ATC130524: Report of the Portfolio Committee on Mineral Resources on the Strategic Plan and Budget Vote 32 of the Department of Mineral Resources for the 2013/14  Financial Year, dated 22 May 2013

Report of the Portfolio Committee on Mineral Resources on the Strategic Plan and Budget Vote 32 of the Department of Mineral Resources for the 2013/14 Financial Year, dated 22 May 2013

The Portfolio Committee on Mineral Resources, having considered the Strategic Plan 2013/14 and Budget Vote 32: Mineral Resources, reports as follows:

1. Introduction

The aim of the Department of Mineral Resources is to “promote and regulate the minerals and mining sector for transformation, growth, development and ensure that all South Africans derive sustainable benefits from the country’s mineral wealth”. Although the Department is carrying out all of its programmes, substantial parts of the mining industry are in crisis at present due to a mix of unfavourable economic factors and industrial relations discord. This has created a climate in which employment growth in the industry (positive until mid-2012) has turned into job losses and in which international investors are questioning the extent of their exposure to South African mining ventures.

The Strategic Plan of the Department of Mineral Resources (the Department) and Budget vote 32 were referred to the Portfolio Committee on Mineral Resources (the Committee), for consideration and report, on 19 March 2013. The Committee received briefings from the Department on its Annual Performance Plan for the 2013/14 period and 2013/14 Estimates of National Expenditure on 24 April 2013.

2. Overview of the 2012/13 financial year

The Department of Mineral Resources outlined four priorities over the medium term in the 2012/13 budget.

Policy and legislative developments

· Stakeholder engagement to assist the mining industry to unlock current constraints, coordinated through the Mining Industry Growth, Development and Employment Task Team (MIGDETT).

· The review of the Mineral and Petroleum Resources Development Act (2002).

· The review of the Mine Health and Safety Act (1996).

· An online mineral resources administration system to process mining licence applications.

· Improved results related to the targets of the Broad Based Socioeconomic Charter for the South African Mining Industry, following the establishment of a compliance inspection and enforcement unit.

Minerals beneficiation strategy

· Further progress with the mineral beneficiation strategy adopted by Cabinet in June 2011. Two of the five pilot value chains (iron, steel and energy) were approved by Cabinet in October 2011.

Mine health and safety

· The Department’s concern with both accident statistics and many issues related to occupational health.

The environment

· The rehabilitation of twelve derelict and ownerless mines was planned for 2012/13.

MIGDETT has continued with its ongoing work and is also playing an important role in dealing with newly intensified constraints on the performance of the industry following the Marikana tragedy and the spread of unprocedural industrial action.

A draft bill to amend the Mineral and Petroleum Resources Development Act (2002) (MPRDA) was gazetted for comment in December 2012 after Cabinet approval. It has yet to be tabled in Parliament.

The promulgation of the amended Mine Health and Safety Act (1996), as well as amendments to the Precious Metals Act (2005) and the Diamonds Act (1986) were planned for 2012/13; but not completed. The Geoscience Amendment Act (2010) came into effect from 1 July 2012. The regulations to the Act, which were intended to be finalised in 2012/13 have not yet been published for comment.

The online mineral resources administration system to process mining licence applications was launched in April 2011 but has yet to achieve its full potential.

There has been more reporting on the results of the Broad Based Socio-economic Charter for the South African Mining Industry, but it is not clear either that compliance has improved or that compliance necessarily produces the transformation outcomes. The 2011/12 Annual Report of the Department confirmed that audits had “established that compliance with the requirements of the Mining Charter were very low”.

2.1 Policy Priorities for 2013/14

The President’s reference point for the 2013 State of the Nation address was the National Development Plan (NDP). The NDP suggests that the policy priority for the mineral sector is to address the “central constraints” on the growth of the sector. These are named as “uncertainty in the regulatory framework and property rights; electricity shortages and prices; infrastructure weaknesses, especially in heavy haul rail services; ports and water including skills gaps.”

