ATC160301: Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Mpumalanga Province, on the 21-24 July 2015, dated 3 February 2016

Mineral Resources and Energy

Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Mpumalanga Province, on the 21-24 July 2015, dated 3 February 2016

 

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

 

1.         Introduction

 

A delegation of the Portfolio Committee on Mineral Resources (the Committee) visited Mpumalanga Province from 21 -24 July 2015. The objective of the oversight visit was to understand the extent and nature of the environmental impacts that the DMR has to regulate in Mpumalanga.

 

2.         Background

 

The Committee visited Pan African Resources which is a majority shareholder of Barberton mines. The Committee also visited Exarro’s Glisa Colliery near Belfast, where mining is taking place very close to human settlements. Unlike the illegal mining site which the Committee visited in Osizweni at the beginning of the year, the mining operation in Barberton is operating legally. Exxaro Resources Limited (Exxaro) has the best empowerment credentials of all coal mines in South Africa. Exxaro is both a supplier to Eskom and an exporter.

 

The other purpose of the oversight was to visit an illegal gold mining site near Barberton, particularly concentrating on the challenges experienced by the operators of Fairview, Sheba and the New Consort Gold Mine with regard to illegal activities taking place and how the issue is being addressed.

 

The Committee also  visited the memorial site of the 177 mineworkers killed in the Kinross disaster in 1986 and a site of about 1 000 unnamed graves of mineworkers at a run-down hostel structure on the Evander Gold Mine property, in Mpumalanga. The Evander Gold Mine properties (Winkelhaak, Kinross, Leslie and Bracken) were purchased from Harmony Gold in 2013 by Pan African Resources plc (a gold mining company) where 26% of the shares are held by BEE Company Shanduka. The Committee also had a meeting with Traditional Leaders in Mpumalanga on mining issues as they relate to communities.

 

The visit comprised of an orientation briefing by the MEC of Economic Development and Tourism,  Regional Manager of Department of Mineral Resources, a tour to the mines including the mine’s Operations, social projects and meeting with the Traditional Leaders in the Mpumalanga Province.

 

 

3.         Composition of Delegation

 

1. Parliamentary Delegation

 

The delegation was led by the Chairperson of the Committee Mr S Luzipo as the Leader of the delegation

 

Name and Surname	Designation
Mr S Luzipo (ANC)	Chairperson
Inkosi ZMD Mandela (ANC)	Committee Member
Ms H V Nyambi (ANC),	Committee Member
Ms MV Mafolo (ANC)	Committee Member
Mr I A Pikinini (ANC)	Committee Member
Adv H C Schmidt (DA)	Committee Member
Mr J Lorimer (DA	Committee Member
Mr S Jafta (AIC)	Committee Member
Mr S Skhosana	Chair of Chairs (Mpumalanga Legislature)
Miss A Boss	Committee Secretary
Mr N Kweyama	Content Advisor,
Mr J Molafo	Communication Officer
Ms S Skhosana	Committee Assistant

 

3.2        Department of Mineral Resources

Name and Surname	Designation
Mr David Msiza	Chief Inspector of Mines
Mr MMA Zondi	Deputy Chief Inspector of Mines
Mr  EL Letsoko	Principal Inspector of Mines
Mr NA Tshivhandekano	Regional Manager
Mr KK Netshikweta	Senior Inspector of Mines
Mr AE Zide	Senior Inspector of Mines
Mr N Soya	Senior Inspector of Mines
Mr V Magagula	Parliamentary Liason Officer
Mr K Mhlongo	Assistant: Office of DG
Mr K Matrose	Assistant: Office of DG
Mr X Mankayi	Assistant Director: SLP
Ms SQ Radebe	Deputy Director: SLP
Mr ME Shabane	RMDEC Official

 

4.         Meeting with the MEC on Economic Development and Tourism

 

On 21 July 2015, The Portfolio Committee on Mineral Resources paid a courtesy Visit to the Office of the Premier Mr DD Mabuza. The MEC for Economic Development and Tourism represented the Premier as he could not attend. The MEC, Mr Kholwane welcomed the delegation and alluded to the recent press statements which stated that 60% of the arable land in Mpumalanga is going to be mined.

 

He proceeded to introduce his team. The Committee wanted the Premier to shed more light on the high intensity of mining and its impact on agriculture, water and environment. The Portfolio Committee also wanted to understand the approach of Department of Mineral Resources when deciding on issuing prospecting permits and mining rights as well as the Intergovernmental cooperation between DMR and the Provincial Departments on mining issues.

 

Mr Mbatha reported that mining in Mpumalanga is quite significant and continues to expand. He said the minerals produced in the Province include coal, gold, platinum group Metals, chromite. Mpumalanga accounts to 83% of South Africa’s coal production, of which, 90% is used for electricity generation and by the synthetic fuel industry. Coal Mining is concentrated in Nkangala District Municipality followed by Gert Sibande District Municipality. He informed the Committee that there are 12 Coal Fired Power Stations including Kusile which is currently under construction.  The Province is producing more than 220 million tons and exporting approximately 63 million tons. In terms of employment it was reported that +-5 500 people were employed.

 

Mr Mbatha indicated that approximately 80% of land surface area was affected by mining activities. Most of the granted mining licences are predominantly in the Nkangala and Gert Sibande District Municipalities and further minining applications remain high in all 3 District Municipalities. Basically prospecting applications are covering rest of the provincial land.

