts, the Oppenheimers, Rob Hersov, or our colonizers, primarily the USA
and the British. One can donate as little as R10 by texting “EFF DONATION” to 38172 as many times as they want, and details for those who would like to donate more are available on all our social media pages.
With that being said, House Chairperson, the EFF hereby registers that the Department of Mineral Resources and Energy is failing to uphold and fulfil its objectives and provides the necessary services to the citizens of South Africa, both the mining and energy sector.
We want to declare from the onset that we reject this budget vote. As we speak, South Africans are not at the behest to patriotically and proudly claim that the mineral resources of their motherland are benefiting them. This Department alongside the Minister of Police, is to this day failing to deal adequately with the challenge and economic loss posed by the Zama Zamas who are highly organised and continue to smuggle our minerals. They have instead used the issue of illegal mining to instigate xenophobia in this country, yet they know very well that the majority of kingpins and role players are South African and international syndicates. As the
days unfold and years go by, we hear less and less in terms of active steps taken to address this matter.
It leads us to conclude that politically connected individuals are beneficiaries of illegal mining. The mines of South Africa continue to serve as a hazardous risk to the workers and surrounding communities. The Jagersfontein Tailing Dam disaster serves as the most recent reminder of the potential negative impacts of unprotected mines in our communities. The EFF is the only political party that has been raising the issue of Jagersfontein at every given chance, with the ruling party always jumping in afterwards, pretending it will do something.
The Energy Sector is in shambles, and the three Ministers are more concerned about street cat-fights over the powers of Eskom and energy supply. The reality of the matter is that a total national power-grid collapse is looming, no matter the cheap political reassurances claiming measures to avoid that. Eskom has already proposed an energy plan to implement load shedding up to stage 16, meaning that South Africans may face power cuts of up to 32 hours.
The EFF has warned before, and we warn again that creating a million Ministries to oversee Eskom instead of assigning it to the Department of Mineral Resources and Energy is only...
IsiXhosa:
... ukusirhuqela eNdimangeni yabo ...
English:
...at the time when South Africa needs direction and the stable energy plan the most. The creation of these Ministries is illogical and shows that this country has given power to a confused bunch. We need to save the current crisis by speedily plugging in all Karpowerships. We cannot be held to ransom by those who are seeking bribes first, before doing so.
Labour in the only utility must be fully incorporated in saving Eskom as they have on numerous occasions outlined what the problems at are. We believe them because they also told us that six power stations were deliberately taken off the grid to ensure load shedding persists and those power stations miraculously started working when the EFF called for a national shutdown.
The EFF still insists on a build, operate and transfer model between IPPs and the state to ensure a state-led renewable energy industry when all is said and done. The state-owned mining company must be capacitated and play a role in supplying affordable and high-grade coal to Eskom. We must shout for help from our Brazil, Russia, India, China, South Africa, Brics partners, who serve as a model of brilliant energy supply.
This country’s petroleum energy has practically collapsed with n refineries and instead of entering with private, this department is altering legislation and bulldozing South Africans to allow the agenda of donating our newly found oil and gas to multinational corporations. We reject this budget that does not take into consideration the lives of ordinary South Africans and the transfer of our mineral wealth back to us. Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members. Hon Ntlangwini and hon Papo. Hon members, hon Ntlangwini and hon Papo, if you continue with this exchange I will ask both of you to leave the Chamber. Hon Ntlangwini and hon Papo, you are now disrupting the budget vote debate and there is now a
member from another political party on the podium. It is unacceptable what you are doing. You may now proceed Professor.
Prof C T MSIMANG: Hon House Chairperson, the purpose of this budget is to regulate the minerals and mining sector for transformation growth and development. However, the Minerals Council noted the disappointing performance of the mining sector’s contribution to the country’s gross domestic product, GDP, of about 7,5%. The council continued by noting the sector’s importance to the fiscus with its 30% contribution to the R75 billion corporate tax paid. This highlights the potential contribution of the mining sector that was lost due to constraints in electricity supply and transport logistics. Considering that matters related to electricity have been largely shifted to the Ministry of Electricity. We find it important to question how issues such as the impact of load shedding on the mining sector will be addressed.
There seems to be a great deal of overlapping functions between this department and that of the Ministry of Electricity. Consequently, we wonder whether the bloating of the Cabinet was necessary and how this will impact the budget
and ultimately the taxpayer in the long term. One way in which government can proactively make use of this of its resources is by supporting the public-private partnership of the country’s railway ... [Inaudible.] ... to avoid working in siloes which is the government’s current status quo. We echo these sentiments of the council in encouraging the speeding of Transnet Freight Rail and Infrastructure by October 2023, as it will provide the private sector with the platform to participate in the country’s rail network. Subsequently improving efficiencies and bolstering exports.
It is estimated that bulk commodity exporters for fitted revenue or R50 billion in 2022 when delivering of minerals by trains to ports where ... [Inaudible.] ... against targets.
These funds could have aided with the reduction of value-added tax, VAT, which in turn could have contributed to lowering the prices of retail products. We cannot merely accept the loss of R50 billion considering the economic state of our country.
Despite its unique mineral endowment the country has fallen short of translating these resources through their beneficiation into economically ... [Inaudible.] ... that create productive value and the employment.
The IFP is of the opinion that public-private partnerships will allow for greater beneficiation to local communities surrounding mining areas. In consideration of the commerce the IFP supports the Budget Vote. I thank you, hon House Chair.