The NDP is a national plan which, while it has been adopted by Government, will necessarily require contributions and commitments from all stakeholders for it to be successful. The Department of Mineral Resources is not responsible for all aspects of the NDP, for this reason, but it will have to ensure that its activities are aligned with the National Development Plan, which includes substantial commentary on the mining sector.

The following proposals to grow investment, outputs, exports and employment in the minerals cluster are listed in the NDP:

· Address the major constraints impeding accelerated growth and development of the mining sector in South Africa . The main interventions include:

· To ensure certainty in respect of property rights; and to ensure a predictable, competitive and stable mining regulatory framework by passing amendments to the Minerals and Petroleum Resource Development Act (2002) in order to secure, reliable electricity supply; and secure, reliable rail services, potentially enabling private participation.

· Develop, deepen and enhance linkages with other sections of the economy. This includes linkages with:

o both manufacturers of inputs (capital goods and consumables) and suppliers of mining-related services; and

o downstream producers, especially for platinum-group metals and chrome ore. In this regard, an export tax could be considered.

· Provide focused research and development support to enable improved extraction methods that lengthen mine life. This includes

o better energy efficiency and less water intensity; and

o alternative uses of South Africa 's extracted minerals, especially platinum-group metals, titanium and others that have potential for application in new energy systems and machinery.

· Identify opportunities to increase regional involvement and benefit in the whole minerals cluster. This could include encouraging the establishment and development of alternative providers of partially processed intermediate inputs in other countries in the region.

· Ensure active engagement on, and resolution to, issues raised through the Mining Industry Growth and Development Task Team process (MIGDETT).

· Improve alignment of mining charter requirements to ensure effectiveness in local communities.

These issues all find mention within the expenditure plans outlined in the 2013 Budget for Vote 32: Mineral Resources, which also includes important issues of mine health and safety, which are not specifically mentioned in the NDP as a priority.

The 2013 Budget refers directly to the NDP and, in particular, repeats very optimistic projections for employment growth based on the minerals cluster. It states that: “300 000 direct and indirect jobs could be generated by 2030” from the mining industry. This prospect will depend upon resolving the current serious labour and economic problems in the sector. The imperative of bringing stability to the mining sector from an industrial relations perspective was highlighted by the President in the State of the Nation Address.

2.2 Departmental Strategic and Annual Performance Plan 2013/14

The Department’s Annual Performance Plan (APP) is in line with its Strategic Plan. The Department is confident that the various stakeholders would be making useful input on the MPRDA Bill and it would progress as planned.

There were several important rehabilitation projects planned in the country. The Department will increase capacity so that is able to implement the National Environmental Management Act (NEMA) and it would be creating one regulatory process for environmental management over mining.

The total budget for the Department was R1.394 billion for the 2013/14 financial year. This represented an average growth of 10.8 per cent between the 2009/10 and 2012/13 financial years, and it was projected to grow by 11.7 per cent on average over the medium term. The funding was shared between the departmental programmes and entities under the control of the Ministry, which respectively accounted for 54.9 per cent and 45.1per cent of the total. The level of under spending was maintained, to be far below 5 per cent for the 2012/13 financial year.

The overall expenditure is expected to increase, in real terms, from R1.394 billion in 2013/14 to R1.619 billion in 2015/16. The increase is attributable to additional funding received over the Medium Term Expenditure Framework (MTEF), in respect of the following items:

-R102.2 million for improved conditions of service for the Department and Public Entities
-R18 million in 2015/16 for economic support and competitiveness packages, for the Council for Geosciences (R12 million) and Council for Mineral Technology (R6 million)

-R 81 million allocated to the Council for Mineral Technology for waste scrap reprocessing and sensor based sorting projects

-R160 million for the rehabilitation of derelict and ownerless mines

-R 59 million for the implementation of the National Environmental Management Act (NEMA), and the upgrading of the South African Mineral Resources Administration System (SAMRAD)

The expenditure estimates for Programme 1: Administration were expected to increase from R 257.3 million in 2012/13 to R289.9 million in 2015/16 at an average annual rate of 4.1 per cent over the MTEF. The increase was attributable to inflationary adjustments.

