ATC170531: Report of the Portfolio Committee on Mineral Resources (PCMR) on its oversight visit to the Provinces of Gauteng, Limpopo and Mpumalanga on the 26 – 31 March 2017, dated 31 May 2017

Mineral Resources and Energy

Report of the Portfolio Committee on Mineral Resources (PCMR) on its oversight visit to the Provinces of Gauteng, Limpopo and Mpumalanga on the 26 – 31 March 2017, dated 31 May 2017

The Portfolio Committee on Mineral Resources, having undertaken an oversight visit to Gauteng, Limpopo and Mpumalanga  report as follows:


1.         Introduction


The Portfolio Committee on Mineral Resources (the Committee), having visited each of the nine Provinces in previous oversight visits is now focusing on issue based oversight visits.


The first issue based oversight had two themes:


  • Lily mine
  • Illegal mining


Before embarking on the oversight the Committee had the benefit of two reports from the Department of Mineral Resources (DMR) and the Business Rescue Practitioner (BRR) on the Lily Mine disaster on 5-Feb-2016, regarding subsequent effort to raise the container with the bodies of the three miners and to find new investors for the mine. The Portfolio Committee on Mineral Resources (PCMR) needed to visit the mine site, near Barberton, Mpumalanga, as part of its oversight responsibilities.


Illegal mining is a very complex phenomenon and the Committee will review two distinct aspects:

1.1        Curbing illegal mining in SA by law enforcement (including legislative

1.2        Managing illegal mining by legalising some informal mining, and
            offering real opportunities for junior, small scale and emergent miners.


The Committee has thoroughly canvassed the issue of illegal mining in the last 3 years, with an emphasis on curtailing the growth of this phenomenon. The Committee has visited illegal mining sites in Free State, Limpopo, Mpumalanga, KwaZulu Natal and Gauteng. According to estimates illegal mining costs the nation about R6 billion a year, in lost revenue alone (not counting the huge costs of security and the damage to infrastructure that accompany it).


The problem of illegal mining is experienced across a variety of mineral mined in South Africa (SA), from building sand (high volume low value minerals) to gold and diamonds (low volume high value minerals). When minerals are stolen, associated infrastructure in the form of copper wiring, piping and metal from underground and surface plants is also stripped and sold.




1.3        The approach to illegal mining involves the following five steps to limit illegal access to mining:


  • improved control at SA’s borders to stop the flow of immigrants into the country
  • increased effective closure of old shafts and working areas
  • tougher penalties for those found guilty of illegal mining and trade in minerals
  • better policing of illegal mining activities, and
  • breaking the syndicates dealing in these minerals.


The above initiatives have to continue, and may require legislative amendments to improve effectiveness. There is also a need for pro-active steps to implement the Mineral and Petroleum Resources Development Act (MPRDA) by promoting  access to mining for junior miners (involved in exploration), small scale miners (when this can be done safely) and emerging miners (medium scale black-owned mining companies). Also to be considered, is the possibility, in the right circumstances, of legalising informal mining.


The focus of the oversight on the pro-active approaches is new, complementing the past and present approach (concentration on law enforcement alone).


2.         Background


A delegation of the Portfolio Committee on Mineral Resources (PCMR) (the Committee) visited Gauteng, Limpopo and Mpumalanga Provinces from 26 – 31 March 2017


The Committee visited the offices of the Department of Mineral Resources to get an overview of their strategies in combating illegal mining with special reference to the Springs mine and furthermore receive a feedback from the national stakeholder forum on progress made since the Portfolio Committee (PCMR) visit in 2014, as well as challenges and alternatives to illegal mining from the Chamber of Mines (CoM) and its perspective on emerging miners.


The Committee also visited Burgersfort to review efforts of the Department of Mineral Resources (DMR) to end illegal chrome mining and promote legal chrome mining by emerging miners. A courtesy visit to Lily Mine was also embarked upon to review efforts of the DMR and mine management in resolving issues subsequent to the disaster of the 05th of February 2016.


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), Inkosi ZMD Mandela (ANC), Mr M Matlala (ANC), Ms M V Mafolo (ANC), Ms HV Nyambi (ANC) Mr IA Pikinini (ANC), Mr J Lorimer (DA) on 27 March, Adv. H C Schmidt (DA) on 27 March, Mr S Jafta (AIC)


Accompanying the committee was the Committee Secretary Miss A Boss, Committee Researcher, Dr M Nicol, Content Advisor, Mr N Kweyama, Committee Assistant, Ms S Skhosana.




  1. Department of Mineral Resources


Mr D Msiza: Acting Director General,  Mr MMA Zondi: Acting Chief Inspector of Mines, Mr S M Rasmeni: Head of Deputy Minister Office, Ms  Malebe: Acting Chief Director: Compliance and Endorsement, Mr K Matrose: Office of DG, Mr K Mhlongo, Office of DG, Mr M Nkabinde: Parliamentary Liaison Officer, Mr NV Mahwasane, Acting Chief Director: Technical Support Unit, Ms D Tshamiswe, Assistant Director: Enforcement and Compliance, Ms M Mathye: Acting Senior Inspector of Mines, Ms M Ramatwa: Assistant Director, Ms NNH Khanyile: Regional Manager (KZN), Mr A Kharive: Regional Manager (Limpopo)Mr  E L Letsoko: Principal of Mines (Mpumalanga), Mr HH Netshikweta: Senior Inspector of Mines, Mr MN Madubane: Principal Inspector of Mines, Mr F J Nkuna: Principal Inspector of Mines, Mr M I Kgope: Inspector of Mines (Mpumalanga), Mr S Makwela: Senior Inspector of Miners (Mpumalanga), Mr A.E. Zide: Senior Inspector of Mines (Mpumalanga), Mr  Semenya: Director, Mr N.D. Masera: Deputy Director, Ms S M Mohale: Chief Director Mineral Promotion and Intl Coordination