Dr W J BOSHOFF: Hon House Chair, in looking at the budget for Minerals Resources and Energy, I want to start with minerals by noting that South Africa is regressing as a mining destination, where we are now at number 57 out of 62 preferred to destinations. The main reasons given for that are land claims, labour relations, organised crime, weak public services including Transnet and Eskom. Now, the transformative agenda one can say is idealistic in its approach and in its objective. One can argue whether it works and whether it is a pragmatic policy to follow. However, one should accept that there is a measure of trying to undo what has happened in the past. However, what about organised crime? What about weak government services? Those too are actually the results of government failure and there is nothing to be said about that. No positive angle to take to that problem. Therefore, if mining decreases, we also mentioned that 1% of the global exploration is done in South Africa at the moment. There is
pressure mounts to export unbeneficiated ore, in a need to get foreign currency fast.
Let’s leave minerals then and go over to energy. The hon Minister made a distinction or let’s say the vision between development and environmental affairs. Now, I think that there’s one thing that we should keep in mind and that is nonrenewable energy is those that are based on the burning of fossilised hydrocarbons. Gas is also a fossilised hydrocarbons unless it is hydrogen gas, which can be produced and which is therefore also renewable. The problem is, and that is actually not disputed that in previous eons the whole earth, the whole globe, was not a nice place to live because of the lot of carbon in the air - in the atmosphere.
That was progressively bound in biological processes, and that is a base of ... [Inaudible.] ... fossil fuels, and that anyone’s aim should be to burn as little as possible of that. Now, if coal and oil should exit soon or later, then it should be replaced at least by something which could be nuclear which does not emit any climate gases, and the safety problem seems to be somewhat solved, if one could put it that way. The one problem that has not been solved is the cost of it. Then we
have solar which is actually has a lot of transformative qualities to it in the sense that solar radiation is evenly not exactly evenly, but more evenly distributed than ... [Inaudible.] ... coal or oil over the globe and that the position of that or the ownership of that could be why or is actually why this spread between household, businesses, community organisations, and so forth, which makes it much more suitable for a transformative agenda as well as for any community-based kind of approach to development in South Africa and all over the world.
One could also look at hydrogen which is in sync with solar and with other technologies can be to the benefit of South Africa as platinum group of metals, which is very important in the production of hydrogen. It is also a South African acid which we can use. The fact is in the end that there are a lot of emerging technologies at the moment. New approaches to batteries, new approaches to energy and harvesting as one does not actually create energy or produce it. The question is whether the policy that the Department of Mineral Resources and Energy currently pursues is the correct policy. Therefore, I think for that there is a resounding no, because it does not work in the correct direction. I thank you.
Mr W M THRING: Hon House Chairperson, the ACDP notes that the Department of Mineral Resources and Energy is mandated to ensure transparent and efficient regulation of South Africa’s mineral resources and minerals industry and to ensure the secure and sustainable provision of energy in support of economic growth. Additionally, it has the medium-term priorities of regulating the petroleum sector; ensuring mine, health, safety and equity; rehabilitating mines and the environment, extending access to electricity; enhancing energy efficiency; and managing nuclear energy in accordance with international commitments.
Clearly, this department has failed in carrying out all of the aspects of its mandate and it has failed to implement its stated medium-term priorities. Chief of these failures has to be the failure to ensure, the secure and sustainable provision of energy in support of economic growth. The ACDP notes that access to electricity has been greatly extended, however, government has failed to keep up with demand due to poor planning, maladministration, nepotism, looting, theft, state capture, missing billions, and rampant corruption resulting in an inability to keep the lights on.
Hon House Chairperson, I have consistently said that an area where South Africa can increase its potential for economic growth, development and job creation is the beneficiation of its extracted minerals, where beneficiation transforms a mineral, or group of minerals, into a higher-value product, which can be consumed either locally or exported. Our country is rich in a variety of minerals which includes gold, diamonds, iron ore, platinum, manganese, chromium, copper, uranium, silver, beryllium, titanium, among others.
Sadly, the ruling party, over the last 29-30 years, has failed to implement the necessary structural reform, while perpetuating the legacy of our colonial past by continuing to be exporters of our raw materials and importers of valued- added products. This is corroborated by the fact that our level of beneficiation is negligible, when compared to the quantity of exported raw materials. It is time for change, and the ACDP stands ready to implement the required change which benefits our citizens, develops our economy, creates jobs, and gives back to ordinary South Africans the pride and dignity they deserve. Thank you.
The DEPUTY MINISTER OF MINERAL RESOURCES AND ENERGY: House
Chairperson, there will always be a crisis of unbalanced thinking when you have been an oppressor or a beneficiary of oppression. The right and left brain theory suggest that brain is divided into two hemispheres and each hemisphere is responsible for different cognitive functions, with the left hemisphere associated with lenient thinking and preference for objective facts while the right hemisphere is associated with nonlenient thinking and a preference for subjective experience and emotions. That’s why the DA is speaking like this because it is led by Steenhuisen. There is a need to learn something from this theory, the importance of balanced thinking. Learn to balance your thinking. I hope this theory is assisting you today.
It is true that we cannot build the new epoch without understanding the old, and I quote:
Hide nothing from the masses of our people; tell no lies; expose lies whenever they are told, mask no difficulties; mistakes, failures claim no easy victories
There has been systemic exploitation and exclusion through unequal distribution of political, economic and ideological power that has been so deeply embedded in our society since 1652. Unequal power structures played a central role during South Africa’s long colonial period from 1652 to 1910, and the trend continued during the period of segregation and apartheid from 1910 to 1994 when power was entirely monopolised by whites with devastating consequences for blacks. No other political organisation fought for this oppression, for white domination and democracy in this country except for the oldest liberation movement, the ANC.