Programme 2: Mine Health and Safety Inspectorate expenditure was expected to increase from R150.6 million in 2012/13 to R179.8 million in 2015/16 at an average rate of 6.1 per cent per annum. The increase relates to the additional allocation for inflation related adjustments.

Programme 3: Mineral Regulation was expected to increase from R187.8 million in 2012/13 to R249.1 million in 2015/16 at an average annual rate of 9.9 per cent. The increase relates to the additional funding received for the NEMA implementation and the South African Mineral Resources Administration System SAMRAD upgrade of R59 million.

Programme 4: Mineral Policy and Promotion expenditure was expected to increase from R579.9 million in 2012/13 to R900.5 million in 2015/16 at an average rate of 15.8 per cent per annum. The increase was due to the new allocation for the rehabilitation of derelict and ownerless mines, to economic support, and to the competitiveness package for the Council for Geosciences and Council for Mineral Technology (Mintek).

The expenditure on compensation of employees increased in line with inflation at an average annual rate of 7.2 per cent between 2012/13 and 2015/16. The increase in the goods and services expenditure item for the 2013/14 financial year was credited to new funding for Rehabilitation of Ownerless and Derelict Mines, implementation of NEMA and upgrades on SAMRAD. The transfers and subsidies expenditure item also increased by 20 per cent, owing to new funding being obtained for waste scrap processing and sensor based sorting projects (Mintek) and economic support and competitiveness packages for the Department’s entities.

2.2.1 Stakeholder perspectives

With regards to stakeholder perspective, the Department intended to provide reliable and timely information by submitting reports within the prescribed timeframes of National Treasury’s reporting calendar. Service delivery would be improved by assessing the number of defined turnaround times to which the Department adhered, according to the customer satisfaction index. An annual survey would be conducted to do this assessment. The percentage of non-conformity with internal processes was to be reduced. Workshops would be conducted to make sure that stakeholders were aware of internal policy processes. The Department also intended to make sure that Information and Communication Technology (ICT) systems were provided to improve the service capacity of the Department. The outcome was a reduction in the number of calls logged due to system response time. Transformation policies would also be promoted by making sure that invoices to suppliers were paid within 30 days.

2.2.2 Internal processes

The Department intended to improve the number of implemented policies and to implement the approved processes and procedures in time. Turnaround times would also be improved and ICT would be aligned to the business objectives through the Master System Plan (MSP) strategy. In terms of learning and growth, the Department intended to concentrate on management and leadership development, to fill funded vacancies and to attract, develop and retain skills.

2.2.3 Financial matters

The Department intended to produce a clean audit. This will be done by maximising the utilisation of resources through a tighter management policy. In addition, the Department intended to align its budget to the strategy and manage costs effectively through the reduction of irregular expenditure, promoting corporate governance through the full implementation of both internal and external audits, and adhering to the compliance framework.

2.3 Budget Analysis

It is the task of the Department of Mineral Resources to help South Africa to harness its mineral wealth for development. Its budget is comparatively small, barely 0.2 per cent of the total appropriation by vote in 2013/14, but its role in wisely applying laws and fostering the contributions of several state agencies is critical for the growth of the minerals and mining sector. Mining is a business that, in the best of circumstances, is characterised by fierce competition and the uncertainties of commodity markets. The Department of Mineral Resources has to find the best way to retain current investors and attract new investors, at the same time as it is concerned with health and safety on the mines, how real value is created from South Africa ’s rich mineral heritage and how the benefits are shared.