  1. South African Police Services (SAPS)


Brigadier E. A. Kadwa: DPCI Section Head of Operations, Colonel M Motlana: DPCI Precious Metals and Diamond, Captain Modikoe: DPCI, Captain KJ Maheya: SAPS Cluster Secretary, Brigadier MA Maja, Major General N C Mnisi: Provincial Head of Legal Services, Captain TS Moholane: Station Commander, Brigadier NA Maluleke: Provincial Head: Organised Crime Mr KW Mashamaite: Investigator


  1. Gold Fields


Mr M Machesney: CEO, Mr C J Hallet: HR Manager, Mr G Barnardt: Surveyor Ms NG Mbande: Control Room, Ms M Makwayi: Winch Operator, Ms DM Begg: Director Ops, Mr A C Magongo: AMCU Branch Secretary, Mr JD Boning: Legal Rep Solidarity, Mr GS Maritz: Legal Rep Solidarity


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


Mr Zondi, Acting Chief Inspector of Mines of the Department of Mineral Resources (DMR) briefed the Committee that illegal mining activities in Gold mining South Africa started in 2008, becoming prominent in Gauteng, Free State, Mpumalanga and Northern Cape especially at the following mines Pan African Resources: Barberton Mines, (St Helena) Welkom, East, Central and West Rand.


Illegal Mining activities occurred both on surface and underground in operational as well as non-operational mines. Illegal miners were processing gold near any natural water source, streams, dams and even utilising household portable water. Illegal mining activities occurred mainly where there are open inclined shafts with easy access to underground workings near communities, surface outcrops and mine residue dumps.


  1. Mr Zondi (DMR) highlighted the following challenges:


4.1.1                 Blasting or mining of remnants and stability pillars

4.1.2                 Surface and mine infrastructure is compromised

4.1.3                 Environmental degradation and pollution, caused by mercury used in processing ore to isolate gold bearing ore. It was reported that mercury can be absorbed into the skin and it is also a hazardous pollutant to the environment

4.1.4                 Alleged involvement of state and mine officials in illegal mining activities

4.1.5                 Shafts are sealed and re-opened by illegal miners

4.1.6                 Smuggling of food and gold

4.1.7                 Loss of life, health and safety for (mine employees, illegal miners and communities): In June 2009, it was reported that 81 illegal miners were killed in Welkom due to fire underground and in 2017 March 14 alleged illegal miners were killed due to turf wars in Benoni

4.1.8                 Continuous re-opening of sealed shafts or openings

4.1.9                 Human trafficking

4.1.10               Loss of revenue for the state and the mining sector

4.1.11               Gold sales were R62, 7 billion in 2015 and it is estimated that 10% or R6, 27 billion was lost due to illicit trade

4.1.12               Exploitation of women and children

4.1.13               Theft of   copper cables and steel

4.1.14               Shooting amongst illegal miners rival gangs

4.1.15               Sabotage of water reticulation systems.

4.1.16               Mining Environmental crimes that are too technical for both the Judiciary and law enforcement agencies e.g. SAPS (currently conducting training of both prosecutors and magistrates);

4.1.17               Storage facility of the confiscated machines/equipment like trucks for pending court cases

4.1.18               Towing of the confiscated machines/equipment for safe keeping: (low-beds, technicians and drivers)

4.1.19               Unwillingness to provide details of perpetrators by driver/equipment operators onsite for fear of victimisation

 4.1.20              Some traditional leaders are issuing permits;


  1. Interventions by DMR


4.2.  The following interventions were reported:


4.2.1                 Established and continue to chair stakeholder forums on illegal Mining

4.2.2                 Participation in the National Coordinating Strategic Management Committee (NCSMT)

4.2.3                 Rehabilitate derelict and ownerless mines

4.2.3                 Encourage mining companies to apply and conduct mining operations in outcrop and sub-outcrop areas

4.2.4                 Small Scale Mining opportunities and Joint Venture partnerships

4.2.5                 Companies to enter into contracts or Memorandum of Understanding (MOU)’s for toll treatment facilities and processing.

4.2.6                 Review and implementation of methods to seal or close open shafts or holing

4.2.7                 Encourage land use in areas where there is illegal mining activities. (Provincial and municipal, Privately Owned Land development)

4.2.8                 Update ownership and evaluation of minerals

4.2.9                 Currently engaging Corporate Government of Traditional Affairs (COGTA) to deal with issues relating go traditional leaders issuing mining permits.

  1.             Collaborating with the South African Police Services




  1. The following achievements were reported:


4.3.1                 Outcrop and sub-outcrops has been mined successfully by mining companies

4.3.2                 Land is being currently developed in areas where illegal mining was prevalent

4.3.3                 Provincial and national monthly stakeholder meetings are held

4.3.4                 Rehabilitation projects coordinated by the City of Joburg and Ekurhuleni Metropolitan Municipality continue

4.3.5                 Regular disruptive operations are now intelligence driven


4.4        The Department of Mineral Resources came up with the following proposed solutions:



4.4.1                 Legitimize some of the surface resources, by issuing mining permits to Small Scale Miners

4.4.2                 Amend most of the aggregate permits to include Gold Ore, and Chrome Ore in the case of platinum belts

4.4.3                 Economic evaluation of remnants and make information available to the public

4.4.4                 Release of assets by large companies to support Small Scale Operators including care and maintenance operations

4.4.5                 Create business opportunities within the Historically Disadvantaged South Africans (HDSA) communities for Small and Medium Enterprises (SMME) to supply the mining industry.

