ATC141030: Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Province of Gauteng, on the 25 – 26 September 2014, dated 29 October 2014

Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Province of Gauteng, on the 25 – 26 September 2014, dated 29 October 2014

The Portfolio Committee on Mineral Resources, having undertaken an oversight visit to Gauteng, reports as follows:

1. Introduction

Illegal mining activities have assumed serious proportions, with about 6 000 people estimated to be involved in illegal underground mining and another 8 000 in illegal surface mining. In 2011 alone, it was estimated that illegal mining subtracted about R6-billion from the country’s fiscus. Free State Supreme Court Judge Jake Moloi stated that “these illegal activities are orchestrated and are syndicated with the foot soldiers doing the dirty work for the faceless bosses”. In many cases illegal miners have died – either because of accidents underground or because of fights between rival gangs underground or through the actions of mine security. Illegal mining and also the theft or destruction of mining assets have been a feature of the poorly managed liquidations of mines such as Pamodzi Gold and Blyvooruitzicht . Illegal mining activities have jeopardised or prevented the re-opening of such mines, with further negative implications for mining employment. Illegal mining is also associated with increased environmental harm.

Since 1999, the scale and intensity of illegal mining has only increased. Judge Jake Moloi pointed out in a judgement in March 2014 that: “There is no law regulating the illegal mining activities. The most the State can charge the illegal miners with is Trespass and Theft or Attempted Theft as in our case.” In an unusual intervention, Judge Moloi called on Parliament “to enact a law that will have harsh punishment for illegal [mining] activities which are assuming horrendous proportions.”

Acid Mine Drainage (AMD) related to gold mining is a malady that affects many areas in SA, but particularly the Vaal River basin in Gauteng. The problems are huge. They are the result of careless mining practices in the past and pose a serious threat to future generations of South Africans. The old mine shafts are filled with groundwater when they are abandoned and the minerals in the rocks leach into the water.

The overall effect is to render the water toxic to varying degrees, making it both a hazard and unfit for human or animal consumption or for agriculture. This problem of AMD is now largely the responsibility of government and the Department of Mineral Resources (DMR) allocate funds both to the Council for Geoscience and Mintek from its budget specifically to find practical and economical methods to deal with AMD.

2. Background

A delegation of the Portfolio Committee on Mineral Resources (the Committee) visited Gauteng Province from 25 – 26 September 2014

The Committee visited the Council for Geoscience and Mintek (at its pilot Savmin plant in Roodepoort) to understand the practical measures that are in place and to form a view on whether the resources currently voted to deal with AMD are sufficient . The National House of Traditional Leaders was also visited to engage with traditional leaders on mining issues as they relate to communities.

The visit included an orientation briefing by the management of the DMR, mine owners and national security officials on illegal mining and a tour to illegal mining areas,

3. Composition of Delegation

3.1 Parliamentary Delegation

The delegation was composed of the Chairperson of the Committee as the Leader of the delegation, Mr S Luzipo (ANC), Mr ZMD Mandela (ANC), Mr MH Matlala (ANC), Ms MV Mafolo (ANC), Ms NM Mdaka (ANC) Mr I M Pikinini (ANC), Mr J Lorimer (DA), Mr S Jafta (AIC).

Accompanying the committee was the Committee Secretary Miss A Boss, Committee Researcher, Dr M Nicol , Communication Officer, Mr J Molafo , Committee Assistant, Mr M Zibeko .

3.2 Department of Mineral Resources

Mr D Msiza , Chief Inspector of Mines, Mr S Phetla , Assistant Director: Communication, Mr V Magagula , Parliamentary Liason Officer, Ms M Malebe , Regional Manager, Mr R Masenya , Director: Mine Closure, Mr K Mhlongo , Office of the DG, Mr K Matrose , Office of the DG, Ms R Zwane , Office of the Minister, Mr R Serota , Communication officer

3.3 Council for Geosciences

Prof P E Ngoepe , Chairperson of the Board, Mr M W Kota, CEO, Mr LD Matsepe , CFO, Dr G Graham, COO, Mr T Mawela , Quality Assurance, Mr M J Moyapuo , Business Development, Dr M Makgae , Manager.