 

In terms of agriculture he noted that 46% of South Africa’s total high potential arable soils are found in Mpumalanga. Crops, vegetable an fruits produced mainly in Ehlanzeni includes Citrus, Subtropical Fruit, Nuts, Sugar, Vegetables .Gert Sibande and Nkangala produce predominantly Summer Grains, Deciduous  Fruit, Livestock, Vegetables.

 

He indicated that the level of mining is extremely high in the Province, particularly coal mining due to demand from Eskom, SASOL and overseas markets. Mining, particularly open cast mining is destroying high potential agricultural land, damaging the environment and polluting underground water. It was reported that mining is also competing with other land users such as human settlements in certain areas.

 

In response to the issues raised above, the Premier of Mpumalanga and the Minister of Mineral Resources hosted a Mining Lekgotla in Mpumalanga (2012) comprising of government, mining houses, labour and other social partners to discuss inter alia:

 

• Creative ways to promote coexistence of the agricultural industry and mining

    industry which happen to compete for the same geographical space

• Sustainable solutions to challenges posed by the negative impact of mining on

    underground water and the environment

• Other issues affecting communities residing adjacent to mining operations.

 

Mr Mbatha indicated that to ensure that these issues take effect the Social partners:

•  signed a pledge on clear areas of cooperation;
• Adopted an Action Plan with specific outputs, key activities, targets and

   Identified projects for immediate implementation

• Agreed on institutional arrangements to facilitate and monitor the implementation   of the Action plan

 

The Province also embarked on a process of signing MOUs with individual    companies to ensure implementation of the Action Plan (SASOL, South 32
 and ESKOM) and still negotiating with other major players.

 

Mr Mbatha alluded on the areas of cooperation which includes among other things:

 

• Human Capital Development which prioritised three key focus areas, one being

   increasing the skills base of the Province, prioritising artisan and agricultural

   skills.

• Urban renewal, prioritising rejuvenation of mining towns in the context of

   sustainable human settlement.

• Sustainable development and environment, focusing on mine rehabilitation for

 productive use of land which prioritise agricultural activities and water reclamation to purify underground water for community consumption.

 

Mr Mbatha mentioned some of the projects that were already underway from the selected areas of cooperation which are:

 

• Maths and Science Academy, with a main campus at Emalahleni  and satellites
      at  three districts;
• Skills Development Hub, mainly to train young people
• Water reclamation (Anglo American and South 32)
• Fly Ash beneficiation
• Rehabilitation of mining dumps for agricultural activities.

 

He alluded to the challenges inhibit quick implementation of the Action Plan which are:

•  Institutional arrangements put together to drive the implementation of the Action Plan not functioning optimally, particularly the working group level.
• The Inter-Governmental relations among the three spheres of government in creating a coherent approach to balance development within the energy complex was very weak and result in poor planning. 
• The coordination of departments involved in the energy complex remained a serious challenge – each department was sticking to its legal mandate irrespective of the overlaps applicable in the mining sector.

 

He concluded by recommending that a coherent national framework is needed to guide development within the energy complex area of work. The Inter-Governmental Relations among the three spheres of government need to be strengthened. There is a need of the outcome-based approach operation at institutional level (make implementation for an operational). There is a need to fast-track the process of legislating the bio-diversity framework.

 

The MEC for Economic Development and Tourism indicated that the mining companies speaks to the Provincial Government only when it suits them and do as they please and the Provincial Government cannot force companies to cooperate with them He felt that the prospective rights issued by the department of Mineral Resources, and the land they are supposed to mined could be better used for something else. He mentioned that there is a lot of conflict in Barberton for mining and tourism.  Legislatively the Province is weak in terms of issuing the licences, rather it is seen as a co-ordinating.

 

5.         Meeting with Department of Mineral Resources

 

Mr David Msiza, Chief Inspector of Mines led the delegation and introduced his team. Mr NA Tshivhandekano, Regional Manager gave presentation overview about mining in Mpumalanga. He reported that Coal, Gold, PGM, Nickel, Sand and Clay, Iron Ore are the prevalent commodities in the Province.  It has more Quattro allocations for RBCT more than any other regions. In addition the bulk of the thermal powers stations generating electricity are sited in Mpumalanga with the addition of Kusile power station. He reported that the Mining Forum has been established to deal with community issues relating to mining. He further indicated that the REMDEC Committee is fully functional to resolve objections lodged by interested and affected parties.

 

The Regional Manager reported that the first ever implemented UCG project in the country has been facilitated by Mpumalanga regions with ESKOM. They have planned a critical role in the 60 year expansion programme currently implemented by SASOL to ensure the supply of petrol chemical products in SA.  He said the regions has played critical role in terms of the Presidential infrastructure programme: Ermelo to Majuba railway link.

 

Mr Tshivhandekano outlined the status of the applications received as follows:

• Biggest region in terms of lodged application permits/rights
• Overall Total Applications = 10256
• Total application lodged NMPS = 5344
• Mining rights = 378
• Prospecting rights = 3998
• Mining permits = 968
• Total application lodged SAMRAD = 4912
• Mining rights = 113
• Prospecting rights = 3995
• Mining Permits = 804

 

He outlined the Implemented SLP projects as follows:

• A total estimate capital investment towards the implementations of SLP projects is in excess of (R3,332 Billion) and created 1447 jobs
• Water Treatment Plants for Anglo American that costed R1,7 billion, South 32 that costed R1,5 billion and Optimum coal at a cost of 600 million.
• Fire Station in Leandra Fire Station at a cost of R12 million
• Standerton Rooikopen Clinic at a cost of R26 million
• Sbongamandla Primary School at a cost of R18 million
• Ogies school (Glencore) at a cost of R21 million
• Badplaas Chiefs Pavilions at a cost of R1,5 million
• Road Construction in Badplaas at a cost of R3,6 million
• Health care centre in Secunda at a cost of R23 million
• Construction of 100 houses in Middelburg at a cost of R15 million.