4.4.6                 Relax licensing conditions to accommodate small scale mining

4.4.7                 Facilitate access to funding from existing state owned financial institutions, e.g. Industrial Development Corporation) (IDC) mining to fund small scale mining

4.4.8                 Developing a programme to skill small scale miners

4.4.9                 Encourage and enforce concurrent rehabilitation of mines.



5.         Briefing by the Chamber of Mines (CoM)


Mr Tebello Chabane presented the submission by Chamber of mines on illegal mining. He reported that the Chamber of mines is a voluntary employer organisation that supports and promotes the SA mining industry. Chamber member companies represent more than 90% of South Africa’s mineral production by value, together these companies contribute around R11 billion in taxes per annum and around R5bn in royalties.


The organisation employs about 450 000 000 people directly through the multiplier effect of 10:1 directly employed individuals support about 4.5 million people. Further, for every direct mining job, it is estimated that two additional jobs are created in upstream and downstream industries. Members include 38 major mining companies, 32 junior mining companies and four association (which in turn represent more than 100 members of small and medium sized enterprises) Member are required to sign and adhere to a membership compact, a code of ethical business conduct, to which they commit to comply.


Mr Chabane reported that Illegal mining activities takes place on surface and underground, at closed-off, abandoned and operating mines. Illegal miners travel up to 3km underground, sometimes living there for several days at a time.


Whilst some illegal miners act out of economic desperation, Chamber cannot ignore that illegal mining activities are directly linked to lucrative illicit trade in precious metals and diamonds (and even wildlife, weaponry and drug trades at a global level). Illegal miners often risk their own health and safety, as well as the health and safety of others, with flagrant disregard for the law.


Mr Chabane gave a distinction between artisanal mining and illegal mining. He said according to International Council on Mining and Metals (ICMM), artisanal and small scale mining (ASM) includes a range of operations from “small, subsistence activities through organised formal small commercial mining activities. ASM incorporates both formal and informal activities, where informal activities include those operating outside the legal framework of the host country (that is, illegal mining). He said in South Africa, mining and related activities are regulated by numerous statutes. Legislation also prohibits the holding/trading without a permit of certain metals in unwrought state.


Mr Chabane presented the scope and impact of illegal mining. On the value chain in illegal mining particularly gold. He reported that underground workers, mostly undocumented immigrants, undertake the physical mining. Many have previously worked underground and they use chemicals in primitive processing methods,. They often organise tier 1 illegal miners and support them with food, protection and equipment


5.1                    Economic, Social and Environmental impacts


5.1.1                 Cost to industry and fiscus of more than R20bn/year in lost sales, taxes and royalties

5.1.2                 Theft of copper, electricity cables, dragline cables, diesel and materials prejudice economic viability of companies and pose risk to mine infrastructure

5.1.3                 Significant increase in security cost and cost related to unnecessary stoppages, repairs and maintenance by mines

5.1.4                 Cost to the State and mining companies when commissioning Mines Rescue Services for rescuers

5.1.5                 Unquantified environmental and social costs

5.1.6                 Influx of undocumented immigrants, 90% of arrested illegal miners’ undocumented immigrants

5.1.7                 Significant safety and health risks to illegal miners and miners at legal operations, as well as communities

5.1.8                 Increase in crime and illegal trade-explosives, diesel, copper cables and other equipment from mines

5.1.9                 Destroys the social fabric of mining communities, due to fear, coercion, human rights abuses, prostitution and substance abuse

5.1.10               Number of mining accidents/incidents and near-misses in recent years related to illegal mining

5.1.11               Risk of interruption of electricity supply (theft of copper cable) to underground workings

5.1.12               Threats to employees, booby traps, tampering with mine equipment

5.1.13               Sabotaged pipelines contaminate the environment

5.1.14               Illegal water usage and wastage

5.1.15               Sinkholes created due to water pipeline ‘spiking’

5.1.16               Underground fires and explosions

5.1.17               Mercury contamination of environment

5.1.18               Excavation and reopening of sealed and rehabilitated shaft, with associated hazards


5.2                    Access to underground mining includes


5.2.1                 Access through unguarded unprotected ventilation shafts

5.2.2                 via interlinked shafts of neighbouring mines

5.2.3                 Vehicular access in vehicles providing legitimate services to mines

5.2.4                 Bribing/corruption of mine security personnel

5.2.5                 Selling of clock cards by employees

5.2.6                 Re-employment of dismissed employees by neighbouring mines

5.2.7                 via contracts (inadvertent accessibility or collusion on the contractor’s part)

5.2.7                 Using explosives to blast open concrete seals of surface shafts entries.


5.3                   Efforts by the Chamber in supporting small scale miners:


5.3.1                 Emerging miners cover a diverse group of mining and mining-related entities including prospecting and smaller producing companies and associated companies such as contractors

5.3.2                 Emerging Miners’ Desk established to provide advice and support, and to act as a resource centre for the smaller member companies, which is the largest grouping of emerging miners in the country

5.3.4                 While the Chamber presents a consolidated position on key policy areas, it is sensitive to the needs of smaller members who may lack capacity and resources to implement policy and legislation

5.3.5                 There are a number of areas where smaller companies may require assistance like raising finance, technical aspects of mining such as geology and engineering, in skills development and compliance with the MPRDA and the Mining Charter

5.3.6                 Majority of emerging miners operate in the coal sector, followed by diamonds, manganese and iron ore.


5.4                    Multi-stakeholder efforts by the National Precious Metals Forum (NPMF)

Standing Committee on Security (SCOS) members deal with all   issues relating to security and product theft from mines


5.4.1                 SCOS led the establishment of the multi-stakeholder National Precious Metals Forum (NPMF) over a decade ago: Functions of the NPMF were recently absorbed into the SCOS following re-structuring within a South African Police Services (SAPS) structure

5.4.2                 Provincial multi-agency forums exist in five of the nine provinces,
which  feed into national multi-disciplinary co-ordinating body, which deals illegal mining and smuggling of precious metals and diamonds, -  the above forums implement provincially-based disruptive operations and measures to identify and apprehend illegal miners, including providing awareness and training to SAPS and other authorities in identifying the different forms of precious metals, especially Platinum Group Metals (PGM)s

5.4.3                 There has also been a regional and international engagement to create global awareness

5.4.4                 South Africa and the Russian Federation engaged in talks with the United Nations Interregional Crime and Justice Research Institute (UNICRI) and the United Nations Office on Drugs and Crime (UNODC) to develop a global strategy to assist in dealing with the illegal mining phenomenon.