Hon members, the transition from apartheid to an inclusive democracy did not occur without loss of blood. Eventually, when we assumed power in 1994, the inherited social injustices resulted in the democratic government inheriting a rather contradictory legacy with inherent major socioeconomic problems including high levels of unemployment, poverty, lack of opportunities and high levels of crime and violence. The ruling party is trying by all means to address the imbalances of the past.
Our manifesto stipulates that we aim to transform the economy to ensure that it serve the people as a whole. It is worth noting that the Mineral and Petroleum Resources Development Act, MPRDA, builds on the ideals of the Freedom Charter and henceforth the minerals beneath the soil are held in the custody of the state on behalf of the people as a whole, and not the minority.
Our laws including the framework of the Mining Charter seeks to achieve the historic goals of dismantling the barriers of socioeconomic development across the spectrum of race, gender and class. As the hon Minister of Mineral Resources has already indicated, transformation of the mining and energy sectors as well as growth and development will be central in this period hence the importance amongst others of the increasing mining through exploration. Indeed, it must concern all of us that exploration with the potential to resolve our energy security needs is continuously hampered by prolonged litigations from environmentalists who do not internalise the totality of the socioeconomic challenges we face as a country. The DA are part of those programmes.
I am going to reflect on the programmes linked to the state- owned enterprises. Over the past financial year, state-owned enterprises under the department received unqualified audit opinions. The Council for Geoscience, CGS, which is amongst the institutions pivotal in the implementation of our exploration strategy is seized with the process of geomapping of key minerals. The targeted mapping is progressing well and the onshore coverage has now reached 11,5% with further targets of 16% for the current financial year.
The research on carbon capture usage and storage that is conducted by the entity will make a huge contribution in the decarbonisation of our industries. The project was initiated as a partnership with the World Bank, and I am confident, Minister and the House, that our partners will continue to support the programme.
The nuclear energy policy directs that nuclear shall form part of the country’s strategy to mitigate climate change. This is because nuclear is recognised as a clean energy source that has baseload. Furthermore, nuclear has been demonstrated globally to be an energy source that contributes to economic growth and technology development through investment in
infrastructure, job creation and further development of highly skilled workers.
To advance the implementation of 2 500 megawatts of Nuclear New Build Programme, the department recently completed a procurement framework. This will ensure that the procurement of the 2 500 megawatts of nuclear energy is completed by the year 202. The department will continue to exercise oversight on the Eskom implementation of Koeberg Nuclear Power Station’s long-term operation to ensure security of energy supply for an additional 20 years. Worth noting is that Koeberg is the most reliable plant within the Eskom fleet and continues to stabilise the national electricity grid. Therefore, the country should continue to support Eskom’s implementation of Koeberg Nuclear Power Station’s long-term operation because its success is important for the energy security of the country.
The SA Nuclear Energy Corporation, Necsa, in collaboration with the department and other key stakeholders is implementing a multipurpose research reactor project that will replace our globally renowned Safari-1 nuclear research reactor by 2030.
Once the feasibility report is finalised it will enable the
Minerals and Petroleum Regulation, MPR, project to be shovel ready. The multipurpose reactor project will ensure that South Africa remains in the top range of radioisotope producers in the world well into the future. The ANC is advancing transformation and we are ensuring that there will be energy security in the country.
The National Radioactive Waste Disposal Institute, NRWDI, has started with project development for the establishment of the centralised interim storage facility for the storage of nuclear fuel. A draft feasibility report has been completed and is currently being subjected to an independent gateway review.
We have taken note of the global developments where the European Union has taken a positive stance on the inclusion of nuclear and gas in their green taxonomy. The United Kingdom and the United States of America also included nuclear in their green hydrogen strategies. As a country we should learn from these global players and include nuclear in our green taxonomy as well as green hydrogen strategies to enable investment in the nuclear space which will ensure that it plays a pivotal role in the country’s just energy transition.
The Central Energy Fund, CEF, group is central to some of its core initiatives in addressing some structural energy challenges through strategic partnership, acquisitions, infrastructure refurbishments and repurposing and the consolidation of asset classes to create a foundation for long-term commercial sustainability to improve the country’s strategic positioning in relation to security of energy supply. Key amongst these include the brown field acquisition which you said we are not doing anything, Acwa Red Stone
project, acquisition of 50% BP storage facility in the Western Cape, acquisition of 60% stake in an liquefied petroleum gas, LPG, import terminal, Coega liquefied natural gas, LNG, developments and Jet Fuel. As an operator, PetroSA will manage the Jet Fuel tank terminals and supply aviation fuels.
Mintek on the other side has trained a number of 200 women in open cast small scale mining and those women trainees were from the provinces of Limpopo, Northwest, Mpumalanga, Kwa-Zulu Natal, Free State and the Northern Cape. “Siyaqhuba” [We are forging ahead] with the transformation and the sector.
On derelict and ownerless mines, during the year under review a total of 95 hollings were closed in Gauteng with 65 of these hollings were in the Krugersdorp area.
Again, in terms of asbestos two mines were rehabilitated in the year under review which were Lagerdraai Mine and Riries Mine in Northern Cape.
On commercialisation, during the year under review, Mintek produced HIV test kits which have passed the validation test by 100%. The clinical trials were completed in March 2023.
In terms of empowerment, the empowerment of those previously disadvantaged remains important part of the minerals and energy sectors. In order to address the imbalances of the past and stepping further in effecting transformation agenda, we will also work towards approving and launching a draft mining sector youth strategy, the youth in energy strategy and the mining sector women empowerment and gender equality strategy. We will also monitor the implementation of the energy sector empowerment and gender equality strategy plan. [Time expired.]