3.4 Mintek

Dr A Mckenzie , General Manager Technology, Mr H Michau, Manager: Inforcomms , Ms L Letsholo , Executive PA, Ms F Tanjekwayo , Events Coordinator, Mr M Makhafola, General Manager: Research and Development, Mr L Kruger, Manager: HMD, Ms P Muzadi , Senior Engineer, Mr S Mokoena , Senior Engineer, Mr F Mathebula , Chief Operator, Mr J Makharetsa , Senior Operator, Mr N Nyambeni , Technician, Mr E Tshweneyame , Communication Officer.

4. Briefing by the Department of Mineral Resources on illegal mining

The Committee met with the task team that deals with the illegal mining in Gauteng in the head office of the Department of Mineral Resourced in Pretoria. The Committee was welcomed by the Minister of Mineral Resources, Adv Ngoako Ramatlhodi hoped the Committee would have fruitful engagement during the course of the visit.

The Deputy Minister, Mr Godfrey Oliphant said the DMR wanted by to see “stability” in the fight against illegal mining by December 2014, eventually leading to the total eradication of the practice by February 2015. He commented that the battle against illegal mining is not getting any better but they are determined to reclaim the country from illegal miners and needed to get all the co-operation.

Mr David Msiza gave a presentation on the illegal mining. He indicated that the illegal mining activities in Gauteng Province mainly occur in the Far East Rand, Ekurhuleni, Central Rand, West rand and Far West Rand. Illegal mining adversely affects the health and safety of the mine employees, communities and illegal miners as it is in the past resulted in a significant loss of life mainly as a result of underground fires, fall of ground accidents and murder. It has a negative impact on the country’s economy and results in a significant loss of revenue for the state and the mines. According to a 2007 study it was found that close to 10 % (i.e. R5.6 billion) of gold production is stolen and smuggled out of the country. Mr Msiza reported that factors fuelling illegal mining included national and international organised crime syndicates which are targeting the mining sector. They are highly organised, dangerous, well financed and complex. They take advantage of mine closures and liquidations with consequential job losses especially on derelict mines. The majority of the people doing the digging are from outside South Africa, most come from Lesotho, Mozambique and Zimbabwe. They use proceeds from the illegal mining and asset theft for furtherance of other crimes including murder and many robberies. The miners have explosives, some of which are smuggled in from Zimbabwe. The syndicate activities fall within the framework of Prevention of Organised Crimes Act (POCA).

Mr Msiza briefed the Committee on the Level 1 illegal Mining Modus Operandi. He said that some mine employees on operating mines give or sell clocking cards to illegal miners. They mine for personal gain during normal work hours or outside normal hours. Mine employees supply illegal miners, who spend extended periods underground, with food and consumables at exorbitant prices. The illegal activities are also linked to theft of gold and assets from processing plants.

The illegal miners access underground operations through collusion with employees or mine security, getting access cards and sometimes they can pay around R7500 as bribes to get underground. Alternatively, they dig around concrete slabs of sealed shafts, enter through derelict mine shafts and openings in the ground. This activity is very dangerous, with poor ventilation and the risk of cave-ins. The illegal miners dig for gold bearing material (GBM) on surface at demolished plant locations, rail tracks and slime dumps. They process GBM using mercury in old underground workings, hostels, next to streams and in their backyards.

Mr Msiza reported that the DMR established a Gauteng Stakeholder Forum which is implementing measures on key focus areas to strengthen access control and security measures at mines. Derelict and ownerless mines are rehabilitated. Open holes, shafts and openings are continuously identified and sealed by DMR, CGS and mining companies. Stakeholders review and implement effective methods for preventing access to underground workings. The DMR encourages mining of surface outcrops where possible utilizing opencast mining methods. The use of land where illegal mining sites have been rehabilitated is encouraged. A workshop was conducted with all the stakeholders including the NPA, SAPS and mining companies on all the relevant legislation which will strengthen the formulation of charges and sentencing of kingpins/illegal miners. Small (registered) metal refineries have been identified as a weak point and the validity of licences have been verified. He further reported that the National Coordination Strategic Management Team (NCSMT) was established by the JCPS to coordinate government’s efforts to fight illegal mining and the trafficking of precious metals. The Gauteng Forum also reports to the NCSMT. SAPS have established Mines Crime Combating Forums for the purpose of combating crimes that are occurring in the mines and also to tackle illegal mining.

Mr Msiza reported that there are many challenges which the authorities face, including, amongst other things, the violent attacks on SAPS, DMR, CGS and mine officials; continuous re-opening of sealed holes and new holes being excavated by illegal miners; mine and surface infrastructure being compromised as a result of mining of remnants and stability pillars; degradation of the environment including water, soil and air pollution by processing using water from streams and using mercury; the increase in crime associated with illegal mining including murder as a result of rival gang activity and the theft of copper cables and steel.

