ATC180905: Report of the Portfolio Committee on Mineral Resources on its oversight visit Gauteng on the 29 January – 02 February 2018, dated 05 September 2018

Mineral Resources and Energy

Report of the Portfolio Committee on Mineral Resources on its oversight visit Gauteng on the 29 January – 02 February 2018, dated 05 September 2018

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


  1. Introduction


The aim of the oversight visit was planned to tie up some “loose ends” from the work of the Committee, as it pertains to mining research and precious metals beneficiation and furthermore consolidate and update previous Committee observations and recommendations.


The theme for the oversight was related to government support for the future growth of the mining sector. Covering support for prospecting, the granting of rights to minerals, research on mining methods/machinery and the development of technologies to process ore and waste from mining operations sustainably and economically. These are among the issues considered in the 2015 “laboratory’ for Mining Phakisa.


The oversight theme was to get an overview of how the DMR acts as the custodian of the nation’s mineral resources. In this role the DMR grants access to mineral resources by licencing, facilitating and encouraging research on mining.


2.         Background


A delegation of the Portfolio Committee on Mineral Resources (the Committee) visited Gauteng Province from 29 January – 02 February 2018.


The Committee visited and held meetings with the stakeholders to look at the following:


2.1 Visit to SA Mineral Resource Administration Database (SAMRAD),  


The issue of the identity of who has been granted rights by the Department of Mineral Resources (DMR), in what minerals and in which areas, has been a major concern of the Committee. The DMR has undertaken to have this information available online and publicly (in a transparent manner) – as is the case in Australia and Canada, Tanzania and Mozambique. The visit will assess the progress made and challenges that remain to integrate all of the information systems of the DMR electronically over a planned five-year period. It will also provide an opportunity to see how the DMR could make the application technology for rights to minerals accessible to rural communities via the regional offices.


2.2 Visit to the CGS National Core Library – Donkerhoek 


The Council for Geoscience (CGS) has the legal mandate to store the results obtained from exploration drilling for minerals and petroleum. This is to assist the state in understanding the mineral potential of the country and particular sites so that the nation’s mineral wealth can be prudently managed. The facility also provides access (at a fee) for geologists to access the drilling cores stored in the library of the CGS. The Committee recently visited the Geological Survey of Western Australia and its drill core “library” in Perth. The visit to Donkerhoek was to assess what would be needed by the CGS to have a similar facility for assisting with exploration and prospecting. The Committee could also review the facilities needed for the proposed national geo-mapping campaign.


2.3 Visit to CSIR Kloppersbos (research into properties of mine dust)


The Council for Scientific and Industrial Research’s (CSIR’s) Kloppersbos facility is the testing facility devoted to mine-related dust-explosion simulation. This research is critical to avoid explosions, particularly in coal mines, and has a new role to play as the Waterberg coal fields with differing geological profiles are now opened. The visit was to understand the risks of mining and what could happen if proper precautions are not taken.


2.4 Department of Mining Engineering at University of Pretoria (UP)


The visit to UP was to compare the extent of collaboration between a new school of mines in SA and mining research in the public and private sectors.


2.5 Visit to the Mining Precinct – the “COMRO” facility of at Carlow Road,   


The Committee had long recommended that government provide support for Research and Development (R&D) into mining techniques. The Carlow Road facility (now named the Mandela Mining Precinct) was revived through a government and private sector partnership as one of the outcomes of the Mining Phakisa laboratory process in 2015. It is already in continuous operation. The Committee would benefit from understanding the progress made and the potential for more efficient mining methods.


2.6 Visit to mining research at Wits University


The Committee visited the Wits Mining Institute at the University of the Witwatersrand to hear about the extent of collaboration between the oldest mining school in SA and mining research in the public and private sectors.


2.7 Beneficiation in the Jewellery Sector – visit to the Regulator in


The SA Diamond and Precious Metal Regulator (SADPMR) is a key institution in ensuring that more of South Africa’s precious mineral wealth in processed locally. The Committee went to see how does the Regulator monitor and promote precious metal and diamond beneficiation in South Africa?