Mr V ZUNGULA: Thank you Chair. Minister, there must be a deliberate effort to retain the value of the mineral wealth within our shores. We can’t keep saying that we are rich in mineral resources yet the people of the country continue to languish in poverty and unemployment. A global banking giant, CT in 2010, valued South Africa’s mineral resources in the ground at US$2,5 trillion. The country can learn from India where there is a deliberate beneficiation of its mineral resources at competitive prices to create sustainable jobs and industrialise the economy. We have the best grades of iron ore, yet we are the net importers of ... [Inaudible.] ... steel products.
We export most of our iron ore to China and India and then buy the finished products at high prices from these countries. The iron ore and other minerals in our country should be beneficiated and we should be the world leader in supplying steel. The steel used to build infrastructure projects in the continent and in other parts of the world should be supplied by us.
Coal is to South Africa what oil is to countries in the Middle East. We must double the extraction to boost our economy with
technological advancements, coal now can be used with zero emissions and South Africa has got over 200 years of coal reserves that could be extracted to boost our economy. There must be a systematic integration of minerals industry contribution into manufacturing objectives centred on local production and sourcing of local coals.
On community participation and benefits, the department must hold the mining houses to account for social labour plans to ensure the commitment to the development of the communities are actually done in the interest of sustainable growth not just compliance. On the energy front, our relationship with the world does us no good as we are dictated by major polluters as if we are the worst in that context. When our global contribution of greenhouse gasses emission such as carbon dioxide is a measly 0,4%.
We can’t seek to please world leaders in pollution, Minister, at the expense of dragging our country into darkness. ...
[Inaudible.] ... must procure a 30-day emergency full stock to avert the disaster when the electricity grid collapses. In order to have a reliable energy system, a heavy investment in servicing and maintaining of power stations is required.
Managers with a proven track record of turning around power stations must be deployed to poor performing power stations.
Given the crisis we are in, Eskom, in consultation with the relevant departments, must do everything possible to extend the decommissioning schedule of the power stations that are due for decommissioning until we are out of this crisis.
Lastly, Minister, the root causes of the problems that we have is a lack of political will. All of these proposals are meaningless if the ... [Time expired.] Thank you.
Ms S J GRAHAM: Chairperson, typically, budget speeches serves as an occasion to discuss the allocation of billions of rands on the provision of services to our citizens for the upcoming fiscal year. For ordinary South Africans though, most of what is said is incomprehensible and meaningless. Perhaps, in addressing the budget for the Department of Mineral Resources and Energy, we should look at some numbers that do mean something to our residents.
The number of load shedding hours in 2022 were three times more than that of the previous five years. We have already experienced 2 896 of load shedding in the 5th quarter of 2023,
almost 80% the number of hours for the whole of 2022. And of those, 548 hours have been in stage 6 – this is only a 166 hours last year. For those who can afford alternatives sources of energy such as generators, inverters and solar panels, are available for heating, cooking and lighting. But the nearly 3,6 million indigent households across our country, when the blackouts come, they are plunged into darkness and unable to withstand the frigid winter temperatures. And the impacts of load shedding would further condemn them to a life of poverty as the opportunities for finding employment diminish with each day.
Minister of Electricity, Dr Ramokgopa, told Parliament last week that it is estimated that we have already lost 650 jobs due to load shedding, and that all indications are that we stand to lose in excess of 850 000 if load shedding continues unabated. Clearly, Minister Mantashe, your approach to date has not worked, and it definitely doesn’t help for you to double down on your efforts while stubbornly hanging on to Cold War ideologies or ... [Interjections.] ... policies and outdated technologies. Your government lackadaisical attitude to the energy crisis is underscored by the fact that the new
integrated resource plan essentially an electricity capacity blueprint is already two years overdue.
By contrast, the DA-run Western Cape government has urgently innovated to address both current and future energy needs. As an example, the [province has set aside R7 billion to mitigate the electricity crisis through its energy resilience programme. The programme is aimed at primarily at supporting local government to develop and sustain renewable energy infrastructure to ensure that participating municipalities continue to provide services during load shedding as well as to promote economic growth.
Load shedding is not just an electricity crisis, it is an unfolding humanitarian crisis, and this callous ANC government has yet to provide any real solutions aside from a new set of protocols for stage 9 load shedding and beyond. Winter is upon us, and people face unrelenting darkness and bone chilling cold. The only glimmer of hope for the country is a DA government taking office in 2024. I thank you.
Ms N P TYOBEKA-MAKEKE: House Chairperson, in my maiden speech, I would like to draw your attention on the following.
Chairperson, just like many challenges we have faced as the nation, the prevailing situation is not unsurmountable.
Several efforts are being made, to find a lasting solution, build the required energy availability sector, and comply with international commitments for Just Energy Transition, JET.
Chairperson, while the opposition parties have been using this debate to campaign, and attempt to feed the public a clapped trap notion, that the Department of Mineral Resources and Energy has followed incorrect, inconsistent, unpredictable and inefficient policies and regulatory framework in the past, the ANC’s stance is that, the Department of Mineral Resources and Energy is not destructive to implementing steps towards green transformation in the energy sector, and to shifting this electricity market towards renewable energies.
Therefore, we support Budget Vote 34. Yet, in believing this, the ANC’s intention is not to defend the Department of Mineral Resources and Energy, where its policies and regulatory framework proved to have produced undesired outcomes or vilified the Department of Mineral Resources and Energy where its policies and regulatory framework proved to be most successful. Chairperson, the Minister of the Department of
Mineral Resources and Energy, hon Mantashe, has been labelled a coal fundamentalist and a coal dinosaur by lobbyists, for supposedly derailing the country to private renewable energies.
