ATC150910: Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Province of KwaZulu Natal and Eastern Cape, on the 01 – 06 February 2015 dated 12 August 2015

Mineral Resources and Energy

Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Province of KwaZulu Natal and Eastern Cape, on the 01 – 06 February 2015 dated 12 August 2015,  
 

The Portfolio Committee on Mineral Resources, having undertaken an oversight visit to KwaZulu Natal and Eastern Cape, reports as follows:

 

1.         Introduction

 

The Portfolio Committee on Mineral Resources undertook an oversight visit to KwaZulu Natal and Eastern Cape from 01-06 February 2015. The Committee had been made aware of serious problems experienced by the local community at Osizweni, outside Newcastle in KwaZulu-Natal because of illegal coal mining at a derelict mine. This is one of the derelict and ownerless mine sites identified by the DMR and the Council for Geoscience as a priority for rehabilitation because of dangers to the community. The rehabilitation task has been given to Mintek – another DMR entity with expertise this area – but Mintek officials had reported to the Committee that rehabilitation still faced two obstacles. First the site is still worked by illegal miners. Secondly the illegal miners are digging beneath one of the community schools and in so doing they put the safety of learners and staff members at risk. There is actually a need now to relocate the community before the rehabilitation can proceed. But rehabilitation is resisted by the illegal miners. The Committee needed to understand this complex problem at first hand. This is relevant for its oversight responsibilities over the DMR, CGS and Mintek and over the way that mineral law can be enforced in the face of small-scale, illegal mining by community members.

 

The second objective of the visit was to assess progress in dealing with the social, economic and health support available to ex-mineworkers and present mineworkers who originate from the Eastern Cape Province. Historically, the Eastern Cape has provided the greatest number of recruits for the mines of South Africa. Its villages and households still suffer the legacies of the migrant labour system and the careless practices of mining companies. These companies neglected both the health of their employees and their duty to keep proper individual health and employment records.

 

Industry leaders have estimated that some R5-billion is owing to ex-mineworkers. The funds are available to be paid out, but inadequate record keeping in the past, and complex application procedures, have meant that many ex-mineworkers have been unable to access what is due to them. A pilot ‘one stop shop’ facility was set up in Mthatha in 2014 by the Department of Health, in co-operation with the Chamber of Mines (and with union involvement) to address the health, compensation and retirement fund pay-out issues which affect many mineworkers and ex-mineworkers.

 

The one stop shop in Mthatha, now in its second year of operation, provides a full service for each ex-mineworker in assisting to claim payments that are due from the industry and the Mineworkers Provident Fund. The pilot has, it is reported, been very successful and it is intended to roll out the model to the Northern Cape, Limpopo and other parts of the Eastern Cape. Parliament has dealt with the plight of ex-mineworkers continually over the last decade and it is appropriate that the Portfolio Committee should follow up on the concerns that have been raised in the past with a site visit to see how the problems are being effectively tackled in the Eastern Cape. It is from the Eastern Cape that the first complaints originated. The DMR has played a leading role in responding to these developments (in concert with departments of health and labour) and the committee wanted to make its own assessment of whether the efforts now being made are adequate.

 

The Committee while in Mthatha, had an engagement with the owners of the Ikhwezi Quarry, close by, in Libode, to assess the impact of corrective measures that were introduced in 2013 and 2014, at the instance of the Committee, to improve the relationship between a quarry and the local community. This issue was discussed in two committee meetings in the last two years, following an unsatisfactory site visit in February 2013, where community members and the local authorities (including traditional leadership) raised complaints about the behaviour of the owner of the quarry and the holder of a 30 year mining right.

 

Stone and sand are strategic minerals in the Eastern Cape, which lacks the mineral wealth of other Provinces. It is important that the mineral laws work to benefit both rights holders and local communities in the difficult situation where minerals do not have a high intrinsic value and where the funds available for social and labour plans and for Mining Charter implementation are very much less than in the case of metal and gemstone mines

 

2.         Background

 

A delegation of the Portfolio Committee on Mineral Resources (the Committee) visited KwaZulu Natal and Eastern Cape Provinces from 01 -06 February 2015.

 

The Committee visited Osizweni, Somkhele Mine in Hlabisa, Richards Bay Minerals, the Ex mine workers One stop service facility in Umtata and Ikhwezi Quarry. The Committee also had a meeting with Traditional Leaders in KSD on mining issues as they relate to communities.

 

3.         Composition of Delegation

 

  1. Parliamentary Delegation

 

The delegation was composed of the Chairperson of the Committee as the Leader of the delegation, Mr S Luzipo (ANC), Nkosi ZMD Mandela (ANC), Kgoshi M Matlala (ANC), Ms MV Mafolo (ANC), Mr I M Pikinini (ANC), Mr S Jafta (AIC).