Vote 32: Mineral Resources

Programme	Budget				Nominal Rand change		Nominal % change	Real % change
R million	2012/13	2013/14	2014/15	2015/16	2012/13-2013/14		2012/13-2013/14
Administration	257.3	271.5	276.7	289.9	14.2		5.52 per cent	-0.08 per cent
Promotion of Mine Safety and Health	150.6	163.7	171.4	179.8	13.1		8.70 per cent	2.93 per cent
Mineral Regulation	187.8	222.7	234.8	249.1	34.9		18.58 per cent	12.30 per cent
Mineral Policy and Promotion	579.9	735.9	808.4	900.5	156.0		26.90 per cent	20.17 per cent
TOTAL	1 175.6	1 393.8	1 491.3	1 619.3	218.2		18.56 per cent	11.96 per cent

Source: (National Treasury) Vote 32: Mineral Resources 2013

The budget of the Department of Mineral Resources for the 2013/14 financial year is R1.394-billion. This represents an increase of R218-million over the previous year, a real increase close to 12 per cent when inflation is taken into account.

There has been no significant change with the pattern of past budgets. 54 per cent goes to current payments, 45 per cent to transfers (mainly to the Council for Geoscience and Mintek), with a negligible proportion going to capital expenditure.

The compensation of employees makes up 31 per cent of the total budget, with goods and services at 22 per cent and travel and subsistence at just above five per cent.

The weighting of the programmes as a percentage of the total Vote allocation is indicated in Figure 1, below, for 2012/13 and 2013/14, with the percentage changes in the size of the ‘slices’ indicated next to each programme name:

[This shows that there are no significant changes in the share which each of four programmes has in the total budget for the Department.]

Figure 1 : Vote 32: Comparison of the split of the Mineral Resources budget between Programmes

Source: (National Treasury) Vote 32: Mineral Resources 2013

2.4 Programme Analysis

The strategic plan of the Department outlines in detail the objectives, measures, Medium Term Expenditure Framework targets and initiatives of the four departmental programmes, namely;

· Programme 1: Administration;

· Programme 2: Promotion of Mine Safety and Health;

· Programme 3: Mineral Regulation; and

· Programme 4: Mineral Policy and Promotion.

2.4.1 Programme 1: Administration

The purpose of the Administration is to provide strategic support and management services to the Ministry and the Department.

Programme 1: Administration

Sub-Programme	Budget		Nominal Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Ministry	21.2	20.6	- 0.6	-2.83 per cent	-7.98 per cent
Corporate Services	97.5	111.6	14.1	14.46 per cent	8.39 per cent
Department Management	18.0	19.7	1.7	9.44 per cent	3.64 per cent
Financial Administration	81.5	79.3	- 2.2	-2.70 per cent	-7.86 per cent
Internal Audit	13.7	13.5	- 0.2	-1.46 per cent	-6.69 per cent
Office Accommodation	25.4	26.8	1.4	5.51 per cent	-0.08 per cent
TOTAL	257.3	271.5	14.2	5.5 per cent	-0.08 per cent

Source: (National Treasury) Vote 32: Mineral Resources 2013

Overall, there is no real increase in the budget allocation for Administration. The net R14.2-million increase is all taken up by the effects of inflation. The differences in the percentage increases between sub-programmes are minor and can be explained by the need for training and staff development in the Corporate Services sub-programme in order to attract and retain skilled workers, especially in the mine inspection directorates and by adjustments in the staff complement in other sub-programmes.

2.4.1.1 Corporate Services

Corporate Services, the branch consists of five chief directorates:

· Human Resources Management

· Legal Services

· Auxiliary Support

· Communication and

· Special projects and programmes

2.4.2 Programme 2: Promotion of Mine Safety and Health

The purpose of the Promotion of Mine Safety and Health programme is to ensure the safe mining of minerals under healthy working conditions.

Programme 2: Promotion of Mine Safety and Health

Sub-programme	Budget		Nominal Percent change in 2013/14	Nominal Increase / Decrease in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Governance Policy and Oversight	50.3	49.8	- 0.5	-0.99 per cent	-6.24 per cent
Mine Health and Safety Regions	100.3	114.0	13.7	13.66 per cent	7.63 per cent
TOTAL	150.6	163.7	13.1	8.70 per cent	2.93 per cent

Source: (National Treasury) Vote 32: Mineral Resources 2013

Overall, there is a small, but not noteworthy, real increase in the budget for the promotion of mine safety and health. The differences in the percentage increases between sub-programmes are minor and can be explained by the costs of training for staff and the effects of a cost-cutting programme which allowed funds to be re-prioritised to support Programmes 3 and 4. Eight thousand health and safety inspections and 396 audits are to be commissioned in 2013/14, the same number as in 2012/13.