 

He reported on the learnerships and bursaries awarded by different companies. He said 150 bursaries were awarded by HCI Coal, 62 bursaries awarded by Anglo American and 100 learnerships were awarded in diesel mechanics, electrical engineer, welding and fitters.

 

He reported the challenges as follows:

• Inadequate capacity and volume of applications in the regional office.
• Ensuring co-existence between mining, agriculture (maize triangle) and bio-diversity.
• Depressed commodity prices are affecting the implementation of the SLP’s eg. downscaling and retrenchments.
• Reluctance to embrace voluntary transformation initiative by the mines.
• Management of community expectations.
• Proper alignment of the IDPs with the SLPs.
• Numerous un-coordinated community forums.

 

Mr Elliot Letsoko, Chief Inspector of mines in Mpumalanga presented the health and safety performance review. He said there has been growth in the mining sector in the Mpumalanga province since the promulgation of the MPRDA. He reported that there are currently about 180 mines operating with a significant number of small mines. It was reported that Mpumalanga was the second biggest mining region in terms of employment with the coal sector being the major employer.

 

The table below present the number of employees per commodity

 

Commodity	No. of employees
Coal	68 869
Gold	7095
Platinum	2544
Other (Nickel, Quarries, Silica, Brickworks etc.)	6469
Total	84 977

 

It was reported that the major mining companies for coal are Anglo Thermal Coal, BHP Billiton/South 32, Exxaro, Glencore, Shanduka and Sasol and for gold are Pan African Resources, Sibanye Gold and Vantage Goldfields.

 

Mr Letsoko reported the challenges as follows:

 

• Inadequate risk assessments conducted by some of the mines.
• Poor fatigue management which leads to accidents
• Lack of health and safety management systems particularly in small mines.
• Inadequate contractor management
• More accidents under general and other classification e.g caught between, slip and fall, fell from heights, fall of material, material handling
• Linkage of occupational exposures and disease not done
• Illegal mining in Barberton and Evander areas.

 

Mr Letsoko outlined the corrective measures by the department with regards to health and safety, which are:

 

• Continue to monitor compliance and enforce legal provisions where necessary
• Encourage implementation of integrated HIV and TB programmes
• Ensure implementation of the fatigue management guideline.
• Ensure that adequate medical surveillance is conducted by the respective mines.
• Withdrawal of workers form working places with high occupational exposure levels.
• Tripartite Forums meetings held to discuss health and safety matter.

 

With regards to Illegal Mining, it was reported that the Mpumalanga Stakeholder Forums was implementing measures on key focus areas:

 

• Rehabilitation of derelict and ownerless mines
• Remove and process top soil where gold plants were situated.
• Strengthen access control and security measures at mines including the use of biometrics systems.
• Vetting of security personnel.
• Joint explosive audits conduct a mines by DMR and SAPs.
• Disruptive operations conducted by police including Department of Home Affairs officials.

 

 

Members raised the following questions:

 

• The Department has mentioned that there are 180 operating mines and they wanted to know how many inspectors the Department of Mineral Resources are available to conduct inspections and how often each of these mines are inspected.
• Response was required in compliance orders issued and what enforcement actions has been ordered.
• There was a concern that the presentation from DMR does not speak to the presentation from the Provincial Government presentation.
•  Applications 10256, how many people are dealing with these application and how many application from SAMRAD per month?
• On which basis were the applications dismissed.
•  Time frames for Kusile power stations. Studies commissioned and findings?
• 100 low cost housing by Shanduka. Who are the targeted people for these low houses, community or employees?
• Houses built by Exxarro. How many completed and outstanding and time frame for completion.
• Members were concerned about the reluctance of mining houses on transformation and wanted to know from DMR why are they keeping the licences
• Total fatalities on 2011, Major causes of these fatalities. What is the department doing to bring the figure down to zero fatalities?

 

The Department responded that with regards to capacity of Inspectors, the Department is experiencing challenges, as posts are advertised but the response is poor (either low turnout or unskilled people).  The methodology used to determine sites to be visited is the level of Risk (exposure of dust) and outcome. Government is in the process of revitalising mining towns especially Mpumalanga, Limpopo etc.

 

The Regional Manager indicated that there is a master inspection plan for the whole year. Access of 240 inspectors to conduct inspections, depending on environment, Issued more than 55 orders in terms of section 93.  In terms of rezoning, the department has no role to play

 

 6.        Meeting with Lafarge Mine

 

On 21 July 2015, the Committee conducted a site visit in Lafarge Nelspruit Quarry.  Mr P Bechoo, General Manager gave an overview of Nelspruit Quarry. He reported that the mine was granted the status of right in 2011 and the licence will expire 2041. That means the mine has a 30 life span. This mine has a granite commodity. The location of the quarry in situated in the remaining Extent of the Farm Kia Ora 139 JU, Nelspruit, Mpumalanga. It is located in Karino, approximately 10 kilometres to the east of Nelspruit. The mine has 34 employees.

 

In terms of market and competitors, it was reported that there were no major infrastructural development in the area, however the commodity is has steady demand from other areas, and furthermore the market is extremely competitive as there are other producers of the same commodity.