5.4.5                 In April 2013, South African tabled a resolution, dealing with the combating of transnational organised crime and possible links to illicit trafficking in precious metals

5.4.6                 The resolution was adopted by the Economic and Social Council (ECOSOC) on 25 July 2013. The resolution stressed the need to develop a comprehensive multi-faceted and coherent strategies and measures, including both reactive and preventative measures, to counter illicit trafficking in precious metals.

5.4.7                 UNICRI was mandated by the ECOSOC in its resolution 2013/38, to develop an international strategy to combat illicit trafficking in precious metals.

5.4.8                 UNICRI has completed the assessment and presented the technical report together with an international strategy and national action plan.

5.4.9                 20th June 2016, Presentation to the South African Chamber of Mines Council of UNICRI Assessment project and finding, Endorsed by Council

5.4.10               4th August 2016, UNICRI meeting with the Chamber of Mines CEO to propose a National Precious Metals Action Plan, Concept note presented and in principle agreement obtained supporting the proposal made by UNICRI

5.4.10               Meeting still to be arranged to engage with Department of Policy Monitoring and Evaluation (DPME) to develop a National Action Plan involving illegal Mining

5.4.11               To establish terms of reference for the national action plan.
  Agree on the approach for a funding model for the project and consideration of national budget by the Government (consideration that a national budget be funded by interest donor in South Africa or elsewhere and or the Mining Sector and or the Chamber of Mines, and or government of South Africa)

5.4.12               In a separate development, it was announced in February 2014 in the Budget Speech, that second-hand good made from precious metals are to be excluded from obtaining notional input tax under the VAT legislation, as a measure to avoid fraudulent claims in this regard.


5.5                    Chamber believes that the question of illegal mining to be legalised should not be entertained. It should be asked how the country and an industry can support artisanal and small scale mining in a way that:


5.5.1     Optimally takes the country’s mineral resources to account

5.5.2     Is fair and aligned with the objectives of the MPRDA and the Mining Charter

5.5.3     Ensures that mining operations contribute to (and do not harm) communities in which they reside

5.5.4     Does not compromise the safety and health of all miners or communities, or the environment

5.5.5     Makes a fair and sustainable contribution to the fiscus

5.5.6     Does not compromise the security of SA’s borders, or its communities





5.6        Three ways that Artisanal and Small Scale Miners (ASM) can be promoted:


  •  work within existing laws
  • amend existing laws  
  • get exemption from existing laws


It was emphasised that illegal mining is profitable because illegal miners do not comply with the law.


5.7       How does the Chamber of Mines address illegal mining:


5.7.1     No single stakeholder can address the challenge of illegal mining on its own collaboration is key

5.7.2     The industry, individually and through the Chamber of Miners, remains committed to working with other stakeholders to address this serious challenge

5.7.3     Until all the underlying factors contributing to illegal mining are addressed, the Chamber of Mines will be addressing only the symptoms.

5.7.4     Whole legal enforcement system need to be addressed, which is social, economic issues, as well as policy, prosecution, immigration and border control

5.7.5     Industry cannot support moratorium on arrest of illegal miners operating at existing mines


5.8        How the Chamber of Mines addresses the issue of Artisanal Small Scale Miners (ASM):


5.8.1     Collaborative process is necessary

5.8.2     This is a complex issue that need interventions at a regulatory, environmental, financial and social level.

5.8.3     MPRDA already provides for permitting of small scale operators if “licensing conditions” are to be relaxed, consequences need to be explored in advance, if numerous new permits are to be granted, the DMR must have sufficient resources and capacity to regulate, DMR and law enforcement will need work hand in hand, the level of crime, intimidation and violence should not be underestimated even the Mine Rescue Services (MRS) has come under fire

5.8.4     But, many abandoned mines cannot be re-opened/re-mined as they pose a threat to miners, rescuers and communities

5.8.5     Release of assets by large scale companies to support small scale operators would need to consider indemnity for liabilities

5.8.6     Rehabilitation trust funds need to be ring-fenced for their original purpose

5.8.7     The mining industry is fully supportive of creating a vibrant, thriving small scale mining sector in South Africa, and would gladly share with other parties the work of its emerging miners desk


6.         Briefing by Harmony Gold


Mr Amborose Khuzwayo made presentation on the illicit Mining. He gave an overview on the illegal miners exit from underground, illegal access to underground and food and underground links used by illicit miners). He indicated that there are 5 syndicate activity levels which are level 1, Individual Criminal, Level 2 Ground or Gang, Level 3 Local Syndicate, Level 4 Exporter and Level 5 which are International Buyers.



6.1        The following internal threats were reported:


6.1.1                 Illicit mining activities

6.1.2                 Theft of gold mining materials

6.1.3                 Illegal use of explosives underground

6.1.4                 Theft of copper cable

6.1.5                 Collusion between mine workers, security, contractors, SA Police and illicit miners

6.1.6                 SAPS members collude with Level 3 (Local Syndicate)

6.1.7                 Mine health and safety.



6.2        Mr Khuzwayo reported the following statistics from 2007 -2016:


  • 1096 mine employees were disciplined (charged) due to illegal mining.
  • 501 Contractors were disciplined (charged)
  • 9961 Illegal miners were arrested


During the current financial year (2016/17), 2504 illegal miners were arrested, 82 got sick and 64 were deceased. Since January 2017 (since the closure of 3A Vent shaft till to date), 520 illegal miners were arrested and 29 got sick and 5 were deceased.  He reported that the current illegal mining hotspots were St. Helena A vent shaft, St. Helena 1A, 1B and 1C shafts and 9 vent, St. Helena 8 and 10, ARM 1,4,6 and 7 shaft with the arm 1 vent shaft and Brand 1 shafts.