2.4.3 Programme 3: Mineral Regulation

The purpose of the Mineral Regulation Programme is to “regulate the minerals and mining sector to promote economic development, employment and ensure transformation and environmental compliance”.

Programme 3: Mineral Regulation

Sub-programmes	Budget		Nominal Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Mineral Regulation and Administration	136.2	134.6	- 1.6	-1.17 per cent	-6.42 per cent
Management Mineral Regulation	10.0	43.3	33.3	333.00 per cent	310.04 per cent
South African Diamond and Precious Metal Regulator	41.6	44.8	3.2	7.69 per cent	1.98 per cent
TOTAL	187.8	222.7	34.9	18.6 per cent	12.30 per cent

Source: (National Treasury) Vote 32: Mineral Resources 2013

There is a real increase in the budget allocation for Mineral Regulation which is caused by a structural change in the balance of planned expenditure between the three sub-programmes. More expenditure is now located in the Management Mineral Regulation sub-programme, which provides overall management of the programme. This sub-programme now accounts for 19 per cent of programme expenditure (up from 5 per cent the previous year).

Computer services, leases and travel and subsistence increase markedly as the Programme for Mineral Regulation finalises improvements to the South African Mineral Resources Administration System (SAMRAD) and takes over responsibilities under the National Environmental Management Act (1998) that were previously located within the Department of Environmental Affairs.

The real increases in current payments also impact on the critical sub-programme for Mineral Regulation and Administration, which has 347 staff and administers prospecting and mining rights, and licensing and compliance with the MPRDA. The sub-programme sees a small decline in its budget (in both nominal and real terms) as planned activities are balanced differently. There are plans to increase the output of the sub-programme in several respects. For example the Department intends to increase the number of mining rights granted to historically disadvantaged South Africans from 90 to 200 (assuming that such a number of valid applications are received) and to increase the number of mining charter inspections from 180 in 2012/13 to 210 in 2013/14. On the other hand, costs will be saved by reducing the number of industry workshops on compliance issues from 27 in the current year to 9 per year in the future (one per region) and it further plans to cut the number of environmental inspections from 1 800 to 1 700 in the future.

There is no significant change in the budget for the South African Diamond and Precious Metal Regulator sub-programme, where the 2013/14 budget increase just accounts for the effects of inflation.

2.4.4 Programme 4: Mineral Policy and Promotion

The purpose of the Mineral Policy and Promotion programme is to develop relevant mineral policies that promote South Africa ’s mining and minerals industries to attract investment.

Programme 4: Mineral Policy and Promotion

Sub-programme	Budget		Nominal Increase / Decrease in 2013/14	Nominal Percent change in 2013/14	Real Percent change in 2013/14
R million	2012/13	2013/14
Management	12.1	13.9	1.8	14.88 per cent	8.78 per cent
Mineral Policy	13.8	16.8	3.0	21.74 per cent	15.28 per cent
Mineral Promotion	38.5	44.3	5.8	15.06 per cent	8.96 per cent
Assistance to Mines	18.0	18.0	0.0	0.00 per cent	-5.30 per cent
Council for Geoscience	223.0	265.2	42.2	18.92 per cent	12.62 per cent
Council for Mineral Technology	253.5	291.5	38.0	14.99 per cent	8.89 per cent
Economic Advisory Services	4.1	4.6	0.5	12.20 per cent	6.25 per cent
Mine Environmental Management	16.9	81.7	64.8	383.43 per cent	357.80 per cent
TOTAL	579.9	736.0	156.1	26.9 per cent	20.19 per cent

Source: (National Treasury) Vote 32: Mineral Resources 2013

The Mineral Policy and Promotion programme receives 53 per cent of the budget allocation for Vote 32. This proportion is planned to increase over MTEF period as the major increase in the budget for the Mine Environmental Management sub-programme, introduced in 2013/14, is carried into the future.