 

Accompanying the committee was the Committee Secretary Miss A Boss, Content Advisor, Mr N Kweyama, Committee Researcher Dr M Nicol, Communication Officer, Mr C Mboyase and Committee Assistant, Mr M Zibeko.

 

4.         Meeting with the Department of Mineral Resources, COGTA, School Governing Body (SGB), Mining Trust Ward Councillor and the Mayor on Osizweni illegal mining Rehabilitation Programme

 

4.1          Background

 

The informal clay & coal mining at Blaauwbosch in Osizweni (Newcastle, KZN Province) is reported to have been carried on over a period of some 30 years. To date an area of approximately 17.3 ha has been disturbed by illegal mining. The disturbed area is inclusive of mining works underneath the Mzamo High School and some homesteads. This illegal mining activity puts the lives of learners and educators at risk, because of the danger that part of the school may fall into the pit. It has been confirmed by the Mine Health and Safety Inspectorate of the Department of Mineral Resources (DMR) that increased risks of subsidence and spontaneous combustion were visible, leading to heightened threats to the health and safety of learners and the teachers which can no longer be ignored.

 

The DMR has initiated consultation and engagement with relevant stakeholders such as KwaZulu-Natal’s Department of Co-operative Governance and Traditional Affairs, Department of Human Settlement, Department of Economic Development (DED), Department of Education (DoE) and other government departments to seek endorsement and urgent participation of relevant government departments to collaborate to eliminate the dangers and environmental challenges. There are four aspects to the Osizweni Rehabilitation Project;

 

  1. Relocation of the illegal miners to a nearby site where a formal brick manufacturing factory could be established;
  2. Relocation of the Mzamo High School to a new school building (only partially constructed);
  3. Relocation of affected houses; and
  4. Rehabilitation of the pit, once relocation of the miners and the school have taken place.

 

FORMAL BRICK MANUFACTURING FACTORY

The DMR has co-ordinated assistance to small-scale miners who are producing bricks informally at Osizweni Township. A legal entity, Intuthuko-Blaaubosch Community Trust, was registered for the informal miners and Corobrik was brought on board as a technical partner. The role of Corobrik was to manage the project and transfer skills to the miners. As a result, Intuthuko-Blaaubosch Community Trust and Corobrik established and registered a company.

 

However Corobrik pulled out of the project. On 5 August 2013 the brick making factory project was placed on hold because it emerged that there was no technical partner to replace Corobrik.

 

The brick making project was resuscitated in November 2014.

CONSTRUCTION OF THE NEW MZAMO SCHOOL PREMISES

Seven mining companies pledged to contribute towards the construction of the new Mzamo High School. Nonetheless, companies did not contribute as pledged and therefore the project was placed on hold, after R6-million had been spent with a local contractor. There is a dispute pending because the initial contractor objected when the Provincial government appointed another contractor to complete the work.

RELOCATION OF AFFECTED HOUSES

The Department of Human Settlement (DHS) conducted an investigation of houses that are affected by Osizweni illegal mining activities and this indicated that about 85 houses are affected by the plan for the rehabilitation of the area.

 

PIT REHABILITATION

The DMR has commissioned Mintek to rehabilitate the area. Mintek reviewed the initial pit rehabilitation designs that included complete backfilling of the pit with imported material as well as sealing of the floor base with low permeable material to eliminate any possibility of acid mine drainage generation. Mintek’s conceptual designs indicated that the most effective and economical rehabilitation methodology will be to:

  • Flatten high walls to mitigate the risk of slip failure;
  • Stabilize the steep wall adjacent to the school with rocks to allow the school to be salvaged; and
  • Level the pit floor to allow free drainage.

However subsequent investigations have revealed that illegal mining along the high wall face (adjacent to the school) has continued considerably after conceptual designs have been concluded, to the extent that crests of the corridor now show tension checks. The investigation recommended that the school be demolished and the adjacent high wall be flattened.

 

The new design will support the post land use for housing development and ensure that illegal mining activity will not again take place in future.

 

To date the following progress has been achieved:

  • Project plan has been developed;
  • Topographical survey and geotechnical investigation has been completed and the results are being finalized; and
  • Detailed design work was in process and a tender to rehabilitate the pit was expected to be ready by end of March 2015. Implementation, however, depended upon the prior relocation of the illegal miners and the school. Mintek is therefore still waiting for these steps to be taken in hand.

4.2 Way Forward

  • The DMR indicated that they would  continue with the brick making project and develop an action plan by end of March 2015
  • The Mzamo High School project to be completed by end of August 2015.
  • The affected 85 houses to be relocated by end of September 2015.
  • Pit rehabilitation tender to be ready for advertisement from the end of March 2015
  • Site establishment for Pit rehabilitation to be completed by end of September 2015.
  • Pit rehabilitation construction work to commence by end of September 2015 and be completed within two years

5.         Visit at Blaawbosch

 

The Committee was taken to Blaawbosch location where the Mzamo School was situated. The Committee was welcomed by the Principal of the School and was taken around the classrooms. The Principal indicated to the Committee that the illegal mining happening at the back of the school has made cracks in the classroom block. He told the Committee that illegal miners now have built a tunnel underground which passes from one side of the school to the other.