In other words, the Minister of the Department of Mineral Resources and Energy has successfully locked in South Africa’s energy sector in a path that is dependent on forces fuel, as sources of energy generation and the corresponding greenhouse gas emissions in the past five years. However, axiomatic evidence proves otherwise. Ever since hon Mantashe took over as the Minister, the Department of Mineral Resources and Energy has resolved delays in licensing and contracting with the Independent Power Producers, IPPs.
In turn, it has introduced the renewable energies to the energy mix through the Risk Mitigation Independent Power Producer Programme, RMIPPP, and the Renewable Energy Independent Power Producer Programme which is currently at its Sixth Bid Window. More importantly, most of the preferred bidders in Bid Windows 5 and 6, as well as the RMIPPP, have reached the legal, financial and commercial close, thereby
suggesting that they would connect to the Eskom grid between 2023 and 2025.
Although the procured renewable energies would never change the socially and economically disruptive effects of load shedding or rolling black outs within a short of time, the risks of not procuring any renewable energy at all, could be much worse to the economy and people, as Eskom supplies the base load of power in the country. Simply put, delaying procurement of renewable energies implies cost that are undoubtedly higher in the need to long run such as climate change and environmental damage.
Thus, the Department of Mineral Resources and Energy has demonstrated a much greater ability to support the transition to a green economy and proxy such as the renewable energy Bids can be used to measure such seriousness. Other efforts in support of transition to a green economy by the Department of Mineral Resources and Energy, include the Koeberg nuclear power plant long-term operation, and the procurement of
2 500MW from nuclear energy and developing gas power. More specially, I hope that investments towards nuclear energy does not irritate hon Mileham, who has been acting as the opium of
masses that discourages South Africans from nuclear based on false assumptions that, it is a fossil fuel.
The European Union, EU, and the other developed countries treat it as green energy. Chairperson, what is important to recognise is that, the Department of Mineral Resources and Energy polices and regulatory framework which supports green transformation, have not only induced innovations in wind and solar energy technologies, but also in smart grids. In particular, several municipalities such as the City of Tshwane, where I come from, the City of Johannesburg and the City of Nelson Mandela Bay, are currently implementing the roll-out of smart meters, and smart metering systems to improve amongst other things, grid reliability, revenue management and energy efficiency.
Thanks to the work of the SA National Energy Development Institute, SANEDI, under the Portfolio of the Department of Mineral Resources and Energy. The innovation in smart metering, has been recognised by Eskom as ground breaking as the national utility plants to roll out smart meters across South African households in a 16 billion demand cite management initiative to relieve pressure on the grid, by
reducing load during pick times by 7000MW. This leading to consumer costs, saving managing demand, whilst increasing supply.
Another important innovation, is the introduction of containerised micro grids used by Eskom as a sustainable solution to supply green energy to rural and remote areas to improve reliability of the supply of electricity. In Wilhelmina Farm located in Ficksburg, in the Free State, Eskom microgrid, already supply electricity to close to 14 households, with 81 family members that comprise in that community. Pedantic opposition parties with the anti-ANC stances, have obviously ridiculed Eskom microgrid connections in Ficksburg as a drop in the ocean, considering that almost 30% of the country is not yet electrified.
While Eskom microgrid connections may be marginal progress, the Department of Mineral Resources and Energy has successfully reduced the number of unelectrified households through grid connections. Just to illustrate, the Department of Mineral Resources and Energy has managed to connect 500 418 households to a national grid between April 2019 and 2022.
Such cases that counts for success are ignored intentionally
by the opposition parties, in favour of cases that accounts for challenges such as the national solar water heater programme.
To date, the solar water geyser programme has not yet achieved its goal in ensuring that, vulnerable households at least, are not negatively impacted by electricity shortages, and spiralling electricity tariffs. Like every programme, it has brought risks and opportunities. Whereas, the halting of this programme undermines green gas emissions reduction, and green economy targets of the government. It has accelerated industrialisation objectives, the government at 70% of solar water geyser have been produced by local manufacturers such as I Solar factory in Atlantis, where the DA governs, but cannot nature industrialisation through provincial programmes.
Of course, the low implementation of the solar water geyser programme has resulted in local manufacturers becoming increasingly competitive, as the new solar geyser purchases has slowed down, which contributes to rising costs job cuts. However, local manufacturing such as solar factory can move into opportunities with the new renewable energy industry such as the solar home system. In conclusion, it is important
throughout that breakthrough made by the Department of Mineral Resources and Energy in the energy sector must be harnessed as the achievement of the Just Energy Transition, and that energy security depends on them.
As Parliament, we need to continue to monitor the implementation of the Integrated Resource Plan, and assist the Department of Mineral Resources and Energy to continue to build the energy availability sector. We are encouraged by the multiple initiatives that have been implemented. [Interjections.] [Time expired.]
Mr S M JAFTA: Hon Chair, the Department of Mineral Resources and Energy take its cue from the White Paper on Mineral and
... [Inaudible.] ... policy. This policy was conceived in 1998. It recognises the South African mining industry as the cornerstone of our economy. Contemporary, legislative ... [Inaudible.] ... framework such as the National development Plan, NDP, Integrated Resource Plan, IRP, and the Just Energy Transition plan, also informs policy direction and the operational requirement of the Department of Mineral Resources and Energy.
Therefore, this budget must speak to the plans and policies, and how the ordinary men and women on the street will benefit from this allocation. Hon Chair, it is common cause that the department’s main responsibility is to guarantee reliable energy supply. This has been most glaring component of the department. On this call, the department has delivered us unreliable, costly and unsecured energy supply. It cannot be then said that, energy insecurity is the main driver of this investment.
The introduction of the Gas Amendment Bill, was thought at as a main driver to unlocking investment in the gas sector, including creating investment potential in the gas industry and subsectors. Yet, we know that our energy insecurity is a recipe for capital cite. Hon Chair, we know that ideologically bickering in the ANC, mostly about renewables, has led to conflicting messages. Hon minister Gwede Mantashe knows that very clearly.