The most notable change in the budget in 2013/14 is the R64.8-million increase in the allocation for mine environmental management. The target for the number of derelict and ownerless mines that are rehabilitated per year will rise from 12 in the current year to 30 in 2013/14 and to 50 by 2015/16.

The increase in the allocation for the Mineral Policy sub-programme, while relatively small in Rand terms, amounts to a real increase of over 15 per cent. The responsibilities of the sub-programme include reviewing existing policies and legislation. These are extremely important priorities for the Department, which have been long delayed. Amendments to the Mineral and Petroleum Resources Development Act (2002) and the Mine Health and Safety Act (1996) will be promulgated in 2013/14. The sub-programme will also be organising consultations with stakeholders, attending parliamentary hearings and hosting Kimberley Process Certification Scheme events.

The 9 per cent real increase in the budget for Mineral Promotion speaks to finalising the remaining implementation plans for the beneficiation strategy for the South African minerals industry and the Department of Mineral Resources’ leading role in the Mining Industry Growth, Development and Employment Task Team (MIGDETT). This team is working to resolve issues, such as job creation and retention in the sector, constraints on exploration and on research and development, infrastructure constraints, skills development, and sustainable development in the mining sector. This is part of implementing the mining sector strategy towards a competitive and transformed sector.

Real increases of 13 and 9 per cent respectively are provided for in the 2013/14 budget allocations for the Council for Geoscience and Mintek.

The Council for Geoscience plans small increases in the numbers of mineral maps, map explanations and mineral related publications published per year as well as the numbers of rural development projects finished, including the number of regional and African development projects in progress and the number of completed projects with external collaborators.

The Council is involved in the Witwatersrand water ingress project which aims to provide solutions to acid mine drainage water. It is also responsible for expenditure that will help in closing old mine holes and rehabilitating old abandoned mines. The Council manages a range of activities, with increasing allocations over the MTEF period intended to stimulate investment in the mineral sector.

Mintek does not plan any increases in its output targets in 2013/14, except for the employment of bursary candidates where numbers will rise from 45 to 50.

The bulk of Mintek’s revenue (64 per cent in 2013/14) comes from the sale of products, services and contracted research to the private sector. The opposite situation prevails at the Council for Geoscience where about 24 per cent of revenue comes from engagements with the private sector.

The Assistance to Mines sub-programme transfers funds to prevent the uncontrolled movement of water into and out of underground mine openings and holdings. The budget allocation was not changed in 2013/14, indicating that this item is not keeping pace with inflation.

3. Observations

The Committee, following its deliberations noted the following concerns:

· The Committee wanted to know what processes were in effect to rehabilitate derelict mines and how far the Department had gone in rehabilitation and whether the Department was aware of the problem of open shaft mines, and if so, how it dealt with reporting occurrences of such mines.

The Department responded that because of limitation in budget allocations, priority was given to rehabilitating mines considered dangerous to the community.

· How did DMR justify the allocation of R80 million to the Council on Geoscience, and whether it was allocated for an entire skills set.

The response was that the financial support for Council for Geoscience was critical to enable the Council’s competitiveness. The Department did not conduct research itself, but funded the Council for Geoscience adequately so that it could carry out research. A key factor of the Council for Geoscience's statutory commitment is research, and usage, storage and dissemination of the mineral deposit information.

· The Committee asked whether the budgeted amount was sufficient for filling the existing vacancies, or if it was a general human resource problem which the Department could not fund.

The Department responded that the filling of vacancies was a challenge; it was increasingly difficult to attract mining and chemical engineers with suitable experience to join the Department. In spite of advertising the response was lacking, and the Department was seeking ways of aggressively recruiting and training young engineers in partnership with mining companies. This would also involve measures to retain such recruits as DMR employees in the long term.