 

The lives of the teachers and the learners were put in danger. The smoke they inhale from the coal fired brick making kilns at times makes it difficult to concentrate in classes.

 

6.         Meeting with Somkhele Colliery

 

6.1        Background

Somkhele Mine is South Africa’s largest producer of metallurgical anthracite. Operating in Hlabisa under the Magisterial District of Mtubatuba, it is the only colliery that has opened in the Mtubatuba area and it started its operations around 2005. They have two mining rights held under Tendele Coal (Pty) Ltd, a new mining right issued on the 22nd June 2007 and a mining right conversion issued on the 30 March 2011.

 

The Department has, from the time mining operations commenced, received complaints from community members residing in and around the mine. The complaints were relating to the relocation process that the mine embarked on when the operation commenced. Members of the communities complained that they had not been properly and adequately consulted.

 

It appeared as if initially when the operation started, community leaders and committees nominated by the communities had agreed on compensation packages and the manner of relocation without getting consent from the community, more specifically the directly affected households. This led to unequal compensation granted by the mine and to community unrest.

 

During 2012 the mine needed to expand its operations and engaged again on a second wave of relocation. The DMR imposed stricter requirements as guiding principles for the relocation process. The DMR required that the process must involve consultation with the directly affected households apart from the engagements with the community leaders and their committees.

 

The process led to a successful negotiation and better compensation packages were accepted by some of the community members. There was a committee called Directly Affected Community (DAC) set up to be a liaison and mouth piece for the affected households. It was a mediator between the traditional leadership, the mine management and other community members having interest in the matter.

 

The community raised the following issues:

  • The relocation process should be stopped until agreements have been finalised with all the members of the community;
  • There has not been proper consultation and agreement was not reached regarding the relocation programme/plan (consultation was done but agreement was not reached);
  • It was alleged that it was not clear as to what plans were in place to ensure restoration of their livelihoods, especially to those that are into livestock farming; and
  • Some members of the community were unhappy that the mine was offering less value for their properties compared to what they felt their properties were worth.

 

The DMR ordered the mine to cease all pending relocation activities until the following was applied:

  • Census was undertaken;
  • An aerial photograph was taken to identify the affected communities and households; and
  • Meetings with the community and its leadership was undertaken to discuss issues of concern. The above has been addressed and the community has been relocated in terms of their agreements with the mine.

 

The Social and Labour Plan (SLP) for mine provides for the implementation of projects that were agreed by the community and a budget of R32, 044,000.  The SLP is being reviewed.

 

The mine is also contributing funds to the Mpukunyoni Development Trust (MDT), which such funds are aimed at supplementing the development projects provided as part of the SLP. It was indicated that there seems to be challenges relating to governance of the trust.

 

6.2        Review of previous Portfolio Committee Visit

 

Ms Lebo Mogotsi, the Deputy Chairperson of Petmin, the owners of Somkhele mine gave a snapshot of interactions with the previous committee on 31 July 2012.  The key issues discussed then were related to compliance with the Mining Charter. This covered the relationship with DMR and the community, BEE ownership, health and safety, housing and living conditions, employment equity, Social Labour Plans (including procurement, HRD and community development and job creation), environment and beneficiation.

 

At that time, BEE compliance was at the holding company level, with 28% of Petmin owned by HDSAs (the present level was 26 per cent). Now an additional community stake in the mining operation had been put in place. The local community had a 30 per cent stake in the Joint Venture mining contractor – who does most of the actual mining work and employs most of the people on the mine. In addition to this, a goal had been set for a landmark BBBEE deal that would see the workers and local community owing 20% of the Tendele mine. This was under negotiation with the traditional council representing the 175,000-strong Mpukunyoni community, as well as with trade unions representing Tendele employees.

 

The Committee was encouraged by the positive relationship that existed with the Traditional Council which had sent a representative to the meeting. They were however concerned to hear that a dispute with the Regional Office of the DMR had delayed a decision on Somkhele’s application to expand its mining operations. Somkhele seemed unclear of what the problem was that the DMR was raising. The Chairperson said that as mining is a long term activity, a mining company needs certainty on what they must do in order to secure the rights to continue mining the deposit. He requested that the DMR meet with Somkhele to make it very clear what their requirements were so that mining can continue to be an employer in the area and an influence for development of the people.

 

The Committee was interested to hear that Somkhele, in addition to its BEE and Social and Labour Plan contributions, its taxes and royalties, was also paying amounts to the Ingonyama Trust Board (ITB) – which stands as the owner of the land. It is unclear what happens to the money paid to the ITB and how it is accounted for.