 

 

Summary of the Mining Charter Scorecard as presented:

 

2014	Yes/No	Comment
Ownership	Yes	26%
Procurement	Yes	Capital	Consumable	Services
		0	55%	8%
Employment Equity	Yes	HDSA		WIM
		64%		27%
Human Resource Dev	Yes
Accommodation	No	No Company accommodation
Community Development	Yes	Tsembaletfu Primary School Access to Water – Borehole at School
Health and Safety	Yes
Environment	Yes
Sample Analysis	Yes
Scorecard Yr 2012 -2014
2012	2013	2014
65,63%	65,63%	87,50%

 

The General Manager presented the LMSA Pty Ltd Ownership BBBEE Shareholding structure as follows:

 

• Motjoli Resources (Pty) Ltd owns 20%.
• Peotona owns 20%
• Broad-based Education Trust owns 53%
• Community Trust owns 7%.

 

With regards to Health and Safety statistics for 2014-2015, the quarry reported 0 fatalities, 0 Lost Time Injuries (LTI), 0 Medial cases, 0 Lost Time Injury Frequency Rate (LTIFR) and 0 Total Injury Frequency Rate (TIFR). He outlined the e safety initiatives as follows:

 

• Green area meeting on a daily basis for all staff
• Health and Safety Committee Meetings on a monthly basis
• Union representative attend H&S committee meetings, daily communication with Site Manager
• Co Workers Always Report Everything daily
•  Visible Felt Leadership (VFL) Per site visit (Managerial level)
• Site improvement plans reviewed quarterly
• ASPASA Health and Safety Audits at 93.7%
• Health and Safety Committee meetings on a monthly basis
• Peer Educator information sessions on a monthly basis
• Health Awareness Sessions on a weekly basis (drivers)
• Annual medical Screening (including TB) annually
• HIV&Aids testing and Counselling, that will be annual HCT Campaign
• ICAS & Lifeworks, 24/7  Availability
• Wellness Day Program on an annual basis.

 

He outlined the beneficiation and Job Creation Strategies as follows:

Beneficiation and SMME Development:

 

• In 2013, Nelspruit Quarry introduced a Bag Making Plant for market segment household users and bags were accepted in the market.
• Initially employed temps to run the project
• As part of SMME development recently the project was handed over to Shayina Makhulangedlela (Pty) Ltd.
• Assistance provided include: equipment, training and mentoring, product marketing and company registration

 

With regards to SLP, Local Economic Development (LED) Programmes the mine has upgraded and provided education facilities in local school. The mine had completed 3 additional classrooms at Tsembaletfu Primary School as children were being housed in a church and now they have their own classroom. The quarry has further upgraded the existing and provided new sporting facilities for school netball court. He indicated that the company is planning to renovate the cricket pitch in year 2015.

 

The Quarry has also supplied water to local schools by drilling of boreholes to address basis needs. These are Phaftwa High School, Mhlume High School, Tentelene Crèche, Sandzile Primary and Tsembaletfu Primary School.

He outlined the achievements on the Local Economic Development Programme as follows:

 

• Able to address basic need
• Learners have more time to concentrate on learning instead of disrupting their lessons to get water for the school
• Access to water has been able to improve the school’s nutrition program (there was no cooking if the water was not delivered by the municipality)
• Garden Projects
• Tsembaletfu Primary School won the National Nutrition Awards and as a result Tiger Brand was currently supplying them with breakfast every single day as part of their reward
• Absenteeism and late coming has been minimized.

 

With regards to housing and living conditions, the mine manager reported that the Lafarge policy advocate for the employment of local people from areas in which it operates. Lafarge operates in nodes with functional housing markets with sufficient supply to affordable housing. Hence, it does not provide accommodation to employees. It was reported that the company was currently engaged with the Labour Unions on a new Lafarge Home Ownership Scheme. The process was currently in progress and once finalised and agreed to, the details thereof will be submitted to the Department of Mineral Resources.

 

In terms of Human Resources Development and Training, it was reported that Nelspruit Quarry has:

 

• Continuous training of staff in order to develop skill and improve competency
• Training provided for qualified students performing 1 year in Service Training.
• Graduate Development Program for qualified graduates.
• Management training for selected candidates, LAMP program (Larfage Aggregates Management Program).
• Artisan Training – Apprenticeship programs for practical training and preparation for trade testing.
• Bursary Programs for local students requiring financial assistance.

 

Training Interventions were reported as follows:

 

• Number of Women undergoing Mining Related Course were 5
• Number of HDSA Undergoing Management Related Courses were 3
• Bursaries were 2
• Internship were 3
• Learnership were 3

 

7.         Meeting with the Traditional Leaders

 

The discussion between the Traditional Leaders and the Committee were based on:

 

• There are challenges experienced by communities as there is no proper consultation. It should be obligatory for mining companies to communicate consultation times and venues with the communities.
• 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.

 

8.         Meeting with Pan African Resources

 

On 22 July, the Committee visited the Barbeton Mines. Mr Casper Strydom, Mine Manager gave an overview of Barberton Mines. He said the mining started in 1886 at Sheba Mine, Oldest operating mine. Currently there are three operations which is Sheba, New Consort and Fairview. It was reported that the Barberton mines treated about 24 000 ore tons per months and also have a Tailings Retreat Plant (90 000 tpm). All three operations have a treatment plant with a centralised Biox plant. The NUM is the representative union.

 

He reported that all mine operations have water use licences. Relevant inspections and audits are regularly done by relevant departments. The mines have good programmes to prevent water, air and waste management pollution.