The Committee held meetings with Department of Mineral Resources (DMR), Chamber of Mines (CoM), Mine Health and Safety Council (MHSC), Mining Qualifications Authority (MQA), National Union of Mine Workers (NUM), Association of Mineworkers and Construction Union (AMCU and Solidarity to get an overview on health and safety issues in mines. Health and safety is a tripartite issue where employers, employees and government all have to contribute. In recognition of this fact, the 1996 Mine Health and Safety Act established the Mine Health and Safety Council (MHSC) and the Mine Qualification Authority (MQA) as stakeholder-led institutions to co-ordinate and direct research and training in order to improve health and safety performance of the mining industry.


The parties were asked to present their views on the successes and achievements of the above institutions in promoting zero harm and whether any particular changes are required in the way that they currently operate, so as to improve safety and health outcomes in future.


3.         Composition of Delegation


  1. Parliamentary Delegation


The delegation was constituted by the Chairperson of the Committee as the Leader of the delegation, Mr S Luzipo (ANC), Inkosi ZMD Mandela Mr M Matlala (ANC), Mr J Lorimer (DA), Adv H C Schmidt (DA), Mr M Matlala (ANC), Ms HV Nyambi (ANC) Mr I M Pikinini (ANC), Mr S Jafta (AIC)


Accompanying the committee was the Committee Secretary Miss A Boss, Committee Content Advisor, Mr N Kweyama, Committee Assistant, Ms S Skhosana, Mr J Molafo, Communications


3.1.3     Guests in Attendance





Adv T Mokoena



Mr MMA Zondi

Acting  Chief Inspector of Mines and acting chairperson, MQA


Mr S Mabaso

Regional Manager: Gauteng


Ms R I Singo



Ms P Gamede

DDG: Corporate Services


Mr R Nkambule

Chief Director


Mr M Nkabinde



Mr K Matrose


DGs Office

Ms B T Ngebulana

Acting Regional Manager


Mr A Mulaudzi

Regional Manager: Free State


Ms T Basi

Acting Regional Manager: NW


Mr P Swartz

Regional Manager: NC


Ms D Kunene

Regional Manager: WC


Mr N Zindela

Regional Manager: Limpopo


Mr N A Tshivhandekano

Regional Manager: Mpumalanga


Mr S Manyaga

Acting Regional Manager: KZN


Ms MM Malapane

Acting Chief Director (Central Regions)


Mr N V Mahwasane

Director: Mine Surveying


Mr S H Vezi

Deputy Director: Administration &Systems


Mr KMB Mokoatle

ICT Project Manager


Ms C Leso

Chief Information Officer


Mt K Malefo

Acting Director SDM


Mr M Mabuza



Ms T P Nxumalo

Company Secretary


Ms V Nxumalo

Acting Head for Geoscience


Mr M S Khwela

Manager: Protection Services


Ms H P Ntlele

Strategy Officer


Ms R J Makwela

Marketing and Communication


Ms  N Kunju

Facilities Management


Prof M A Hermanus

ED: Natural Resources


Ms A Fredericks



Dr T Dlamini



Mr R Bergh

Manager: Mining


Mr R M Dicks



Dr E S Ritchken

Mining Phakisa


Mr IE Patel



Mr N Singh

Manager R&D


Mr A Macfarlane



Mr J Boshielo

Manager – Centre of Excellence


Mr X Mbonambi



Ms P Maka

Acting General Manager


Mr T K Sibanyoni

Company Secretary


Mr MM Mangaliso

Licensing Manager


Ms M A Pholoha



Mr N C Khosa

General Manager: Regulatory Compliance


Mr M F Mngandi

Chief Inspector: Precious Metals


Mr K Menoe

Acting CEO


Ms N Sibeko

Company Secretary


Ms N Danisa



Mr C Van der Ross

Operations Manager



4.         Visit to Department of Mineral Resources on SAMRAD at DMR in

Adv T Mokoena the Director General of the Department of Mineral Resources led the delegation and introduced his team. He handed over to the Chief Director Ms R Nkambule to lead the presentation. Ms Nkambule outlined the presentation as follows: Background, Application process and transparency thereof, Integration of Management Information System, Applications and status thereof and Conclusion.

4.1        Background

  • Section 3 of MPRDA deals with the custodianship of the nation’s minerals and petroleum resources.
  • The state exercises its custodianship through the Minister of Mineral Resources by giving the Minister the powers to ensure the development and management of the South Africa’s mineral and petroleum resources S3(2) of MPRDA.
  • Chapter 4 of the MPRDA deals with among others processes and criteria of dealing with applications for the right, management thereof and obligations of the holder.