The achievements were reported as follows: The DMR and CGS have sealed 126 open shafts and holes in Gauteng Province; improvements have been introduced in the access control at the mines including, amongst others, Facial Biometric Access Control Systems. The frequent vetting of security personnel has been accompanied by successful disruption operations, raids and arrests. During March 2014, a mine manager was arrested after he was allegedly found in possession of 1 ,3 kilograms of gold believed to have been 80% pure and worth about R500 000. In June 2014, Sibanye Gold employees were arrested at Driefontein Gold Plant for an alleged multi-billion Gold theft. It was believed that the employees were part of a syndicate. ITAC, which is subsidiary of DTI, has imposed customs controls to stem the export of scrap metal.

Ms Msiza concluded that the Gauteng Illegal Mining Forum will continue implementing measures to eradicate the illegal mining activities. They will continue with the rehabilitation of derelict mines and the sealing of open shafts and holes to prevent access to underground workings. They will support the enforcement agencies initiative including strengthening of charges and sentencing of criminal syndicates. The DMR will consider how to strengthen the legal provisions to criminalize illegal mining activities. Small refineries will be identified and the validity of their licences (to deal in precious metals) will be investigated. The DMR will promote legitimate mining and removal of exposed minerals where possible.

4.2 Briefing by National Coordination Strategic Management Team

The National Coordination and Strategic Management’s (NCSMT) briefing was presented by Ms Sebona on behalf of Maj Gen Mabula of the SAPS Directorate of Priority Crime Investigations (DPCI).

The purpose of the presentation was two fold ; first was to apprise the Portfolio Committee on the threat of illegal mining and the subsequent trafficking of precious metals and related crimes; second was to highlight current strategies employed and progress in implementing them.

A comprehensive and impressive presentation gave a background on where the Illicit Mining project stems from, gave insights into the scope and extent of illicit mining as well its cross-cutting, cross-impacting nature. Because of the international criminal links, its impact on national security was amplified.

The committee was also briefed on the work of the NCSMT, its strategic alignment, governance structure and interventions, both operational and strategic. The modus operandi of syndicates was shared and project successes were also highlighted.

Ms Sebona concluded the briefing by highlighting some constraints that impact on the efficacy of the existing NCSMT strategies.

4.3 Briefing by Gold One

Mr John Hericourt , representative from Gold One briefed the Committee on the mining company perspective on the illegal mining. He reported that with over 230 known shafts and holes for access on the East Rand, organised illegal mining and theft has increased dramatically since 2009. Apart from the substantial theft of gold bearing material and scrap metal, these activities have resulted in significant loss of life due to fall of ground incidents, gassing and heat exhaustion, smoke and fume inhalation and faction fighting. He reported that shaft closure work carried out by Gold One alone since 2010 cost R7 125 626.

Mr Hericourt indicated that as a way forward an Illegal Mining Security Task Team should be put in place specifically to monitor and target illegal mining activities. There should be regular ongoing liaison with DMR and CGS on all incidents and new holes. When holes are located they are fenced and security put place to guard them. A two week warning notice of closure is distributed in and around the hole and, where possible, holes are sealed with concrete plug in the solid rock. Gold One personnel are active participants in the Illegal Mining Forums.

5. Visit to Council for Geosciences

Prof Ngoepe , Chairperson for Council for Geoscience (CGS) welcomed the delegation from Parliament and introduced his team.

The problem of Acid Mine Drainage (AMD) related to gold mining is now largely the responsibility of government. The DMR allocates funds both to the Council for Geoscience and Mintek from its budget specifically to find practical and economically viable methods to deal with AMD. The purpose of the visit was to understand the practical measures that are in place and to form a view on whether the resources currently voted to deal with AMD are sufficient. CGS is involved in closing/rehabilitating ownerless and derelict gold mines in ways that stop the ingress of illegal miners into the old workings.

Mr M Kota, the CEO presented the mandate, strategy and objective, business model, funding and key programmes for CGS. CGS has faced many challenges which include declining contract revenue, inadequate statutory funding, delays in the implementation of the Geoscience Amendment Act (Act No 16 of 2010), ageing infrastructure and the need to refocus and align the organisation to address SA’s development challenges. Different scenarios for the practical rehabilitation of derelict and ownerless mines were presented to the Committee.