The department’s entities are as poorly managed as the department itself. Eskom, National Energy Regulator, Nersa, Mintek, the Petroleum Agency SA, and the National Nuclear Regulator, NNR, have progressively failed. The less said about
Eskom, the better. Mintek has been passed with the responsibility to decommission old and drainage mines, at huge cost to the fiscus. Despite this, old mines remain unrehabilitated, and the Zama-zamas are having a field day feeling at the freight.
The Nersa has lost its independency, and it is failing to decommission the nuclear waste. Hon Chair, we are moving against the time. We can no longer speak in tongues about the urgency of bringing an additional capacity to the national grid. The request to procure 2 500 megawatts nuclear power must be fast tracked. I support, as the AIC, hon Mantashe, the budget for ... [Interjections.] Thank you very much. [Time expired.]
Mr M NYHONTSO: House Chairperson ...
IsiXhosa:
... ungabinexhala Qabane Luzipho, andiphethanga sabhokhwe ...
English:
... this is my committee. We regard the energy crisis that is talked about in all corners of the nation as the crisis for
land restoration. The energy resource is primarily linked to the rich abundance of resources in our beautiful land is blessed with gas, coal, water and even renewable energy is all based on land. The PAC approach is all-encompassing. Our understanding is that if the restoration of land to the African people is prioritised, the energy crisis will be under control and limited to a small scale. Public services linked to the people must not be privatised and made a sole preserve of the elites and super-rich. We support universal access to electricity, water and other essential needs so that ordinary people can live a quality of life and standard of living that their land is blessed with. By so saying, comrade Minister, the PAC supports this budget.
Mr J R B LORIMER: Madam Chair, South Africa’s mining industry
... [Interjections.] ...
The CHAIRPERSON (Ms R M M Lesoma): Hon member, before you proceed, next time as well equally, you must sit on a seat where you are supposed to so that you go to the podium, it will be much appreciated. You may proceed.
Mr J R B LORIMER: ... built our country into one of the foremost economies of the world. We are a member of the G20. For a long time, we were the biggest economy in Africa but mining has fallen on hard times. Yes, people can still make money running mines and yes hundreds of thousands of South Africans make a living, and a higher-than-average wage from mining, but given the promise of our mineral endowment, we should have done better. We missed the resources boom of 2007, and the boom just past did not spark the take-off of our industry as it should have, although it did rescue government finances. The promise of explosive growth that should follow from our fabulous mineral wealth has never been realised. The government’s attempts to spread the wealth were wrongly done by trying to micromanage the industry rather than by setting it free. South Africa has slipped further and further down in the perceptions of potential investors who could see the government crippled by its socialist ideology and who saw them only as an enemy or a cash cow, rather than a partner in development. Now too many in the industry are battered, disheartened and unwilling to take risks and are focused on harvesting rather than building.
There are fewer and fewer big capital investment mines, and more short-term, get-rich-quick schemes. Mines that should be built to last 20 years are being raided and finished in five, but our mining industry is not over. It just needs a new vision. South Africa’s mining industry needs a new deal. That deal should be motivated by the goal of using our mineral endowment to grow the economy, power intergenerational wealth creation among as many of our people as possible, and pull our people out of poverty. We need to empower entrepreneurs and investors rather than insiders and cronies. We need to get the government out of the way. Micromanagement has not worked. We need to say to investors that they can make money if they put their money here. At the same time as they make money, they will create poverty-busting jobs and ensure a flow of tax revenues so we can afford the social goods and services that we need. If we resent investors and we chase them away, if we curb them, they will go where they are not curbed and we will continue to live in poverty. We may live on top of diamonds but when we can’t dig them out we will live in shacks.
The industry needs to grow. We need more mining, not less. We need mining that focuses on the long life of mines rather than cherry-picking and sterilising because mines expect their
investments will be snatched from them by a rapacious state. We need mining that leaves as light and a temporary footprint as possible so that when it is gone and the wealth realised, it does not leave decay, spoiled soil and poisoned water. We need to understand that mining can rescue our economy if we only let it.
A new deal needs transparent cadastral, rights and licensing systems; No racial set-asides in licensing, ownership or employment; Recognition of the rights of and proper compensation for landowners and occupiers; Rapid, efficient and honest licensing and permitting; No localisation requirements; Proper policing to ensure the free exercise of mineral rights and the protection of national assets reigns. The government needs to get out of the way. Five years ago, the Minerals Council estimated that by ensuring best practices in legislation and regulation, South Africa could create an additional 50 000 direct mining jobs and 200 000 indirect jobs. It’s been calculated that each direct mining job supports ten people. That means a million South Africans are out of poverty by getting it right. Today I believe that’s an underestimate. In the alluvial diamond sector alone, we could easily claw back the 20 000 jobs that were lost because of the
Mineral and Petroleum Resources Development Act’s regulatory and transformation requirements.
If we think the mining industry is a tool to right the wrongs of the past or we think by a thicket of law and regulation we can create a huge class of super-wealthy people by socially engineering society, then we will betray the promise of our mineral endowment. Twenty years ago, it may have been possible to argue that racial set-asides in licensing, ownership and employment were justified by the racial set-asides of apartheid. Anybody making that argument today would have to believe investment disincentives, the friction of a business- crushing state bureaucracy, and the door to corruption that is opened by social engineering are worth it because black enterprise and expertise simply cannot compete on a level playing field. That’s nonsense. That belief disregards and disrespects the proven expertise and efficiency of black people in mining. Instead, it accepts the perpetuation of a system of cronyism that ensures who you know and who your connections are is allowed to trump the need to extract value for entrepreneurs, employees and state revenues. So, tell the departmental staff that they’re expected to be honest and do their jobs. Everybody will be expected to prove they were
employed because of their knowledge and diligence, and not because of who they are, who they know, or what they know about the misdeeds of their superiors. Ensure that the results of disciplinary hearings and investigations will be swift and public; End the messing around with a new cadastral system.