4.2        Application Process and transparency thereof:

  • Section 6 of the Act deals the principles of administration (e.g. reasonable time, transparency, etc. hence SAMRAD).
  • SAMRAD is the South African Mineral Resources Administration System that the department is using in administering the application process for the mineral rights.
  • The system is programmed with business rules as per MPRDA to ensure transparency.
  • Status of the application is available on the system and progressively as decisions are made.

4.3        Integration of Management Information Systems

  • As indicated previously, there is a need for system enhancement.
  • However, the department stopped the enhancement but rather took a decision for system improvement which will be inclusive of integration with other systems like Mine Health Safety.
  • The department reported that it is currently in the process of investing into an Integrated System to be developed over a five-year period in phases as follows:
    - Phase1 Process mapping and Enterprise Architecture.
    -     Phase 2 Infrastructure enhancement (servers and bandwidth).
  • -     Phase 3 System procurement and implementation.
  • The Department is confident that this process will simplify the process and make it more efficient.

The application status for prospecting rights, mining rights and mining permits per Province was presented.

4.4        Administrative challenges

The following challenges were outlined:

  • Lack of funding to provide for required human resource capacity to implement the Departmental mandate.
  • High volumes of applications received and less human capacity to process within stipulated time frames resulting in delays in processing and finalising applications.
  • Lack of financial capacity to provide for systems and technology for monitoring and evaluation of compliance with the Act.
  • No integration in the management of mining data (mineral regulation, mine health and safety, mineral policy and promotion.
  • High cost associated with lodgement of applications (i.e. EIA costs and provisions for rehabilitation guarantees).
  • Technical nature of the content of application requirements.
  • HDSA applicants are unable to fully comply with authorisation requirements within stipulated times.
  • Landowners’ denial of applicants to prospects/mine on their properties.

4.5        Measures to address

The Department has the following measures in place:

  • Assistance of HDSA applicants to comply with requirements even if the process runs over the stipulated time.
  • Engaging Council for Geoscience and Mintek to provide technical assistance.
  • Need for interventions for a financing mechanism to assist Historically Disadvantaged South Africans (HDSA) applicants.
  • Where landowners deny access to properties, utilise the provision of section 54 of the MPRDA to mediate over disputes.

In conclusion, the Department felt that there is really a need for it to be more financially resourced to deal with the above challenges. In order to facilitate processing of applications in a seamless and cost effective manner including improving turnaround times.  There is also a need for an integrated system to improve data availability and reliability. Formal report on Section 11 will be provided to the Committee by end of March 2018.  

4.6        Members raised the following questions and concerns

  • With regards to process in building integrated system. What is the estimated cost and applicable timelines?
  • On the Summary of applications and status, low number of granted of rights, why is there a big gap between number of applications made and those granted
  • Has a comparative exercise been done with those of the private sector?
  • With regard to the denial of landowners to grant access, is it possible to quantify the frequency of such occurrences?
  • SAMRAD systems, has been widely quoted as not working properly, can the Department give an assurance to the Committee that that it will work in future.

5.         Meeting with University of Pretoria (UP)


The Committee was welcomed by the Dean of Faculty Engineering Built Environment and Information Technology, Prof Suni Maharaj. He acknowledged the visit by the Committee and indicated that it is the first time the University has received a delegation from the Committee on Mineral Resources.


The HOD Mining and Engineering, Professor Ronny Webber-Youngman made a presentation on the contribution of mining. The 2015 statistics released by the Department of Higher Education and Training (DHET) for 13 SA Universities as traditionally defined, he indicated that one in every 10 degrees conferred in South Africa is from the University of Pretoria. UP delivers 13,9 % of all undergraduate degrees 20,3 % of all master’s degrees 17% of all doctoral degrees and 27,8% of all engineering degrees. 


Prof presented the department of Mining Strategic Intent with regards to student numbers. Indicating that undergraduate’s numbers for 2017 were 219 students, 80 HDSA (Historically Disadvantaged South African) 30 % females. According to the strategic plan 200 undergraduate students were planned for by 2025.  There were 45 postgraduate students for 2017 and the strategic plan project post graduate intake of 100 by 2025, with 30% being full time students.