 

7.         Meeting with Richards Bay Minerals

 

7.1        Background

 

Mr Mpho Mothoa, Managing Director welcomed the delegation and visit to the mine and introduced his team. He handed over to Ms Fundi Dlamini who gave presentation and led the discussions.

 

Richards Bay Minerals (RBM) is one of the two operations in the KZN region that is mining heavy mineral sands. The mine is situated in the Northern part of KwaZulu-Natal and is currently affecting 2 communities of Mbonambi and Sokhulu through their Tisand (Pty) Ltd operations. The future extension of the mine will be towards the Dube and the Mkhwanazi communities in the Zululand Titanium Operations.

 

RBM has a trading name for two registered companies, Richards Bay Mining (Pty) Ltd and Richards Bay Titanium (Pty) Ltd. It has been the largest mineral sands producing and beneficiation company in South Africa since 1976, and is presently owned by Rio Tinto, one of the largest mining companies in the world. The products that are mined are titanium dioxide feedstock, high grade pig iron, Rutile and Zircon. RBM produces 1.9 million tons of product annually which is used in the manufacture of a wide array of products essential to our modern lifestyle. RBM provided jobs to approximately 2 300 permanent employees and 2 000 contractors.

 

RBM has contributed +/- R200 million for implementation of SLP projects, of which half of them have already been implemented in 2014 (2 new clinics, new tarred road in Sokhulu and KwaMbonambi). However, there has been over the years repeated conflict between mine management, employees and the community over the implementation of the SLP.  There has, unfortunately, also been a lot of competition over the succession to chiefly titles in both of the areas in which RBM operates. In the one area there was longstanding infighting between brothers, dating back to 2005. In the other, the INkosi was actually assassinated, although the reasons for this are unknown. The absence of stable leadership in the communities has been negative for the company as it interferes with an orderly and cooperative relationship. Trickle dividends are paid into community trusts – exceeding R100-m in the last five years. 10% of this amount was a direct payment to the INkosi. There remains a problems with trustees’ infighting and RBM believes there is a need to settle the leadership issues in order for more progress to be made.

 

 

7.2        RBM Shareholding

 

Ms Fundi Dlamini presented the status quo in shareholding from 1976 until 2015. She indicated that the BBBEE transaction was concluded in 2009. In 2012, Rio Tinto acquired BHP Billiton’s 37 % interest for $1.7 billion. This investment was the single biggest Foreign Direct Investment in that year and made up one third of the country’s total FDI in that year. Significant facilitation of the BEE stake was made by the shareholders in very difficult financial market conditions. Involvement of communities and employees has been a feature from the outset of the transaction. RBM made a significant upfront cash injection of R17.5 million for each community to kick-start their developmental needs.

 

7.3        RBM Impact

 

RBM supplies 14% of the world’s titanium dioxide requirements. Directly and indirectly RBM accounted for payments of US$713 million to the fiscus, representing 0.83% of total South African government revenue and 3.5% of the Gross Geographic Product in KwaZulu Natal. As a major tax payer and employer in KwaZulu Natal, RBM also believes that it has the best structured empowerment deal in the mining industry.

 

The company needs a water use licence for the southern operations as a matter of urgency. It also needs certainty on whether its mining right applications have been successful, because it will fail to raise the necessary investment in time from Rio Tinto unless its application is granted by the DMR. The Chairperson asked the DMR Regional Manager to attend to this issue and resolve the problems that were delaying the decision. This had important employment and income consequences for the region. The DMR should be clear on what its requirements are so RBM can make its decisions in a timely manner on whether it is able to proceed with the proposed expansion or not.

 

 

 

 

7.4        Mining Plant tour

 

The Committee was taken on a mining plant tour, to the mining pond Charlie stockpile and on an impressive dune restoration and rehabilitation tour. The area where the Committee was shown was mined 20 years before and at the time the Committee visited it was rehabilitated as a forest. The strategy used by RBM was very impressive and the hope is that other mining companies could learn from it. 

 

8.         Visit at the One stop service facility for ex-mine workers

 

Ms N Makwedini, CEO at the Nelson Mandela Academic Hospital welcomed the delegation and gave an opportunity for everyone to introduce themselves. The Chairperson outlined the purpose of the visit.

 

Dr Barry Kistnasamy, Compensation Commissioner explained context of compensation and services for ex-mine workers and the way their needs for medical care intersected with medical benefit examinations and payments from compensation, retirement and benefit funds. The multiple policy and legal frameworks covering occupational diseases, occupational injuries, compensation and other social protection benefits make it desirable to offer a range of services (involving several departments and entities) at decentralised facilities that are more accessible. The compensation and benefit systems have to deal with migrant/contract labour within South Africa and across borders. The legacy of the past has resulted in fragmented or non-existed services for workers/ex-workers.