· The Committee noted that one of the key issues and challenges within the Department was the establishment of the online application for mining licenses and wanted to know what measures the Department had taken to correct it.

The Department responded that after SAMRAD launched the online application system to deal with the applications for prospecting rights, mining permits and mining rights, the loss of documents and associated delays had been completely eliminated and the process had become more efficient and transparent. From April 2011, all applications rights had to be submitted in electronic format on the Department’s website, and the Department had added more hardware to cope with the increasing online applications. The Department was also in the process of implementing supporting infrastructure. The Department would procure an additional server to ensure the system could cope with the increased information, but this was linked to the budget.

The Department also acknowledged that processing of small business applications had been a concern because miners in remote areas of the country find it difficult to access reliable IT systems. To this end the Department enabled small businesses to get access to computers at the regional offices to ensure they were able to work at the same level as big miners. Capacity building and workshops were also run to help such miners.

· The Committee noted that remarks were made to the effect that vacancies had to be filled and women facilitated in mining projects. They wanted to know which vacancies were being referred to and how many these and what kinds of projects were being referred to.

The Department responded that the main challenge for the Department was filling the 57 positions, which remained vacant, despite advertising. They reiterated that the Department was working with the Minister through the Mining Qualifications Authority (MQA) to increase the number of qualified engineers and other skilled labour for the market. Other challenges were that there was a critical shortage of skills, which had caused a high turnover of current skills, and a disproportionate increase in salaries. The Department had developed a strategy to deal with the challenge of supporting women in mining. The Department had funding for vacant positions. Most of the vacancies were in the mine health and safety sector and here the difficulties were the need for matching the experience to the existing skill set.

· Members reiterated the importance of stating turnaround times and asked what percentages of applications, both in terms of prospecting rights and issuing of statutory notices in terms non-compliance on environmental matters, were not compliant.

The Department responded that the mining or prospecting rights holders were required to comply with environmental laws generally, including the conditions as set out in the MPRDA, the conditions of the Environmental Management Plan (EMP) or Environmental Management Programme (EMPR), and any other authorisations granted to the rights holders. To this end, the Department had stepped up its enforcement on health and safety issues, as well as on prospecting rights conditions, following the recent rights audit. The Department’s enforcement measures would apply to right holders who were non compliant and those who frustrated and willfully failed to implement their social and labour plans, mining works programmes and the Environmental Management Plans.

· The Committee asked what progress had been made with respect to the policies on shale gas and what impact it would have.

The Department confirmed that the issue of fracking in the Karoo had been in the spotlight for a long time. The Department, including a taskforce of government agencies, was studying best practice on fracking, and had completed a draft proposal policy to advise the government on how best to deal with the environmental and social issues associated with fracking. The policy would be discussed by the public and other stakeholders through consultation processes.

· The Committee wanted to know how the Department communicated its policies and plans to the public, and what structures of engagement existed for stakeholder engagement.

4. Recommendations

The Committee recommends that the Minister of Mineral Resources ensures that the Department of Mineral Resources:

· Clarifies their performance targets against other measures, such comparison with particular years and in relation to specific issues.

· Forward to the Committee the percentage of applications where the statutory obligations were met and how many were still outstanding.

· Reviews the service delivery planned outputs, the outputs should be linked to the core policy sub-programmes.

· Improves the alignment of the service delivery planned targets to the strategic outcomes.

· Links the service delivery outputs of the public entities to the department strategic outcomes, track resources allocated to the public entities (transfers and subsidies represent 45 per cent of the Department’s allocated funds).

· Establishes monitoring and evaluation oversight and planning capability over the public entities to improve sector performance.

· Sends a detailed report of rehabilitation of mines with aligned approved budget accounted for in the same report by end of June.

· Sends a detailed report of vacancy rate and how capacity will be improved in regional offices throughout the country by end of June.

5. Conclusion

The Portfolio Committee having considered the Annual Performance Plan and Budget Vote of the Department of Mineral Resources recommends that the House supports Budget Vote 32: Mineral Resources.

Report to be considered.