Mr Khuzwayo reported that on 30/06/2014 at about 23:11 a Toyota Quantum taxi was observed with suspects busy offloading food stuff at the shaft area. Security members approached they suspects and they arrested one suspect and seized Toyota Quantum taxi.


Mr Khuzwayo reported that on 09/11/2016 at about 13:00 at Nyala Shaft, after information was received, Harmony Security members arrested a female mine employee, a conveyor belt attendant , after her locker was searched and she was found in possession of 2 illegal miners letters and R 410, 300.00. She was suspended and a criminal case was registered at Odendaalsrus SAPS. Pending Departmental and criminal action.


Mr Khuzwayo believes that Harmony Gold is successful in what they are doing but there is no assistance from the police and prosecutors. He said the success in the recent high profile Masimong case should be used to enforce law and order.  All cases where Police testifies are withdrawn (David and Lovemore old cases). The prosecutors are not supporting their cases (except Adv. Denyschen). The prosecutors sees illegal mining as petty crime. Food cased are withdrawn and food is returned back to owners by police. Reaction of the police to crime (security was shot burned to death on duty) is also an issue. Protection of the key witnesses from the police (hit on our witness and police and advertised, price tag of R300.000 per person killed)





7.         Briefing by NCMST (National Coordinating Strategic Management Committee


Brigadier E. A. Kadwa presented the overview of operational successes in tackling illicit mining.  Illicit mining is a very lucrative and growing phenomenon affecting several countries in Africa and Latin America. Illicit mining is a declared operational priority by the Directorate for Priority Crimes Investigation (DPCI). Specific focus is to disrupt and dismantle high level criminal syndicates, the DPCI is chairing both NCSMT and NOC (Notice on Compliance) on illicit mining. NOC primary purpose is to stimulate and strengthen operational corporation and collaboration in addressing the illicit mining threat impacting the Republic of South Africa.


Brigadier Kadwa reported on the identified hotspots as follows:


  • Gauteng: Springs, Brakpan, Benoni, Caltornville and Westonaria. The bosses of illegal miners approach mine security to allow their squads to operate. Security is promised money. As evidenced in the West Rand.
  • Limpopo Clusters: Giyani, Burgesfort and Atok. More and more illegal miners are invading the province. Trucks are said to be parked in the area where chrome is mined.
  • Mpumalanga: Barberton Agne mine (Agnes top), Pioneer shaft, Mamba, Ameida, Tiger Trap, Ben Lamond shaft. Basotho’s with well trained and armed illegal miners are competing with other illegal miners from the area. This heightens the probability of violence North West: Rustenburg Area: Platinum (Boitekong, Luka, Marikana and Lerome), Klerksdorp Area: Gold: Klerksdorp, Hartbeesfontein, Stilfontein, Khuma, Kanana, Klerksdorp Area: Diamonds: Taung and Wolmaranstad Clusters Mahikeng Area: Vryburg and Mahikeng. The illegal surface miners are targeting abandoned farms to conduct illegal activities.
  • North West is experiencing an increase of illegal mining from other provinces. There is hostility against any type of law enforcement from the illegal miners and the community.
  • Free State: Clusters: Harmony Gold Mine, St Helena. Mines are closing the redundant shafts in order to disrupt the flow of food destined for illegal miners, illegal miners often try to blow open the shafts with stolen explosive.
  •  Different syndicates are also fighting and illegal miners are armed with firearms, they shoot each other and also the mine security officials.
  • Northern Cape: Kimberly area: Gummtree Lodge, Buffaor Capem, Swiss and SA Housing Project, Springbok Area: Buffalsbank, Transhex and Kleinzee. More and more illegal miners are invading the province and vehicles with different registration numbers are said to be found at digging areas.


Brigadier Kadwa indicated that cases reported in total were 1460 from financial year 2013/12 to financial year 2015/16.


The following table illustrates the DPCI Response projects terminated successfully




Target Levels


North West

Project Cauldron


Project Tarantulas

Unwrought gold and Platinum


Unwrought Gold

3-5 (Inter Provincial)



4-5 (Transitional)

37 suspects addressed


43 suspects addressed

Free State

Project Masimong


Unwrought gold

2,3,34 (Trans-national)

28 suspects addressed

Suspect were charged with 577 charges including Money Laundering

Northern Cape

Project Darling


Project Digger





3-4 (trans-national)



3-4 (Trans-national)

23 suspects addressed


2 suspects addressed



He outlined the project driven investigation that it commenced in 2011 (National Project) Level 3, 4 and 5 by the DPCI. The focus commodity is dealing in uncut diamond (transnational of nature). The focus area is Northern Cape, Gauteng, Free State, North West, Limpopo, Mpumalanga, Lebanon and Europe. The investigative technique is covert and overt.  The focus entities are license holders within Industry registered at the Regulator (Dealers/Corroborator). Multi-disciplinary dimension which includes the National Prosecuting Authority, Asset Forfeiture Unit, DPCI, FIC (Financial Intelligence Centre) and others is adopted. The aim of the investigation is to dismantle, disrupt syndicates utilising legislation.


He reported that 28 main suspects were arrested mostly prominent business men/women, licence holders (Registered with the SADPMR), who have financial capabilities and knowledge of diamond industry.


He indicated that in the project darling:  forfeiture order an amount of R15 000 000 million was forfeited against the two accused in the Johannesburg High Court. Money seized will be paid into the CARA (Criminal Assets Recovery Account) fund. Both accused were sentenced to 5 years imprisonment or 2 million suspended for 5 years. To date R 67 million has been confiscated and deposited into the CARA which include assets.