 

Dr Kistnasamy outlined the legal contestations over worker compensation from 2003 – 2013. The Cape PLC Asbestos settlement in 2003 provided for a trust to be set up to compensate workers harmed by exposure to asbestos. Mr Thembekile Mankayi won a Constitutional Court judgement against AngloGold Ashanti in 2011. This will now allow class action suits by mineworkers afflicted with lung diseases because of their work on the mines to argue in court for more compensation. The Chamber of Mines lost its court case against the Compensation Commissioner and the Department of Health in 2012. This will allow the Commissioner to increase the value of levies payable by mines which expose mine-workers to silica dust. Anglo American agreed to an out-of-court silicosis claims settlement in 2013.

 

He reported the database of mines and quarries as per the 2010 database from DMR. There are 249 controlled works and mines. With regards to migrant mine workers in South Africa, in 1995, 58% of mineworkers were non-SA migrants and in 2010, 34% of migrant mine workers were not South Africans.

 

8.1        Challenges.

 

Dr Kitsanamy reported that one of the challenges was providing transport for ex-mine workers who often live in the rural areas, far from Mthatha.  TEBA was not coming upfront to provide the data needed for ex mine workers to substantiate their claims. In many cases no record of service can be found and TEBA wants to be paid before releasing the records of ex-mine workers.

The small structure of the centre is not adequate. They need the assistance of the Portfolio Committee to outsource the fund to extend the facility. The issue of the business plan was reported as one of the challenges. Costs have to be absorbed by the hospital. He would like the business plan to go through and support the services. The one stop service centres are linked to the development agenda for the country and also to the Presidential initiatives around distressed mining towns.

 

8.2        One stop quarterly reports

 

Ms Nobantu Gongxoza presented the quarterly reports for 2014-2015. The One stop Service is within the Nelson Mandela Academic Hospital premises which is situated in Mthatha. The Hospital is a 528 bed hospital which renders tertiary services. The hospital is attached to Walter Sisulu University (i.e. medical school) and Lilitha College of Nursing. Nelson Mandela Academic Hospital which is in the Eastern part of the Eastern Cape serves about 2.6 million people according to the drainage area with Districts of Oliver Tambo, Alfred Nzo, Amathole, Chris Hani and Joe Gqabi districts which are mainly rural and some peri-urban areas with the economic hub at Mthatha.

 

The Deputy Minister of Mineral Resources, Mr Godfrey Oliphant, was to convene a task team from different Departments and other parties (TEBA, The Chamber of Mines, IEC, Home Affairs etc) to track and trace ex-miners and ensure their payment.  The one stop centre operates from 06:45 – 16:00 from Monday until Friday and there are three full time occupational health doctors. The headcount currently ranges between 25 – 30 daily and the centre undertakes medical assessments and deals with occupational injuries.

 

The available services are clinical examination which are diagnostic tests (lung function; hearing test; X-rays laboratory tests etc) health promotion (blood pressure screening); HIV counselling and TB Screening and testing. Rehabilitation assessments and interventions such as assistive devices; treatment, care and support depending on the disease or injury are provided to the ex-mineworkers.

 

Information is collected on compensable diseases and injuries and sent to the Medical Bureau for Occupational Diseases (MBOD) in Gauteng for assessment. This includes recent X-RAY report, recent results – sputa or blood and recent Doctor’s reports. (But MBOD is very slow to respond!)

 

8.3        One stop Statistics

 

Ms Gongxoza outlined the achievements of the one stop service centre. She said a meeting with National Offices and leadership of Ex mine workers on 15 October 2014 and 11 December 2014 was seen as one of the achievements. The second achievement was the renewal of work contracts for the two clerks on contract for another three months.

 

She indicated that the challenges were as follows:

  •  Infrastructure- building not adequate for current staff and increasing demand;
  • Slow procurement process on acquisition of canvas to cover the open waiting area;
  • Inconsistent processing of X-rays print outs is a problem. Some days they do not get them;
  • No feedback has been received yet from the files submitted to MBOD since the one stop centre started, 9 months before. The MBOD is responsible for interpreting the medical evidence and deciding whether a case can be compensated and at what level. No explanation had been provided by the MBOD on why responses are delayed;
  • HR resources- staff shortage; and
  • Payment of Service records for ex miners by TEBA. TEBA requires the pre-payment of a R90 administration fee before it will search for and provide the employment records that are needed to establish that a person with a lung disease worked in the mining sector

 

Ms Gongxoza concluded by presenting the action plan to the challenges faced.  With regards to uncovered waiting places, she indicated that potential suppliers had been briefed on the requirements and they are waiting for the quotes. They are fast tracking the process and the target date is 03 March 2015. With regards to non-availability of service records, ex miners do not have money to pay for their medical history records from TEBA, she has engaged the NDOH and partners in an effort to resolve the problem including Anglo Gold. No explanation was given as to why there has been no feedback from MBOD on the claims submitted by the One Stop Service Centre for assessment. She has engaged the MBOD office and the target month for a response was March 2015.