For years, officials and politicians have been wriggling and twisting to avoid revealing exactly what rights have been granted to whom. Set a deadline. A new, transparent cadastral system could be in place within six months. Cancel the Mining Charter. You could draw a line through it in the afternoon.
Better protect landowners and residents and keep a careful eye on who may be losers from mining activity. Separate those who are angry at being hurt by a mine from those who are angry at not being made rich by it. I make these suggestions knowing that the ANC won’t accept them - you may call it steadfast, we call it an inability to learn – it has proven itself a slave to its ideology, impervious to evidence, experience and good sense but everybody else knows, give mining a new deal and it could strike a mighty blow against poverty.
Mr M G MAHLAULE: Hon House Chairperson, it is self-evident that opposition parties use the high stages of load shedding
as a main source of their legitimacy in Parliament, instead of their own programmes. What is notable from opposition parties is the absence of a solution-orientated approach to resolve load shedding and energy insecurity in the country.
Whereas opposition parties are pessimistic that the DMRE is inadequate to the task of addressing load shedding, the ANC is less cynical because we are convinced that, if the DMRE is inadequate to its task, it is definitely not because they are not trying.
Minister, maybe, our Parliament must just deal with a very funny concept in the DA of scheduled Ministers. It has the potential of giving people funny ideas that they can be Ministers and it will remain that – just a funny idea. That is why, hon Mileham started his speech with hon Mantashe and finished it with hon Mantashe, without anything in between. He said nothing at all. For instance, the department has initiated the procurement of 9 303 mega parts of additional power from different sources such as renewable energy, gas, coal, and nuclear through various bid windows and programmes.
The undeniable competence and administrative capacity of DMRE will be deployed to fast-track the procurement of this additional power generation in the 2023-24 financial year.
While the potential benefits of this additional power will be more easily reaped, since Eskom has appointed contractors for the provision of battery storage solution in terms of its flagship battery energy storage programme, as part of the ANC- led government’s effort to minimize the intermittent nature of renewable energy, coal will not be clammed down, as the competitive of renewable energy is not yet sufficient to provide us with baseload energy, hon Mileham.
Renewable energy will increase generation and therefore supply, but lack the economies of scale to produce baseload supply.
Of course, the DA and its lobbying partners of neoliberal attitude argue that the continued use of coal as a source of energy maintains the status quo rather than accelerating a just energy transition. On the contrary, the department does not effectively reject the jut energy transition, rather the current electricity crisis leaves the department with less time for experimenting with renewable energy and incrementally
scaling up their procurement, as they take approximately 18 months before they start supplying energy to the grid. And of course, hon Mileham knows this.
Clamping down on coal in favour of renewable energy sounds like an immature solution that the DA is proposing all the time. Of course, the use of coal would be promoted in a sustainable way that strikes a balance between economic development and environmental concerns. Therefore, carbon pricing implementation in the form of the Carbon Tax Act would be part of this strategy to ensure that firms and consumers take the negative adverse externalities of coal into account in the future production, consumption and investment decisions.
More importantly, the technical implementation of the Carbon Tax Act in easier, since the ANC-led government already has one of the most lauded tax systems in the world, thanks to Sars.
The department has recognised that the backlog of mining licences is a major problem that must be addressed, as it contributes to the mining sector’s poor performance, which has
adverse implications for economic growth and inclusive development, especially in vulnerable communities, such as Mpumalanga, North West and the Northern Cape.
Against the backdrop of concerns around the backlog of mining licences, the department is in the process of procuring a new mining licencing system, with the implementation of the system starting in the 2023-24 financial year, hon Lorimer. Procuring a new mining licence system could play an important role in reversing a dramatic decline of South Africa’s mining sector ranking in Fraser Institute ranking.
In fact, the DA ... [Inaudible.] ... the mining sector’s downward, rather than stabilising or improving performance in the Fraser Institute ranking to the DMRE. This, according to the DA, has become a dread around the otherwise efficient mining sector through inefficient policy such as black economic empowerment and industrialisation through localisation, as outline in the Economic Reconstruction and Recovery Plan.
It is short-sighted for the DA to link the mining sector’s poor performance in the Fraser Institute’s ranking solely to
the department, especially given the most of the poor performance in the sector can be linked to recalcitrant giant mining houses that circumvent or marginalise the key interventions of the department, aimed at spearheading structural transformation and progressive distribution of mineral benefits in the mining sector. That is what you were saying here, hon Lorimer. You think this must be reversed because it benefits black people and therefore anything that has a black person is linked to corruption. It is very wrong.
For example, the Gauteng High Court ruling that set aside some of the BEE provisions in the mining Charter has weakened the ability of the department to intervene in the structural transformation of the sector itself. Of course, the DA supports the ruling of the Gauteng High Court, because the party, called the DA is a lobbying vehicle used by giant mining houses not co-operating, which prospered under apartheid, to continue to hold sway in the democratic South Africa.
Despite this ruling, the department has reviewed its policy- making and regulatory framework to effect and support structural transformation and the progressive distribution of
mineral benefits. Most specially, the MDRE has taken the necessary steps to amend regulations of section 75, 76 and 77 of the Mineral and Petroleum Resources Development Act, MPRDA, in the previous financial year. This has been done to ensure that the attainment of the government’s objective to redress the historical socioeconomic inequalities, broad-based economic empowerment and the meaningful participation of the historical disadvantaged South Africans in the mining industry, whilst special emphasis will be placed on enforcing compliance with legislation for amendments around the mining activities.