 

He outlined the social responsibility by mine as follows:

 

1. Sinqobile Primary Project

 

The Construction of the school commenced in 2011 and was completed in 2013. Total construction budget (over 4 phases) was R14 000 000 .00. The school infrastructure consists of the following facilities: 24 classrooms, 2X ablution block, Admin block, sports field with combi court, fully furnished multimedia block (computer centre, science laboratory and library), classroom furniture and palisade fencing.

 

1. Umjindi Jewellery Project

 

This project was established in 2002, by Vukani Ubuntu and Umjindi Local Municipality, with aim of providing much need jewellery making skills to the previously disadvantaged youth in Umjindi. Barberton mines joined the project in 2008, as co-funder. Currently, Barberton mines is the sole financier of the project. The project continues to provide accredited jewellery making training as well as jewellery production and marketing, creating employment opportunities for the local emerging jewellers. The total annual budget is R1 800 000.00

 

1. Sinqobile Life Skills Centre

 

It was reported that the centre provide free, accredited technical skills in welding, sewing, brick make and bread baking. The number of intake per training program is 10, per 3 months period. Total annual budget is

R3 600 000.00. The centre also serves as a business incubator for sewing and welding emerging business:

 

• Umjindi Welding Primary Cooperative; former trainees, running their own welding business where the manufacture steel frame and supply local hardware store (Patel Hardware and Mica Hardware) as well as local household. They also supply Barberton Mines with various welding services as and when required.
• Kuhlekwethu Sewing Cooperative; former trainees, running their own sewing business from the centre, where they produce work-wear suits and supply Barberton Mines, Umjindi Local Municipality, Ehlanzeni District Municipality, as well as individual customers.

 

1. Sinqobile Vegetable Project

 

It was reported that this was one of the first of Barbeton Mines’ social programmes established in 2008 by a group of local women, from Sinqobile Township. Barberton mines donated land, water, electricity, irrigation and appointed a qualified Agriculturist or further mentoring and technical assistance. The project produces seasonal vegetables and supply at local superstores, hawkers and households. The total cost since inception was

R1 500 000.00

 

1. Emjindini Tribal Offices

 

The construction of the local tribal offices done in two phases (2013/14 and 2014/15 financial years) and was completed and handed over in April 2015. The tribal offices consists of the royal court room, 3 offices, kitchen and sore room facilities and ablution. The project total cost was R2 800 000.00.
 

1. Expansion of Makhanya Street

 

It was reported that the widening and tarring of the 2km man road in Emjindini Township commenced in 2013 and expected to be completed in August 2015. The project’s total cost was R7 000 000.00

 

1. Emjindini Secondary School Project

 

The school was built in 1954, with prefab material. The prefab structure was on the verge of collapsing and as a result, Barbeton Mines adopted the school, mainly for reconstruction purposes. The construction program went in 5 phases, of which phase 1 and 2 were completed. The remaining phases shall be completed within the specified period (2019).

 

With regards to human resource development, it was reported that the mine has budgeted an amount of R218 000 from the year 2015 – 2019 on ABET level one – level four.  The budget for learnership for year 2015 was reported at R1 987 000. The company has a total budget of R2 000 000.00 for each year starting from year 2015-2019.

 

8.1        Illegal Mining problem at Barberton

 

Mr Strydom reported that the illegal mining problem started in year 2000. He said the numbers and activities increased steadily. From 2004 illegal activity aggressive and organised, participants were well-armed (AK47’s, Shotguns, R1 and R5 assault rifles etc.). The employees, security guard and SAPS members were threatened and assaulted. It was reported that two SAPS special task team members were wounded by an AK47 gun fire. The underground workings were endangered by blasting of pillars and removal of support. There has been a significant increase in fatalities amongst illegal miners and influx of illegal immigrants to area led to serious increase in criminal activities in the town. It was reported that seven illegal miners were shot and killed on surface by opposing groups/robbers. The employees were threatened underground for their food, tools and access. In 2008, there was a cholera outbreak which claimed the lives of five people. Three underground fires caused by illegals claimed twenty five lives.

 

In 2009 on two occasions mine employees were taken hostage. The same year in December Sheba was closed for two weeks and about 950 illegals were removed. Mine employed specialized security firm to keep the illegal miners out. It was indicated that there has been greater co-operation between mine, SAPS, Department of Justice and Department of Mineral Resources (DMR). DMR has initiated criminal mining forum meeting and there has been serious effort put in to establish an intelligence gathering network.

 

It was indicated that since 2010 the problem was manageable, however the last couple of months has seen an increase of illegal activity which has led to 18 arrests. It was reported that there was a lot of illegal mining activity at Galaxy Gold Mine. There was a concern that illegal miners are not convicted due to technical aspects and the sentences are too lenient and not a deterrent.  He said that the mine only catches illegal miners on the mine and ring leaders remain free to plot and disrupt mining in future

 

He said the way forward was better understanding of the problem by all parties, continue with “criminal mining forum” and communicate problem to higher authorities.

 

The table below illustrates the Illegal Miners Statistics from 2005 -2015

	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
Illegal miners arrested	4	41	102	231	861	50	14	46	47	34	29
Illegal Mines Deceased in the mine	0	0	15	8	27	0	1	0	0	0	0
Given Amnesty					500

 

 

 

8.2        Site visit to Fairview Adit

 

The Committee was taken through the Adit where Biometrix Clocking System and Access Control was demonstrated. The security was very tight due to the fact that illegal miners could easily access the plant. They use patrolling dogs in the smelter.