 

9.         Meeting with Ikhwezi Quarry

 

Ms M Siwahla, the owner of Ikhwezi Quarry welcomed the delegation and apologised for the delay. The meeting was attended by the Chief of Umdlankomo and his trust members and the Councillor of Nyandeni local Municipality

 

The Councillor tendered an apology for the Mayor as she had another engagement in East London.

 

Ms Siwahla gave a background about Ikhwezi Quarry. She said a mining right was issued on 22 March 2007, however, due to start up challenges, the company only commenced its operation in August 2009.  The report provided annual compliance achievements for the period 22 March 2013 – 21 March 2014. The company is operating at a small scale with a total of 31 employees inclusive of contractor employees, however, during the reporting period, only 15 employees were on the mine.

 

With regards to human resource development programme, for the period from March 2013 -2014, twelve learners had been trained by the Department of Education and certification will be provided upon completion of the programme towards end of year 2014. The Company has agreed that employees attend classes four days in a week for two hours per session. For about two days a week they finish work two hours early with the purpose of attending classes. The Company has converted some office into classrooms and equipment for training purposes, stationery has been provided by the Company for all learners.

 

A total of six employees have been provided with core business training during the year 2013. The Heister operators that have been trained are still awaiting for accreditation which was anticipated to be received by August 2014. A total of R34 500 has been spent of core business training.

 

With regards to procurement details, it was reported that the company has a 5 year contract with Qumbu Build it, a local company with 30% black equity.

 

With regards to employment equity she reported that Ikwezi Quarries is 100 % BEE company and had a staff compliment of 15 employees during the reporting period. However, the current human capital has increased to 31 employees, inclusive of contractors. All the positions are black dominated with only one white male in the senior management. The company has created more jobs and recruitment has been done from the local community. She indicated that there is a challenge of employing more women. 

 

9.1        Mine Community Development Project

 

Ms Siwahla indicated that an SMME project was and identified and implemented by the Ikhwezi Quarry Cc. This followed the community needs analysis conducted in consultation with Nyandeni Local Municipality, Department of Mineral Resources, Ward Councillor Authority and its committee, Mdlawesizwe Co-operative and the broader community members. A poultry farming project was identified for assistance and implementation. The company has since constructed the poultry house and provided implements for the project. The project beneficiaries have been trained and the project has commenced. To date, the project beneficiaries have sold their produce to the local market and made profits which proves the sustainability of the project. Project beneficiaries were trained by Amazing Agric Supplies, an accredited service provider and certification was provided to all trained members. The company has supplied the project with 1000 poultry and feed for the first phase of farming.

 

An access road to the project site was also constructed to ensure easy access to all. A need to provide clean drinking water for the community was also identified and the company undertook to construct a borehole that will be accessible to the broader community. A tank and washing line was also provided. All these projects cost R302 966.72 in total.

 

9.2        Bursary Plan

 

Ms Siwahla indicated that during the reporting period there had not been bursars since the last pool (2 bursars) completed their studies in December 2012. There was a bursary candidate identified in January 2013, however it was later realised that the candidate had received another bursary and the candidate withdrew the application. Consultation with local authority was under way to identify other candidates. She admitted that the company hasn’t done well in issuing bursaries and promised to improve in the current year.

 

She concluded that all elements of the Social and Labour Plan as prescribed have been implemented. The company also donated R1000 food parcels to families identified by the Traditional Authority in Mdlankomo. The company will submit a second SLP document with new targets considering that the initial commitments have been implemented to date. 

 

10.        Meeting with Traditional Leader in KSD

 

The Committee had an engagement with the Traditional Leaders in KSD in the Mthatha town hall. The Chairperson, Chief Mtirara welcomed the delegation from Parliament and asked his delegation to introduce themselves as each person raised their concerns and questions because the delegation was too big to introduce individually.  The Chairperson of the Committee requested Chief Mandela to outline the purpose of the visit which was to engage traditional leaders on issues related to mining. He indicated that the reason for these engagement is to make sense of the issues that traditional leaders are facing in mining.