Prof indicated that the UP intents to have 100 postgraduate students, 70 Honours 20 Masters and 10 PhDs’ by 2025. Full time postgraduate student’s numbers were estimated at 30% of total post graduate numbers broken down as follows: 5 Ph D students, 10 Master students and 15 Honours students. Mining Resilience Research Centre in collaboration with Mine Health and Safety Council (MHSC) was the key driver in multidisciplinary research supported by the Virtual Realisation (VR) centre in terms of realisation (visualisation) of research outputs.


It was reported that the following short courses/ Research Areas of expertise are available to the industry:

  • Introduction to Mining.
  • Rock Engineering.
  • Risk Management.
  • Rock Breaking.
  • VR Visualisation.
  • Management and Leadership.
  • Tunnel Engineering/Mine Mechanisation.

It was reported that the following courses were in the design stage:

  • Centre of Excellence Surface Mining.
  • Safety Officer Qualification (All Mining Universities are involved with this process with the Chamber of Mines).
  • Mining Innovation Implementation Business Unit.
  • Marine Mining.


The Mission of Kumba Virtual Reality Centre for Mine Design is to develop a fully integrated mine design process in the Virtual Reality domain, including all relevant and related technology in the process of the optimisation of mine designs, incorporating Augmented Virtual Reality.  The vision is to be a word class virtual reality centre that enhances education and training for the benefit of safety and health and environment in the mining industry through an innovative approach to mine design.


Prof gave an explanation on the Mining Resilience Research Centre (MRRC) at UP. The vision is to establish the Institute at the University of Pretoria as a leading international contributor to solutions for complex mining industry problems.  The MRCC mission is to increase the resilience of the mining industry by contributing towards practically implementable solutions to enable the mining industry, in its transition to move from being reactive and compliant to eventually become resilient in issues relating to safety, health, environment, social responsibility and community management through well-structured and committed postgraduate education and rigorous integrated, scientific research collaborate drive initiative.


Professor reported on the status of an International Society of Mining Professor (SOMP). As at January 2018, it had 301 members (all Tuks lecturers SOMP members), 128 Mining Universities (Wits and UJ are also members) and there are 48 countries that are participating.


Outlining the status of the Mining Engineering Education South Africa (MEESA), Prof indicated that it was initiated in 2015 and is made up of the HoD’s of Tuks, Wits, UJ and UNISA. The main aim is to foster an understanding and support amongst the Mining Universities in South Africa. It is a common platform dealing with specific challenges experienced in academia, activities that form part of the objective, student support initiatives, leadership seminar drives, curriculum discussion, research support discussion (incorporating MRRC and WMI letter of support).


5.1        South African Mining Extraction Research, Development and Innovation   


Prof reported that the administrator is in the Mining Precinct (CSIR: Mining and Mineral Resources Division). The Collaborators are CSIR, University of Johannesburg, University of Pretoria and University of Witwatersrand. MRRC project Involvement in SAMERDI involves mechanisation of Gold Mines, Mechanisation of PGM mines, Non-Explosive Rock breaking, Longevity/Modernisation of Current Mining, Real-Time Information Management Systems and Successful Adoption of Technology (Human Factor Focus). It was reported that Harmony gold has invested 22 million over 5 years.


5.2        Role of the MRRC in SAMERDI


The MRRC was directly involved and played a key role in project planning, i.e. methodology development, activity planning and sequence; timeline and cost calculation; project team assembly from within the University of Pretoria.  The MRRC is and will remain a key collaborator in Project execution and upskilling of the next generation of skills for the South African Mining Industry.


5.3        Value proposition of University and Industry collaboration

  • There is a need to increase capacity in research.
  • Continued new knowledge development as collaborators.
  • Specific skill identified and research development done across boundaries.
  • Increase in research capacity in terms of new mining researchers (benefit to the industry).
  • Continued development of post graduate students involved in mining safety and health research incl. Honours, Masters and PhD’s through cross pollination of skills.
  • Sustainable research capabilities to deal with mining industry research related challenges.
  • The visualisation of research projects as part of a bigger upskilling implementation strategy.
  • Upskilling of Research capabilities amongst young researchers, incorporating HDSA individuals and institutions
  • Women in Mining Research another key development area.
  • Amplifying mining research as a career opportunity through collaboration.
  • Enhancing South African Universities research credibility in an international environment.