 

8.3        Visit to ABET Centre

 

The Committee visited an ABET centre in the Fairview mine. The Centre serves the community around the mine. In the centre, there is a crèche which serves nearly 600 kids of the employees of the mine. The Centre has 77 registered employees. There are three classes for level 1, 2 and 3. The staff complement for the ABET centre is three which consist of one head and two facilitators. The classes starts from 06:00-14:00.

 

8.4        Visit to Vegetable Project

 

Members interacted with the members of the cooperative that the Barberton mines assisted. They told the Committee that they are eight household members and each members receive R 1000 per month from the project.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

 

9.         Meeting with Exxarro

 

On 22 July 2015, the Committee visited Exxaro, the North Block Complex (NBC) in Belfast. Mr Sipho Nkosi, the Chief Executive Officer welcomed the delegation and introduced his management team. He handed over to Councillor (Clr). X S Ngwenya the Executive Mayor of Emakhazeni District Municipality.  The Executive Mayor said he was privileged and honoured that the Portfolio Committee chose to visit Belfast. He told the Committee that Emakhazeni Municipality was made up of four local municipalities. It has a 27% of unemployment rate. The problem is education levels are very low. Fundamental challenges, create problems with infrastructure development. The relationship with the mine has not yet yielded expected rate.   He was confident that the visit will strengthen relations between the municipality and the mining houses to achieve mining charter objectives.

 

9.1        Mine Overview

 

Mr Simon Mkhonza, Mine Manager gave outlined the mine overview.  He said mining started in 1890 supplying coal to Maputo.  First underground mining commenced in 1925. Over the years, the mine has been managed by Gencor, Savage and Lovemore, Trans-Natal, BHP Billiton, Eyesizwe. In 2006 Exxarro continued management of the mine following the merger of Eyesizwe and Kumba Resources. Glisa is an opencast mining operation. It is located 1.8km from Belfast. Mine produces 320kt ROM per month and it is mining old underground workings.

 

With regards to health, it was reported that every NBC employee and contractor undergoes an annual medical examination. NBC has a well-developed Chronic Disease Management Program, available to all permanent employees and contractors. All employees and their families have access to the Employee Assistance Programme (EAP) facilitated by the Careways group. NBC supports the HIV/AIDS peer educator program in Siyathuthuka.  NBC monitors and reports surface water qualities in-and around the mine, groundwater qualities in-and around the mine, air qualities (Dust) and blasting vibration results to their stakeholders.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Mr Mkhonza reported the dust result for January to June 2015 as follows:

• Exceeded the residential limit at; Hadeco, De Villiers, School (Siyathuthuka) & Workshop.
• Placement of buckets pick up external sources of fugitive dust (unpaved roads, agricultural land) over which the mine has no control
• NBC was in a process of conducting mineralogical test to determine the type and source of the dust.

 

In terms of employment, it was reported that NBC employs 185 Exxaro employees, 823 contractor employees. About 70% of contractor employees reside in Emakhazeni Local Municipal District. He reported that in terms of mining charter compliance, capital expenditure was spent predominantly on Machinery and Plant, The local spending trend from 2012 was R5.8 million and for 2014 was R58.2 million.

 

Mr Mkhoza outlined the Social Labour Plan (SLP) projects as follows:

 

SLP Projects (2008-2012)	Successes	Status
Siyathuthuka Butterfield bakery project	13 Jobs Created	Complete
Belfast/Siyathuthuka housing project	20 Houses Built	Behind Schedule
Siyathuthuka Brick making project	13 Jobs Created	Complete
Alien Plant eradication Project	5 Jobs Created	Complete
HIV peer educator project at Siyathuthuka	Assistance in community	Complete
Siyathuthuka electrification project	35 Houses electrified	Complete
Chemical/Detergent and toilet paper project	14 Jobs Created	Project Cancelled
Siyathuthuka/Belfast livestock farm	R960  000 spent	Behind Schedule

 

SLP Projects (2013 -2017)	Status
Education Intervention	On track
Skills development centre	On track
Incubator Hub	On track
Agricultural Business	On track

 

9.2        Stakeholder Engagement Forum

 

Mr Mkhoza reported that NBC has quarterly stakeholder engagement and community development forum. He said the purpose of these forums are engagement and knowledge sharing with all interested and affected parties, sharing of environmental results (Dust, Water), sharing of blasting results, sharing of rehabilitation progress and address any general concerns.

 

9.3        Department of Mineral Resources (DMR) Inspections

 

Mr Mkhonza indicated that DMR has conducted four inspections in 2014 which are:

 

• 1 x Presidential Audit
• 3 x DMR departmental Inspection
• 1x Sec 54 issued (Dust at processing plants)

 

Two inspections conducted in 2015

 

• 1x Presidential Audit
• 1x Senior Inspector visit following community complaint.

 

In conclusion he indicated that NBC Glisa coal mine was one of the oldest active mining operations in South Africa. Glisa operates in a responsible and accountable manner. The mine strive to instil open and constructive stakeholder engagement. The company believes that community engagement is critical for a stable operating mining environment. NBC was located in a region with prospects for further growth in mining and will continue to conduct business in a responsible manner for the benefit of stakeholders.