Mr Kota reported that there is a closure programme aiming at sealing 45 holes in the current financial year. Illegal mining poses challenges for the safety of field staff and contractors. The sustainability of closures is jeopardised as holes are often re-opened by illegal miners after they have been sealed by the CGS.

Dr M Makgae outlined the objectives of the strategic mine water management project which are to prevent ingress of surface and groundwater into the underground workings; manage decanting of mine-polluted water; predict and prevent harm to the environment; apportion pollution sources and liabilities; develop a mine water management strategy and canalisation of the natural watercourse between Florida lake and Fleurhof Dam.

6. Visit to the National House of Traditional Leaders

The Committee paid a courtesy visit to the National House of Traditional Leaders (NHTL). The Chairperson, Kgosi Maubane welcomed the delegation from Parliament and introduced the delegation of traditional leaders. The Chairperson outlined the purpose of the visit which was to engage with NHTL on issues related to mining. He indicated that the committee had an initial stakeholder engagement on the 20 ^th August with some mining stakeholders and the Committee felt that as the time goes it needs to engage with traditional leaders and the mining communities.

The discussion between the NHTL and the Committee included:

• It was realised that communities are not conversant with the sort of agreements which they need to sign with mining companies. A proposal was made on the model that could be used when dealing with mining companies especially by allocating the 26% HDSA ownership minimum for communities.
• There are challenges experienced by communities as there is no proper consultation. It should be obligatory for mining companies to indicate the consultation times with the communities;
• The NHTL raised a concern on the manner in which rural communities are exploitated by mining companies. Communities say there is very little in terms of co-operation;
• They felt that people who own land must also get a share in the mining business, and not be involved just as labourers;
• The communities are never offered workshops or other opportunities to get education about legislation affecting them. The traditional leader will just only be asked to sign the document without any understanding;
• There is a big concern on the level of benefit the communities get from mining;
• The percentage received by communities should a free ride and should not include debts of the company and should not have any conditions.
• Housing conditions should be revisited;
• The NHTL indicated that mining must not create families that do not have fathers. Benefits in terms of shelter must begin where the worker comes from.
• The Institution of traditional leaders must be involved from the initial stage and not only be roped in the middle;
• The Traditional Council should make sure that it does not only benefit one family but the community must benefit broadly;
• The issue of mining companies interacting directly with communities creates huge problems as it divides the communities. In an area where there is traditional leader, the mining companies should liaise with traditional leaders; and
• The issue of BEE partnership is a serious concern. First consultation should take place with the communities of the area to allow them to get the rights to minerals, before someone from another province is approached.

7. Visit to Mintek treatment Plant

Mr A McKenzie welcome the delegation from Parliament and outlined the process of water treatment for Acid Mine Drainange (AMD). There are four stages that takes place before water can become clean and fresh. Stage 1 is Metal Precipitation, Stage 2 is Ettringite Precipitation, Stage 3 is Carbonation and the final stage is Recovery of Al(OH)3 Reagent.

Mr McKenzie further reported how Mintek is conducting its part in the project on Derelict and Ownerless mines. In the Project planning, he outlined that they attend to site characteristics, data collection, mapping and surveying, soil sampling, geotechnical investigation and health and safety investigation for two months. For detailed design, they hold community meetings, site the access roads, locate water and fill material, undertake detailed engineering design and specification and complete construction drawings for two months. The tendering process takes about two months where tender documents are complied, site meetings conducted and the contractor is introduced to the community. The construction takes about four to twelve months. This includes the site establishment, hire of local labour and conduct of medicals, constructing access roads, site construction, regular monitoring and inspections, quantity surveyor verification, invoicing control, final surveys and inspections and reporting.

Mr McKenzie stressed that dealing with the legacy of ownerless and derelict mines is a long term and almost an endless project. Mintek has, so far been dealing mainly with old asbestos mines. These are the most urgent in terms of health hazards, but they are many other coal , gold and other mines, including quarries, where the state has the responsibility for rehabilitation. There is an urgent need for funding to be made available on a rolling basis so that work does not come to an end when the present fixed term funding is completed. This means that work has to start again from scratch when new funding is allocated.

8. Walk about to areas where illegal mining is taking place

The Committee visited the following areas:

A. West Rand

Illegal mining takes place in Krugersdorp ( Mogale Gold) and Roodepoort (Durban Roodepoort Deep Gold Mine).