 

The discussion between the Traditional Leaders and the Committee included:

 

  • The Eastern Cape was seen as the labour sending Province for workers on the mines, meanwhile is the poorest Province;
  • Sand mining in the province is not co-ordinated;
  • Traditional Leaders should beware of shareholding with mining companies because when the company becomes indebted it means the community also is affected;
  • Traditional leaders felt that most of ex-mine workers are from the Eastern Cape but do not get any assistance from politicians and appealed the Committee to intervene. The issue of the one stop being located in Mthatha seemed to be a problem as most of the ex-mineworkers come from rural areas of Eastern Cape and they cannot afford to travel to Mthatha for the medical benefit examinations, even if these are free;
  • Traditional leaders wanted to know from the Committee what they should do to protect their land from the mining operating companies who intrude in their land;
  • 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;
  • They wanted to know how precious stones could be tested to see the viability of mining for the benefit of the people;
  • There was a proposal that when the Portfolio Committee visits the Province again, it should be accompanied by the Provincial Committee as most of the issues raised needed the attention of the Provincial Government;
  • There was a concern about mining licences. The traditional leaders indicated that when someone raises issues, the Department of Mineral resources will indicate that the land that belongs to traditional leaders is just the surface. What is then underneath belongs to Government. It was also mentioned that there was an environment official who promised to assist for environmental issues but the person just disappeared;
  • There is a big concern on the level of benefit the communities get from mining;
  • The issue of mining companies interacting directly with communities creates huge problems as it divides the communities. In an area where there is a traditional leader, the mining companies should liaise with traditional leaders;
  • It was stressed that Traditional Leaders should not allow people to take sand from their land without a licence and it was suggested that they should apply for mining licences in that area and the sand mine be owned by that community; and
  • The Mining Indaba was proposed to be held in Eastern Cape, particularly in OR Tambo District because of the fact that most labourers are from that area.

 

11.        Findings

 

The Committee observed the following:

 

Osizweni

  • Mintek and the DMR cannot rehabilitate this hazardous area because the school needs to be relocated and this is the responsibility of the Provincial Government.
  • The brick factory which was promised by the DMR needs to be put in place so that the illegal miners can be relocated away from the Osizweni pit. Until the illegal miners have somewhere else to go, they will stay because they earn income from the bricks and from the coal. This also delays the rehabilitation of the area, which Mintek has planned.
  • The biggest challenge is the slow pace of developments and the way in which commitments are made, but are then are not honoured on all sides. There is a need for political leadership to make the decisions to correct the present situation.
  • The Committee observed that the Mzamo school was already depleted even before the mining made some classroom blocks unsafe.
  • There is no proper co-ordination between DMR, Cogta and the Department of Basic Education. This extends to the Provincial government which is responsible for education and housing issues at the local level.
  • The contract for building the new school was not handled properly. This led the contractor to abandon the site when the new school was only 23 per cent complete. Now there is a legal dispute that has prevented a new contractor from completing the construction.
  • The lives of the teachers and the learners are put in danger. The smoke they inhale at times makes it difficult to concentrate in classes.

 

Somkhele Colliery

  • The information provided by the mine and by the department was contradictory.
  • There seemed to be a dispute between DMR and Somkhele regarding Charter compliance.  The Chairman of the Portfolio Committee advised both parties to discuss targets and ensure there was mutual understanding of stated targets.
  • It was concerning that HDSA ownership of Petmin has declined from 28% to 26% between 2013 and 2015. Mining companies should see the 26% target in the Mining Charter as a minimum, but many regard it as a ceiling.

 

 

RBM

  • The strategy used by RBM for continual environmental rehabilitation of the dunes after mining was very impressive and the PC hopes that other mining companies could learn from this approach. Mined land is rehabilitated so that it can revert to other uses after mining is finished.
  • The leadership disputes in the traditional communities are a matter of concern. It seems that divisions are created by mining, particularly when 10% of trust dividends go directly to the INkosi.
  • With respect to both Somkhele and RBM there is a lack of clarity over accountability for the royalties and other considerations that are paid by the mines to the Ingonyama Trust Board (ITB), as the custodian of the land. In terms of Section 11 of the MPRDA, these payments must be used for social upliftment and must be accounted for and audited on an annual basis. Neither mine was able to explain what these payments were in fact used for by the ITB.

 

One stop centre

 

  • The Committee was impressed with the appearance, cleanliness and good order of the hospital where the one stop service centre for ex-mineworkers is located
  • Good co-ordination in Government could assist the process, for example there is a need to work together with the PC on Health in order to fast-track the compensation claims submitted by ex-mine workers to the Compensation Fund.
  • The lack of response by the MBOD to the claims submitted to them for assessment over a nine month period is of extreme concern. This undermines the motivation for the one stop service centres, which is not just to “process” ex-miners, but to provide a sure way for them to access the compensation that is their right under the law.
  • The structure is not adequately capacitated, given the numbers of ex-miners who are reported to be owed compensation. There is clearly a need for decentralised services for ex-miners in other parts of the Province and indeed across the region.
  • It is difficult for DMR to sort out issues efficiently as the Regional Office is located in PE while most mines – and mining labour sending areas - are located in the other part of the Eastern Cape.
  • The issue of Chamber of Mines needs to be looked at because it seems they have made little contribution in assisting the ex-mine workers, in comparison with the responsibility they have for careless recruitment and inadequate record-keeping practices in the past..
  • The Committee was not impressed with what TEBA is doing and appealed to
    them to honour the commitment they made publicly at the 2014 Mining Health and Safety Summit to waive the service charge for providing ex-mineworkers with their service records. Mineworkers are barred from compensation unless they can prove they served on the mines. TEBA owns these records. TEBA was formerly part of the Chamber of Mines, but they sold it in 2005 and TEBA was re-formed as a commercial black empowered entity, TEBA Limited.