 

9.4        Members raised the following questions and concerns

 

• They wanted to know the viability of the mine and future of coal mining in Mpumalanga
• Members asked the expansion plan of old thermal coal.
• Why it take so long to get water license?
• Problems of old workings and sinkings. How big  is the problem
• How much concurrent rehabilitation is being done?
• Fire burning update. More information was requested on the fire
• Haulage policy on the road. Is there a deal not to use the road.
• Section 54 issued. Was it the last to be received?
• With regards to stakeholder engagements, how often does it meets and who gets invited?
• Who objected on the new mine?
• How do you do inspection on the houses after blasting
• Community participation not looking good.
• More concerned on community in Belfast. What is the equity share for community and employee equity?
• No much done in terms of empowering women. What is the company doing to train and capacitate women?
• 20 houses been built. For whom have they been built If not for employees, what has the company done for sustainable human settlement.
• In terms of SLP projects. How much has been spent since inception, what percentage of revenue for Exxarro. Need to understand the extent of the commitment?
• How does the Community participate to ensure its upliftment? What is the company doing regarding road maintenance?

 

9.5        Responses

 

• Mr Mgojo shared information on the share price. He said the challenge in the market is that it has significantly changed.  China boomed from 12% to 7%. Any commodity that China used to buy in large quantities has seen its price decline due to slower demand. Mining industry is bleeding. He foresee in the next 5 years, things to remain the same. Some projects have to be delayed, cut on capital expenditure due to financial constraints has been effected.  However the company appreciate that there are economical assets on the ground that need to be extracted and Exxaro will continue to mine.

 

• Waterberg represent 40% of coal produced in SA. Coal is under severe pressure. There are projects that have been delayed because of environmental appeals by  the NGO

 

•  Sustainability: Water use licence is still outstanding. Water use license has been applied for over the past 10 years. Belfast mine licence was approved last year, however there has been an appeal by a certain NGO.

 

• In terms of acid mine drainage and rehabilitation, Exxaro has a comprehensive policy and standard. The company currently provides for rehabilitation in a fund held by the trust. It has been safeguarded trough an investment so it can be used for rehabilitation when the need arise. In as far and AMD closure, Glisa is going to provide water treatment plant. The company is working with the University of Free State in improving technology to  clean AMD water

 

• Waterberg and Mpumalanga, continue to be a big player, The Company is committed in this region. New Belfast Mine is on the pipeline which will supply to Eskom and export to other markets, as to which power station will be supplied that still needs to be discussed.
• Spent 30 million for water treatment plant, Activity is progress is subject to water use and approval, Exxarro cannot start with the project.

 

• NUM is the only recognised union.

 

• Still a challenge to employ women, Exxarro is doing a lot to improve gender balance.

 

• Municipality IDP, The Company regular engage with municipality Living conditions of employees. There are no hostels in Glisa. The company encourage employees to own houses through a housing policy which offers housing subsidy for employees.

 

• The 20 houses built was for extremely destitute families with the plea from the Municipality. Community residents.

 

9.6        Meeting with business owners, Mayor

 

Executive Mayor stated that, since 2011 working relations between the mine, business and the local council have improved.  One of the challenges for local SMMEs is that they have not started to benefit fully from mining activities. The community has a small population but levels of poverty are high. Reasons for locals not working is because of skills shortage.

 

There are also challenges with regard to infrastructure projects and the municipalities require some assistance. Better infrastructure will enable the municipality to attract investors. Mine is not doing well in terms of bursaries to locals, due to low level of numeracy in the area. At the moment there is only 1 beneficiary from Emakhazeni. Other challenge is road infrastructure as trucks are damaging the road further. The only road that continue to receive proper attention as indicated by Mr Mkhonza is the road to the mine.

 

The municipality can be a good tourist destination but the road condition make the place less desirable as a tourist destination. It is important to keep on engaging with the mine on how best the LED local economic projects can be sustained. Educational representative was satisfied with the support the mine was giving grade 12 however there was a need for the mine to explore how it can extend its support beyond Matric

 

Ms Moedi MD of Ragadi mining services who has been doing business for MBC with the mine from 2009, addressed the meeting. While working for the mine she identified challenges of black technical services providers in providing their services to the mine. The company is currently generating 50 % of its revenue from Exxaro with 40 employees stationed with there while, the total number of personnel for the company is 140 employees. About 75% of MBC employees are sourced locally. Challenges faced by the company includes; competing with big guys, limited support from Exxarro.

 

Nomvula Motlaung, Circuit Manager in the Department of Education for (8 high schools in the circuit). She stated that the support by the mine is very strong in Maths and Science. Exxarro has built library and renovated at Khayalami as well as undertaken partial renovation in Ikhwezi.  Number of learners accessing education was very low, currently the mine has got two local engineers on its project.

 

10.        Briefing by the Department of Mineral Resources on the Kinross disaster and unmarked graves in Winkelhaak

 

Mr D Msiza gave a background on the commemoration of Winkelhaal ex- mine

Workers. He indicated that the National Union of Mineworkers has brought to the attention of the Department the existence of a gravesite, at Winkel near Evander, of about thousand unknown mineworkers, The workers passed away either due to natural causes, occupational diseases or mine accidents. The graveyard was established in the late 50’s and early 60’s. It seemed that most of the workers buried at the gravesite were migrant labourers mainly from SADC countries. The workers were identified by a number on a plate, and their working equipment including helmets and gumboots which were placed on top of their graves. 

 

Mr Msiza outlined the mine ownership history. He said the mine was owned by Union Corporation Limited until1980. Gencor group took over from 1981 -1988 and handed over to Genmin Group in 1989. From 1990 -1995, Gengold Group took over. From 1996-1997, Goldfields took over and in Jul 1996 was called Evander gold Mines Ltd. Harmony acquisition in August 1998 as wholly owned subsidiary. Pan African Resources acquisition took over on 28th February 2013 Evander Gold Mining (Pty) Ltd.