5.4        MHSC Project Overview

5.4.1     MHSC/ Completed Projects


The following completed Projects were reported:


  • Develop Feasible Methodologies for Escape in Poor Visibility (2014-2016).
  • Develop Testing Specification & Assess the Feasibility of Support Testing Facility (2015-2017).
  • Critical Analysis/Review of Occupational Health Handbook (2017)

- UP served as a sub-contractor to the Guild Combination (Pty) Ltd.

  • Missing Person Locator System (2016-2017)

- Final year thesis – Ms Grace Moutlong.

- MEng on related area – Mr Lawrence Ngwenyana.

  • Establishing the Dissemination & Commercialisation Unit at the Centre of Excellence (2017).

- Collaboration with CSIR – Ms Nicki Koorbonally.


5.4.2     MHSC/Current Projects


The following completed Projects were reported:


  • Rock mass Condition Assessment Tool (2016-2018).
  • Underground to Surface Communication System (2016-2018).
  • Test and Simulation Capability to Evaluate Collision Management System (2016-2018) Collaboration with UKZN (Recent demo session hosted at Gerotek).
  • Developing Minimum Illumination Standards for Mobile & Fixed Equipment (2017-2019)

- Collaboration with Grouptek Engineering- Mr Lindani Tshibe.

- Final Year Thesis – Mr Mahlogonolo Seete.

  • Assess the Feasibility of Reducing Diesel Particulate Matter Exposure (2017-2019).

- Final year student graduate dissertation – Mr Herma Mans.


5.4.3     MHSC/ New Projects


  • MHSC Centre of Excellence (CoE) is hosting a closed session on 29 January 2018 between all of the CoE primary service providers (UP, Wits, CSIR, NIOH etc) to discuss the upcoming new projects (25+).
  • Goal is to kick-off projects by April 2018 (proposals to be submitted in February 2018).
  • Projects will be allocated to service providers based on capacity and skills (determined by audits conducted by Ernst & Young on behalf of the MHSC).
  • Allocations will include portion towards HDSSA institutions, companies and individuals.
  • A key difference is the proposed collaborative nature of the projects, it is understood that on most projects there will be collaboration between the primary service providers, as well as secondary HDSA service providers.


In his concluding remarks, Prof said the Department of Mining Engineering at the University of Pretoria is fully committed to the internationalisation drive in terms of teaching and learning expertise development and research. The Department of Mining Engineering is fully committed to the collaboration drive between the mining universities and other institutions in South Africa for the benefit of the mining industry in South Africa at large. Collaboration forms a critical part in the upskilling of graduates in terms of research capabilities. The Department is open to any other further suggestions and initiatives to further enhance this collaborative drive.


6.         Visit to the Council for Geosciences (CGS) National Core Library


The Committee was welcomed by the CEO of Council for Geosciences, Mr M Mabuza. He gave a background on the location of the Core Library for CGS. He handed over to a Geologist who was busy with her PHD on the Micro-PIXE characterisation of uranium occurrence in the coal zones and the mudstones of the Springbok Flats Basin, South African.


7.         Visit to CSRI Klopperbos (mine dust research and education)


Dr Thulani Dlamini, CSIR Chief Executive Officer welcomed the delegation and applauded the Committee for visiting the CSIR.


Mr Johan le Roux, Implementation Unit Executive Director gave an overview of Kloppersbos. He indicated that Klopperbos mine explosion facility was established in 1987 to research coal dusts and its potential to intensify underground methane explosions in SA coal mines. Valuable research outcomes leading to development of coal mine safety policies, procedures and systems: Characterisation of coal dust explosibility. Inertisation with stone dust, patented and internationally implemented bagged stone dust explosion barrier, scientific evaluation and validation of active suppression systems. In the late 1990s there has been a decline in research funding which resulted in focus shift to mine safety awareness training.  The facility is owned by the DMR and managed by the CSIR since its establishment.