In Project Tarantula, he indicated that it commenced in 2013 (National Project) targeting Level 3, 4, 5. Initiated by North West Province. The focus commodity is trafficking/dealing in precious metals (Gold and platinum group metals) the investigation based on documentary and electronic evidence. The focus areas are North West, Limpopo, Mpumalanga, Gauteng, Free State, SADC Countries and Europe, it entail trafficking of precious metals into RSA and exporting abroad to European Countries. The investigative techniques are documentary and electronic evidence, overt and covert investigation methods and techniques (Section 252A operations, interception and monitoring, surveillance etc.).


The focus entities are syndicate leaders and license holders within Industry i.e dealers /corroborators. The multi-disciplinary teams involved are Assets Forfeiture Unit, Director for Public Prosecutions, DPCI, FIC, Precious Metals Mining Industry and the South African Revenue Services. The aim of the investigation is to dismantle, disrupt and neutralize the threat by utilising applicable legislation to address the syndicates. The value of illegal gold that can be proved against the syndicate leader is about R1.3 billion. Charges investigated include Racketeering, Money Laundering, Fraud, VAT fraud, theft, Precious Metals Act contraventions, and 2nd Hands Goods Act contraventions.


In project Masimong, it was reported that during August 2012 an intelligence operation was launched targeting illegal mining activities at Masimong (Welkom) During April 2014, a take-down operation was conducted culminating in the arrest of 22 illegal miners for the theft of Gold estimated to the value of R120 million. On 20 February 2017, the accused were convicted on 577 charges ranging from Racketeering, Money laundering, Contravention of Precious Metals Act, trespassing and immigration related offences. This is a landmark moment in the fight against illegal mining in the country.


In his concluding remarks, He said the ultimate aim is to significantly reduce the illicit mining threat impacting South Africa and to disrupt and dismantle criminal groups orchestrating illicit mining activities.


8.         Members raised the following questions and comments:


  • Members felt that nothing is done in illegal mining for chrome
  • Members wanted to know the reason behind Harmony Gold in filling the hole with rubble
  • The report by DPCI does not give confidence of where is the problem and who is responsible for accountability
  • Members wanted to know from Harmony Gold why a huge amount of money is taken underground
  • Members felt that issue of communication needs to be improved.


9.         Visit to Burgersfort


On Tuesday, 28 March 2017, the Committee visited Burgersfort where a presentation was done by Deputy Commissioner of Police in Limpopo Province.


The police face massive challenges with legal and illegal chrome mining that stretches over 13 farms and 42 km of mountainous terrain. The legal miners are threatening to take the police to court because of the lack of control of illegal miners. There is no specific unit dealing with the illegal chrome mining. This comes on top of all the other duties of the police. Huge trucks load up the chrome at night from dumping sites. Police see the trucks standing, but they cannot arrest a driver as the truck might be waiting for a transport job that is legal. The weighbridges of the Department of Transport issues compliance slips for all trucks, legal and illegal. These slips are official and can be used even to take a load across the border to Mozambique. The illegal mining can be hazardous for communities, as it takes place in some areas that are close to residences.


The police are trying to maintain relationships with the stakeholders but this is difficult because the illegal mining is supported by many. Those who have the surface rights are issuing permits – in the name of indunas, chiefs and kings – although legal miners can only operate if they have a permit from the DMR. The communities are divided, because illegal mining is “pay as you go” and people get money straight away. The compensation they get from a legal mining operation that takes over some of their land can be delayed for many years.


When the police come across machines for moving chrome, they lack the expertise to drive them away and don’t have the low bed trucks needed to confiscate the equipment. Truck drivers take parts out of the machines to immobilise them and then return when the police have gone. Police lack a secure, fenced yard in which to store confiscated machinery. Overall, the resources available to the local and provincial police are inadequate for the work at hand.


10.        Visit to Lily Mine


On Wednesday, 29 March 2017, the Committee visited the Lily Mine and went to a site where the container sunk in the mine. The mine management explained how the incident happened on 26 February 2016 where three mine workers are trapped underground. The mine management indicated that it needs funding in order to start working on retrieving the container.


There is a plan to open another shaft that will lead to a sinkhole. The Business Rescue Practitioner indicated that R 200 million is required to sink another shaft that will be used to access the container from a safer and stable ground. Once funding is secured, the retrieval process is expected to take about nine months from the date of funding. The Committee was also informed about illegal mining taking place around the sinkhole area, where illegal miners are stripping the infrastructure of the damaged mine.


After a short brief the Committee visited the 3 families of the trapped mine workers. The meeting was so emotional and only one question was posed by the representative of the three families which is; when does the government plan to retrieve the container that sunk underground. Honourable Luzipo (the Chair of the PCMR) expressed heartfelt condolences to the bereaved families on behalf of the Committee. The Chairperson further indicated that in as much as he would like to commit to a particular time frame, the reality is that he cannot be able to achieve that without running a huge risk of misleading the families.


Given the geological situation in the mine as well as the parliamentary processes that have to be concluded before such a determination is made. It will be unethical for him to raise expectations of the families, before all the processed have unfolded and funding is secured. He assured the families that the Committee and Parliament will work very hard to ensure that the above issue, is resolved to the satisfaction of every stakeholder especially the families concerned.


11.        Presentation on Junior Miners


On Thursday 30 March, the delegation visited Springs, a presentation on opportunities and Support for Small Scale and Emerging Miners was made. The contents of the presentations consisted of: Significance of Small Scale Mining, Small Scale Mining Vision, Purpose and Objects of the Strategy, Illegal Mining and Small Scale Nexus and Mining Challenges and Interventions.


Significance of Small-Scale Mining


  • Improved spatial distribution of economic activity
  • Rural/local employment
  • Establishment of small local industries
  • Mainstreaming of HDSAs (Historically Disadvantaged South Africans) into the formal economy
  • Skills transfer to local communities.