B. Ekurhuleni

The illegal mining activities take place along the mining belt from Germiston (Primrose Gold Mine) through Boksburg , Benoni ( Benoni Gold Mine and Gravelotte Gold Mine) Brakpan (New Kleinfontein Gold Mine and Consolidated Modderfontein Gold Mine), Springs ( Grootvlei Gold Mine) and Nigel ( Marievale Gold Mine).

None of the old gold mines in the area are operating and Pamodzi Grootvlei Gold Mines, which occupies much of the area, is in liquidation.

The Committee had an opportunity to engage with the Community in Roodeport . They indicated that they had a problem with illegal mining as their lives on a danger. Illegal mining happens in a day light and they have a problem with police as when they report the incidents, the illegal miners don’t get arrested. One of the community members indicated her house might fall any time as she discovered that there is a hole at the back where illegal miners used to mine gold.

Committee members spoke to some illegal miners and saw then coming up from underground with bags of ore, hammers, chisels and head-torches. They were shown how the ore is crushed by hand and then washed out on James tables constructed by the illegal miners. Many miners ran away when the Committee (and the police, emergency services, DMR and CGS) approached them. The Committee saw stockpiles of ore in bags piled up just off Main Reef Road, waiting for collection by bakkie . The scale of the illegal mining is evident right along the reef. The freshly dug holes – many substantial excavations – go steep and deep into the earth, posing an immediate threat to communities in these heavily populated areas.

9. Findings

The Committee observed the following:

Illegal Mining

· The reports presented to the Committee were not just good, they were a real eye opener. The Committee was very impressed by the knowledge, dedication and professionalism of all the officials, security and mine staff they interacted with;

· There is an evident of lack of capacity and resources in dealing with illegal mining at present. All parties said the problem is worse than in 2009, when the PC last considered the issue;

· The issue of legislation to combat illegal mining is quite critical. There should be careful consideration of creating silos legislation;

· Most of illegal miners are foreign citizens and they enter the country illegally;

· The Committee found out that there were more than 700 people underground these holes who are illegally mining; and

· Police officials are not sure how to take statements when these illegal miners get arrested.

House of Traditional Leaders

· There should be more engagements with traditional leaders especially with the departments that issue mining licenses and the Committee;

· As the Mining Charter reaches it ten year milestone, it would assist if the NHTL would undertake to contribute to the process of evaluation; and

· The visibility of NHTL is not seen.

Acid Mine Drainage

· The Council for Geosciences and Mintek have done a lot of work in dealing with AMD and Derelict and Ownerless mines; and

· More funding is needed especially in CGS for ageing infrastructure.

10. Recommendations by the Committee

The Portfolio Committee on Mineral Resources having heard evidence from all stakeholders listed above recommends the following:

· The Department of Home Affairs needs to tighten immigration laws to prevent foreign illegal miners from being in the country;

· There should be a workshop of police officials on how to take statements with regards to illegal mining;

· There should be more engagements between the NHTL and the department on the issuing of mining licenses, a process that should also include community participation;

· The DMR should increase the funding for CGS in order to carry out its mandate and implement the Geoscience Amendment Act;

· The DMR should suggest how the law can be changed to prosecute illegal miners and make the job of police easier. This is already recommended by the Free State High Court judgment: Mugota v S (A244/2013) [2014] ZAFSHC 25 (13 March 2014) ;

· When the police arrest people there is a 9 month backlog to verify that they were in possession of unwrought gold. This makes it almost impossible to follow-up with cases because a person has to be released within 48 hours if there is no evidence of breaking the law. The scientific facilities of the CGS should be made available to assist the police rapidly with these forensic inquiries;

· The illegal use of water by illegal miners requires consideration by the PC on Water and Sanitation;

· There should be a study by DMR to see if some illegal miners can be made into legal small scale or artisanal miners in this environment;

· There is a need for better legislation to deal properly with the closure of mines. The more you close the gold mines, the more you are creating conditions that encourage illegal miners. The DMR should research sustainable mine closure, that considers both the environment and community issues; and

· The municipalities approve zoning for human settlement despite the fact that these may be in danger zones because of the geology (dolomite), pollution/radioactivity or because of undermining by old mining and present illegal mining. The Constitutional Court has found that land use management is a local and provincial function and is not within the powers of the DMR. There needs to be a better intergovernmental arrangement to stop municipalities zoning for human settlement land that is subject to geohazards .

Report to be considered