Another growing concern that explains why South Africa’s mining sector lacks in the Fraser Institute’s ranking is the politicised environmental justice organisations that have strong resistance against the mining of minerals, especially fossil fuels, such as coal and crude oil. Some of these organisations use their low capabilities as special privileged access to capital, to influence respective land owners to successfully challenge plans to open new mines and expand the existing ones, irrespective of mechanisms in place to correct environmental externality.
Overall, despite this hurdles, the DMRE is committed to establishing a framework for engagements with respective land owners, as well as broadening public consultations to promote participatory justice concerning issues of exploration.
It would never be a debate in mining if hon Madokwe was not to bring up the issue of the economic and political impacts of illegal mining. And she is correct, but she likes to give the impression that the department is responsible for illegal mining and therefore should be held accountable. It is not the case. This impression is incorrect and is the criticism of the diagnosis and the optimism of the ... [Inaudible.].
To be clear, the department together with Minntac has been involved in the rehabilitation of the derelict and ownerless mines, since derelict and ownerless mines catalysed illegal mining, which is increasingly becoming harmful to the operational and licenced mines. I am going to tell you now.
The department is only allocated R140 million per financial year, which is not enough to rehabilitate or seal 40 shafts, which is what they are supposed to do. So, the department needs approximately R49 billion to rehabilitate and close
6 100 mines that were mostly neglected by the apartheid government and former mine owners.
Regardless of budget constraints, the department remains committed to rehabilitating and seal of these shafts identified as ownerless and derelict mines, to help the improvement of the environmental health around such sites. And we know, some of the people in this Hose are going around lobbying those environmental justice people to stop the development of the mining industry and the petroleum industry in the country.
It is about time that, at some point, they will have to come out and be identified that they are economic sabotaging, because that is what they are doing. Thank you very much. [Interjections.]
The CHAIRPERSON (Ms R M M Lesoma): I now recognise the Minister of Mineral Resources and Energy. Hon Minister, over to you. However, just for fairness, without you telling me to say so, it is was a ... No, no, no, don’t interact with me, please. Hon Minister, you are also humbly requested in future to sit on my right side, so that all of us conform with the
protocols of the House. They will orientate you after the debate.
The MINISTER OF MINERAL RESOURCES AND ENERGY: Thank you very
much, hon House Chairperson and hon members. It is a pity that when you come to a Budget Vote debate, you are expecting to get ideas. Now, when you have an opposition party that doesn’t make that contribution, you leave the debate poorer. You leave the debate poorer. Let me just take you through because time is very limited. Let me deal with few issues.
Do you know that hon Cachalia is brandishing a book by De Ruyter? Okay! The speaker of the DA talks to that issue. This is what they say: A cold war ideology, which is outdated. That means there are two points of reference for the DA. It is the De Ryter point - a dentist was given a task to undertake a heart surgery. That is your point of reference. Your second one is Oosthuizen, an apartheid spy who wrote a research that was not researched, and you use that as a point of reference.
I think it is very important for us to deal with those issues or ... Actually, I can tell you that I am expecting more from the DA, referred to those researches, because that is your
point of reference. Actually, can I tell you what I am reading out of it. Let me tell you what I am reading out of it. It is that the DA is too desperate to get into power and it is showing us that it will take us back to the apartheid era. [Inaudible]. Yeah! That is what it changed. [Interjections.] If we will do that, it can be rubbish, but that is what you are sending as a signal. One time, we told you that ... [Interjections.]
The CHAIRPERSON (Ms R M M Lesoma): Don’t drown the speaker please!
The MINISTER OF MINERAL RESOURCES AND ENERGY: We told you that
if you take an alpha and you put an area that requires a fixer you will not fix the problem. That is the problem we are dealing with now. We are fixing it, and we are going to fix it, I can tell you. That it is the first thing. That is what I have read out of the DA contribution - that you have two points of reference: De Ryter and Oosthuizen. It is fine and good for you. I can wish you good luck.
Secondly, the DA says the MPRDA must be done away, the Mining Charter must be cancelled. In other words, it means it must be
free for all; there must be no governance. That is what they say. That there must be no regulation. No! The problem with the DA is that they are very strong at talking and very weak at listening. As a result of that, they don’t hear anything that we say in the House because you don’t listen.
You howl back when we are speaking. Please correct that! Now you see, if you call it rubbish that is an insult, Kevin. You are not hon Mileham when you talk rubbish, having this disrespectful ... No, it is disrespectful and actually rude. Okay, I am just giving you that as a basic lesson.
Before I sit down, let me acknowledge the Deputy Minister for talking about two important entities: One is SA Nuclear Energy Corporation, Necsa, a very important entity, which is dealing with a nuclear research; and Mintek, which is dealing with mineral mining research. They are doing good work. I think we must have more time, either in the portfolio committee or other structures, to give more details of those, because those entities are doing good work for the country and for the department.
So, thank you very much for all your contributions. We will take ideas, where there are ideas; where there are no ideas, we will just ignore them. Thank you
Debate Budget Vote 8, Mineral Resources, concluded.
The CHAIRPERSON (Ms R M M Lesoma): Thank you, hon Minister. All the hon members are reminded that the debate on public service and administration, including National School of government and Public Service Commission Budget Votes will take place at 14:00 in this Chamber. The debate for Government Communications and Information Systems Budget Vote will take place at M46.
The Business of the House concluded.
The Mini Plenary rose at 12:04.
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