Ms Mohale elaborated on the vision of Small- Scale Mining as activities that are viable, sustainable economic projects capable of making a meaningful contribution to decent employment creation, poverty alleviation and increased economic activity.


The purpose of the strategy is to establish a development framework to identify needs, co-ordinate service provision, alleviate technical and financial constraints and stimulate investment in small deposits by rural communities and HDSAs.


Ms Mohale reported on the objective of strategy as follows:


  • Support government’s efforts to ensure that  small business progressively increase its contribution to growth and performance of the South African economy in critical areas such as job creation, equity and access to markets, its specific objective is to promote transformation of the economy
  • Utilise mineral resources to stimulate local economies
  • Ensure  economic benefit to the country
  • Poverty Alleviation
  • Economic Empowerment


The Classification of Small-Scale Mining based on National Small Business Amendment Act, 2003 (Act 26 of 2003) was reported as follows:




Very Small



No.of employees










Annual Revenue






“Illegal” Miners Segmentation was reported as follows:


Type of Illegal Mining


  • ‘zama zamas
  • Law Enforcement
  • Awareness of Communities
  • Legitimising Resource
  • Rehabilitation and Closure
  • Small scale ,non-compliant
  • Community Awareness
  • Legitimising Enterprises
  • Support in compliance
  • Large, licensed companies who mine and do not declare resources mined outside their licensed area
  • Enforcement of MPRDA provisions
  • Unlicensed, medium to large, not necessarily linked to international criminal syndicates
  • Further exploration, definition of this “grey area”


Situation: Challenges and Opportunities

Solution, Recommendation

  1. Inconsistencies in definitions of illegal mining and policy and legislative approach and fragmented enforcement

Define, segment and communicate clearly (Illegal Mining Imbizo, Radio and TV, Roadshow)

  1. Ad-hoc, reactive, uncoordinated policy and enforcement measures

Ensure coordinated and consistent policy and legislative tools, definitions, provisions and enforcement (incl. MPRDA) rationalisation and strengthening participation in relevant domestic and international forum


Development of SOPs and Code of best Practice for Targeted Approach to Addressing Illegal Mining an responding intelligence, public complaining and whistle-blowers


Enforcement of Criminal, Environmental and MPRRDA provisions including Future Forums and Mine Closure Certificates

  1. Porous Borders and Markets for illicit Mineral products

Integrated/ Approach with SAPS, SARS, Customs and Home Affairs.

  1. Slow pace of rehabilitation, policy limitations (focus areas) and collusion of service provides

Review of Policy and Development of integrated Framework

Mintek and CGS on mapping and R&D for mining D&O and processing dumps

Addressing Collusion through litigation, improved contracting and blacklisting

  1. Macro and microeconomic cause for reduction  in production, employment and closing of shafts, etc.

Comprehensive Framework for Avoiding Sterilisation, promotion of junior and HDSA participation

“Hippos Ears”

  1. Ex-Mineworkers present pool of potential “zama-zama’ or illegal miners

Commitment from Branches of the Department and SOEs (State Owned Enterprises) of the Departments to support DM-Led efforts to manage backlog of management of Ex-Mineworkers including thorough consideration of alternative economic opportunities and rehabilitation (not to be confused with convicted or proven illegal miners.


Small Scale Mining


Situation: Challenges and Opportunities

Solution, Recommendation



Approval and finalization of SSM framework for management of MTEF allocation

Engagement with Principals and Development of Institutional Mechanisms




Access to and cost of government services and compliance

Increase awareness effort, incl. roadshow (integrated)


“Taking SAMRAD to the people”


Dissemination of information and integrated tools for MHS, Mining Skills, Business, etc.

Short to Medium


Limited Access to Funding for SSM capital investment and growth

Advocacy and agreement with relevant Economic Sector Departments and Development Finance Institutions to formalise provision of integrated financial services; and make SMME Act input



Policy Gaps and Inconsistencies



Tightening up of policy to cater better for small scale miners and close loopholes: Legislation Roundtable


MPP,Min Reg, MHS


There were six key challenges/characteristic identified which are:


  1. Finance and Markets through:


        -           Partnership with other departments to facilitate access to finance

        -           Sign-off of revised MOU with IDC with clear allocation of
            responsibilities to resume direct support

        -           Mobile, state sponsored marketing agent to establish and pay fair     
            price for production from small scale miners and promote beneficiation

        -           State procurement support of production by small scale miners.

        -           Strengthening off customs and export management


  1. Tools and Technology through:


  • Education and engagement with small-scale miners
  • Promotion of sustainable extraction and processing technologies in partnership with Mintek
  • Support in provision of equipment


  1. Research and Development through:


  •  Work with state agencies and academia to promote investment in R&D from small scale mining
  • Work with CGS (Council for Geoscience) to increase focus on rural and per-urban areas as well as poverty nodes.
  • Skills through:


  • Working with MQA (Mining Qualification Authority) to profile skills needs and gaps
  • Identify and address specific skills needs of operations being supported


  1. Compliance through:


  • Development of measures to ensure alignment of SSM activities with objects of legislation and regulator efficiency
  • Continuous M&E and engagement with communities to reduce non-compliance in partnership with Mineral Regulation division
  • Assistance with application process


  1. Environmental Sustainability through


  • Assistance with the drafting of environmental management plans
  • Assistance with financial provision


In closing, Ms Mohale, concluded that:


  1. Promoting awareness of mining opportunities and regulatory requirements in rural and peri-urban communities; amongst HDSAs through regional workshops and scope to further strengthen cooperation with relevant Departments and State entities
  2. Promoting regulatory compliance in small scale mining operations by ‘legalizing’ small scale operations, assisting in the application process and constant M&E (Monitoring and Evaluation) to ensure compliance to regulatory framework especially environmental and health and safety
  3. Providing technical support to small scale miners (including Beneficiation Proactive Promotion through Partnership with the CGS to identify small scale deposits with priority given to peri-urban, rural areas as well as communities within poverty nodes and working with COGTA to develop community led enterprises to exploit these resources and integrate into spatial and local economic development plans.