 

Ikhwezi Quarry

  • The workshop conducted by the Department, as agreed at the 14 August 2013 meeting with the Portfolio Committee in Parliament, has assisted in improving the relations between the community, the municipality, the traditional leadership and the mine.
  • There is still lot more to be done to accelerate the community issues, but the Committee noted with appreciation the constructive and improved attitude of the owner of Ikhwezi and the efforts she had made to consult with the community and work co-operatively with community leaders.

 

12.        Recommendations by the Committee

 

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

  • There is a need for political leadership to make the decisions to correct the present hazardous situation at Osizweni. The Provincial Government of KwaZulu-Natal is the key player here, while relying on the active assistance of the DMR and other national departments.  The need is to complete the construction of the new school, to relocate the affected households and to transfer qualifying small scale miners to the new brick factory site. These steps are required before Mintek can proceed with the tender for the closure and rehabilitation of the pit.
    • The DMR should report back to the Committee by 23 September 2015 on the status of the issues listed under point 4.2, above.
    • This report should include an indication of the funding flows for the relocation of the illegal miners, the establishment of the brick making product and the operation of the new small scale mine.
  • The Department of Mineral Resources should find a way of improving the effectiveness of the Regional Office in the Eastern Cape, which is located in PE while most mines – and mining labour sending areas - are located in other parts of the Eastern Cape.
  • Traditional Leaders should be better informed by the DMR on the requirement that people need to have permits to take sand and stones from their land. The DMR should inform the PC by October 2015 on the action plans it has in place to empower traditional leaders and communities in this regard. This should include a timetable of how the road show programme to educate communities on their rights will be rolled out over the 2016/17 financial year. People who are awarded government construction tenders leave holes from their excavations and do not rehabilitate the areas. This can be a hazard and create environmental problems such as erosion. There are laws in place to prevent this abuse, but people need to know about them.
  •  
  • The Chamber of Mines should report to the Committee on what they are putting in place for ex-mine workers and how ex-mineworkers fit into the Chamber’s vision for a truly transformed mining industry.
  • The DMR and Somkhele Colliery need to resolve the apparent dispute over the interpretation of the Mining Charter to ensure there is mutual understanding of stated targets.
  • The DMR needs to clarify its expectations regarding the application Somkhele has made to expand their operations. Mining operations need long term certainty if they are to operate without costly interruptions. This is needed also to optimise employment and the benefits from the mining operation for the national and provincial economy. The PC would like to be informed of what projects the DMR has approved that demonstrate compliance with the SLP.
  • All mines should follow the strategy used by RBM for continual environmental rehabilitation so that mined land is rehabilitated so that it can revert to other uses after mining is finished.
  • The DMR and the Ingonyama Trust Board (ITB) should be invited to present to the Portfolio Committee on how they implement Section 11 of the MPRDA. This requires that royalties and other payments made in terms of this provision must be used for social upliftment and must be accounted for and audited on an annual basis. (The ITB accounts to Parliament for the bulk of its activities through the PC on Rural Development and Land Reform. It is appropriate that a specific report is made to the PC on Mineral Resources, given that the ITB receives funds from mining operations as specified in the MPRDA)
  • The DMR should attend to the need of RBM for a speedy decision on their applications for permissions needed to expand their operations to the south. Mining investment decisions are made during defined ‘window periods’, particularly when the mine is foreign owned and is competing with other international projects for company funding.
  • The One Stop Service Centres should report not just on the number of ex-mineworkers they have seen and treated, but on the numbers and proportions of workers who actually receive payments as a result of the work of the Centre.
  • The One Stop Service facilities in decentralised locations are a welcome innovation but the business/operational model of the demonstration sites needs to be perfected before wider roll-out is planned.
  • The ex-mineworkers from remote rural areas should be assisted with travel allowances to attend the One Stop Service Centres for the free medical benefit examinations they are entitled to every two years.
  • The MBOD should account urgently for its failure to respond to documentation and samples submitted to them for assessment by the One Stop Service Centre in Mthatha over the period April 2014 to February 2015.
  • TEBA should honour the commitment they made publicly at the 2014 Mining Health and Safety Summit to waive the service charge for providing ex-mineworkers with their service records.
  • The Portfolio Committee recommends that the DMR should use the same workshop approach that showed such positive results at Ikhwezi Quarry to assist other mines to consult better with communities and improve the relations between the community, the municipality, the traditional leadership and the mine.

 

 

Report to be considered.

 

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