 

He indicated that the Department of Mineral Resources (DMR) has subsequently established a stakeholder task team. The team consist of the DMR, NUM and Pan African Resource’s management.  The task team has developed and currently implementing an action plan on the commemoration of the ex-mineworkers. The National Heritage Council was also consulted on the commemoration process.

 

The DMR outlined the measures implemented. An investigator was appointed and has commenced with the tracing of the ex-mineworkers and their families. This has been done by engaging with TEBA, media, municipality and traditional leaders. Survey of the gravesite was completed by the mine surveyor and the total perimeter was 880m. An architect was appointed and has already designed the perimeter wall. A local contractor has been employed to build a decent perimeter wall at the gravesite.

 

He concluded that the department will continue with the tracing of the names of the ex-mineworkers and their families by also consulting the relevant Departments including DIRCO and Department of Home Affairs. They will erect a remembrance wall and tombstones for each identified ex-mine worker and engage with Heritage Council on proclaiming gravesite as Heritage site. The Commemoration will be held before the end of the year.

 

11.        Findings

 

The Committee observed the following:

Meeting with MEC

 

• There was a conflict between the mining companies and the Provincial Government and the DMR, Lack of communication between the three parties seem to be a major culprit.
• There is no co-ordination between the  Regional Department of Mineral Resources and Department of Economic Development and Tourism in Mpumalanga
• Mining companies do not adhere to appropriate protocols when dealing with communities that are affected by mining, especially traditional structure
• There is a problem of mining companies in the region operating without water use license which is illegal
• .Illegal mining remains a problem as it pertains to issues of prosecution of common criminals and the arrest of kingpins
• There is a competition for land use between the mining and agriculture which require urgent collaboration of stakeholders
• There is a general neglect of infrastructure only road used by mining companies seem to be getting attention

 

Lafarge Quarry

 

• There is no clear housing policy by the company, its obligations on  its Social and Labour plans regarding housing for employees are not clear
• The market position of the company is not clear, given the current unfavourable economic position, many mining companies find themselves in
• The mine’s approach to safety was commendable

 

Barberton Mines

• There was a concern on the authenticity of the letter of issued by the Umjindini District Municipality.
• It was shocking for members to see the transportation used by the mine workers of Fairview mine
• Members were not satisfied with the houses built for the employees.
• The committee was impressed with the type of ABET programme run by the mine
• There was no clear  financial implication model on illegal mining, detailing the cost of illegal activities to the mines

 

Exxarro Colliery

 

• The Committee applauded 52% on BEE holding but was concerned about the empowering of women.
• LED projects are managed by Exxaro and not by community members
• There was a concern on the delay of rehabilitation and time frame to fully rehabilitate the land was not specified.
• Concern on the sustainable human settlement for employees.
• The Committee was not satisfied with the consultation process between the mining houses and the traditional leaders, ownership patterns, gender and housing.

 

Grave Site

 

• The task team formed should be a committee whereby decisions could be formulated and implemented.
• The Committee was concerned about the visibility of the Commemoration wall of the Kinross Disaster.
• It was observed that the cost implications for this project was not outlined, hence could not be properly budgeted for.
• The Committee expressed reservation about the involvement of the investigator without involving the Police in the whole project.
• There was a lack of information on the role of each involved

 

12.        Recommendations by the Committee

 

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

 

• The intergovernmental relations framework has to be activated to enable the provincial government to exert appropriate influence on mining related issues, without overstepping its constitutional mandate
• DMR need to work more closely with the Provincial government on issues related to mining and consult fully with Traditional structures on issues affecting the respective communities.
• Lafarge needs to develop a clear housing policy for its employees.
• DMR should employ enough inspectors, particularly to manage the environmental and health impacts of all mining activities in the province.
• Mining companies in Mpumalanga should learn from best practice in terms of mining rehabilitations (e.g. Richards Bay Minerals in KwaZulu Natal)
• Traditional leaders should make use of the opportunity afforded to them through the bill referral and ensure that they participate in formulating legislation.
• Traditional leaders of the Province should forward all issues that deserve the attention of the committee to the Committee Secretary.
• Exxarro need to work harder in addressing issues of environmental compliance, as well as the participation of woman in its labour force, the committee will revisit the company in future (or call the company to Parliament to account on what has been done)
• Government should support a memorial to all mineworkers. This could be erected at the Winkelhaak hostel site where the unmarked graves were found.
• DMR should provide the Committee with information on similar incidences like Kinross Mine disaster and Evander graves.
• Government must consider the establishment of an investigative statutory body on the Evander graves and similar cases.
• DMR to work closely with and report to the police so as to ensure that authorities are officially notified about the existence of the more than 1000 unmarked and unaccounted graves, most likely of mineworkers.
• DMR should undertake a research to establish all the implications of turning the area into a heritage site and make sure that families are aware of the implications. The Department of Arts and Culture should be consulted on how to proceed with this intention.
• When mines close, the infrastructure should not be abandoned, but put to alternative uses. This should be planned while the mine is still in operation.
• The Small Business Development Department should work together with the mines to allow local small business to benefit from mine procurement and link this to the Provincial local economic development plans.
• Government should manage better the balancing exercise between the differing needs of agriculture, mining, environment and water and sanitation in planning the development of mineral resources for the benefit of all.

 

 

Report to be considered.