Addressing regulatory constraints to growth of small scale and emerging miners through Environmental Management: EIAs (Environmental Impact Assessment) and guarantees, duration and scope of permits, Social License and impact, permitting process efficiencies, promoting awareness of mining opportunities and regulatory requirement in rural and per-urban communities; amongst HDSAs, Regional workshops and scope to further strengthen cooperation with relevant state agencies.


12.        Briefing on the issue of a 5 year old boy who fell in an open 
            shaft in Boksburg


On Thursday, 30 March 2017, the delegation wanted to visit a shaft where a 5 year old boy fell in an open pit in Boksburg. The mine rescue practitioner advised the Committee against the visit due to community protest in the area, instead the briefing was provided. Mr Christo Richard who is the mine rescue practitioner told the Committee that Richard Thole disappeared in an old shaft on 27 February 2017 when he was playing with his friend.  His friend went to report the matter to his family, who in turn reported to the police. Subsequently the police went to check around the shaft where Richards was playing.


The Mine Rescue Service team was requested to devise a plan that can be used to rescue the boy and bring him to surface. Because it was a closed mine, the rescue services did everything within their capability to retrieve the body but to no avail. It was indicated that they Mayor of Ekurhuleni was also assisting and even contacted the army to try and assist and nothing could be done, as there was no oxygen presence beyond a particular point underground (which was unfortunately above the suspected depth where the body was).


Members felt that this was an assumption (that the boy fell into the shaft, as no one had actually seen the body underground), and enquired if this might be a case of possible abduction. It was recommended that a concrete wall should be erected to seal the shaft as a matter of urgency, DMR reported that CGS has been consulted to close the shaft while it wait for the rescue service’s report.


13.        Findings


The Committee made the following observations:


  • Based on the submission by Brigadier Kadwa that the, there is a need to review PMA of 2005 (Precious Metals Act, No. 37 of 2005) PMA to contain the same form of words regarding “The Republic, or elsewhere” as in the Drugs and Drug Trafficking Act, No. 140 of 1992. This is because people who are in transit in international airports in SA are not “in the Republic” in legal terms. Therefore they cannot be apprehended and searched in case they are carrying unwrought gold or rough diamonds. [However, this needs more clarity as it does not make sense to introduce such a change anywhere in the PMA.] 
  • While the DMR is making an effort to support small scale and emerging miners, this is being done on an amateur scale, with discrete projects. There is a need to take on board the fact that small junior mining companies will secure the future for mining in South Africa. They are needed to do the exploration and discover the deposits to replace areas that are mined out. Small scale and artisanal mining has a place here, but there is a real need to focus proper attention on junior miners and how to support them.
  • Junior miners offer a route of entry into the mining sector for black investors along-side international investors with expertise and access to capital.
  • The environmental laws have had the unintended consequence of disadvantaging new entrants to the mining sector, who have to pay huge costs associated with environmental impact assessments, long before any mining production takes place. Such costs were not applicable in the past and established mining companies did not have to pay them.
  • Despite the existence of Social and Labour Plans in mining, general labour legislation and provincial laws that should help communities when affected by natural disasters, there has been no proper assistance for communities of the Lily/Barbrook mines, which shed over 1,000 jobs in 2016/17.
  • The mines were by far the major employer in the area and families have been left suffering as a result. The mine is technically not closed because it is still under “business rescue”.
  • The above situation leave former employees in a state of limbo that advantages  shareholders, since they get to  keep  mining rights while looking for prospective buyers of their assets. The illicit chrome industry makes use of huge trucks that travel on national roads. There needs to be a system to intercept trucks that are transporting illegal loads.
  • The drivers (involved in illegal chrome mining) are not always complicit, in that they are told by their bosses where to fetch a load and where to drop it.
  • All carriers should have permits that reflect what is being transported, where it is going to and the source of the chrome.
  • Electronic surveillance tools can be used to stop the conversion of loads from illegal to legal. Toll gates and the military could be deployed in the Steelpoort/Burgersfort areas to monitor illegal transportation of minerals, given that the area has one main road to enter and exit the town.
  • Illegal mining in Benoni for gold is generally done by foreigners from Zimbabwe, Lesotho and Mozambique with only about 10 per cent South Africans. In contrast illegal mining in Steelpoort area is done by local people, often with support of local communities and traditional leaders (who issue illegal permits).

14.        Recommendations by the Committee


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


  • Government funding should be investigated to cover the environmental compliance costs for emergent miners.
  • Incentives, including tax incentives need to be investigated to promote junior miners, which will reduce illegal activities.
  • The whole issue of mine closure and mine downscaling needs to be revisited to take account of the human consequences alongside the environmental effects, when a mine suffers a disaster or fails because of rising costs or tumbling commodity prices.


  • There is a need for action, to engage traditional leaders (or officials in their administration) and embark on awareness campaign, with regards to mining (without permit) on traditional owned land.
  • The DMR should embark on an education campaign, to sensitize traditional authorities that regardless of land ownership, the mineral resources underground belong to the nation as a whole, and only the DMR may grant mining rights. Permission to mine rests solely with the DMR, and is given only when all safety and environmental safeguards are in place
  • There needs to be one (uniform) enforcement system for illegal mining, just as there is one system for environmental regulation.
  • The DMR should work in concert with the emerging miners’ desk at the Chamber of Mines to provide appropriate advice and support for new entrants to the mining sector.
  • There is a need to engage National Treasury (SARS) regarding the issue of border control in terms of custom and duties as it pertain to illegal chrome mining.


Report to be considered.



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