7.1        Legal Agreements


The following Memorandum of Understanding (MoA) were signed:


  • 04/12/1985 MoA (1) between Department of Public Works; Department of Defence; CSIR & SABS to set up & operate certain test facilities on Paardefontein 99-year lease for ten-rand pa).
  • 18/08/1986 MoA (2) between Government Mining Engineer and CSIR for the establishment of a facility to do research into gas and coal dust explosibility.
  • 08/08/2001 MoA (3) between CSIR and Minister of Minerals and Energy for fund of R1000 000 pa fir 5 years.



7.2        Kloppersbos current services


The following services were reported:


  • Mine fire and explosion safety training seminars (>4000 miners per year).
  • Evaluation of explosion suppression products and systems.
  • Explosibility characterisation of a coal dust and industrial dusts found in various industries (mining, food, agriculture, pharmaceutical).
  • Simulation of underground ventilation scenarios.
  • Evaluating the fire retardant properties of conveyor belts.


7.3        Challenges


The following challenges were highlighted:


  • Ageing research infrastructure.
  • Existing sources of funding not sufficient to sustain and enhance.
  • Need to strengthen scientific and engineering capacity and activities.
  • Management agreement and arrangements with DMR not in place (new arrangements under discussion and require urgent finalisation).


7.4        Future plans – Kloppersbos business plan


  • Upgrade of research infrastructure – MHSC CoE seed fund (5 upgrade projects, value approx. R9.5 m, awaiting contracting).
  • Expand scope of mine safety awareness training offering.
  • Develop Kloppersbos into an accredited academic training, research laboratory and testing facility in collaboration with Universities.
  • Re-establish research testing capabilities.
  • Build and develop human capital in critical skills.
  • Promote increased awareness of the facility and its capabilities within mining and other industries.


Mr Isaac Mthombeni, Kloppersbos training facilitator gave presentation on the fire and explosion safety in mines followed by the fire and explosion demonstration.


8.         Visit to CSIR Mining Precinct (Comro Carlow Road)


Prof M Hermanus welcomed the delegation and tendered apology for Dr Dlamini, CEO for not being part of the CSIR team due to prior arrangements.


Mr Rudi Dicks from the Presidency reported on the Mining Phakisa and progress. The following challenges were reported:


  • The dramatic decline in commodity prices was leaving many South African mines exposed as being inadequately competitive.
  • Easily accessible resources, especially in gold are becoming depleted and there is a need to develop new technologies to access deeper levels.
  • There was a need to improve safety.
  • Certain bulk commodities can no longer compete with cheap global producers, South Africa needs to beneficiate much of its product to differentiate itself.
  • Industrial relations in many mines are fraught which make the repositioning of the industry difficult.
  • South Africa’s mining technology development capacity both in design and manufacture has been degraded, although a foundation for development remains
  • Relationships with mine proximate communities are often conflict ridden threatening the sustainability of operations.
  • Bulk of gold and platinum reserves are not minable with existing technologies.
  • Both gold and platinum mining’s output will hit a cliff in the next decade using existing mining systems.
  • Need to implement a step by step programme to design and manufacture systems capable of operating well beyond existing depths.


The Mining Phakisa is a holistic programme to develop the mining cluster whilst securing and improving the livehoods of all key stakeholders. Post the Phakisa, collaborative interventions have taken place to Advance the Cluster. The former headquarters of the COMRO and CSIR Miningtek in Carlow Road forms the Mining precinct to coordinate Phakisa activities. The Mining precinct is the 1st tangible deliverable, Public Private Partnership (PPP) working toward advancing the mining cluster.


Mr Navin Singh, CSIR Manager gave presentation on the South African Mining Extraction, Research, Development and Innovation Strategy (SAMERDI) strategy. 

Cross Cutting Initiatives


Advance Orebody- the ability to “see” ahead of the rock.

  • Increase safety
  • Increase efficiency by knowing where the reef is.

Real-time Information Management Systems – converting information to knowledge and wisdom.

  • Information is collected, processed and managed to allow for proactive and predictive decision.

Successful Application of Technologies MAP – understanding why technologies either work or fail and its impact on people.

  • Understanding the pitfalls when technology is implemented.
  • Change management principles.


Mr Singh reported that R240 million funding was secured from the National Treasury (via DST for a 4-year plan) & Industry (funding per calendar year). Industry focussed & approved business plans developed. The Governance model established. Working in collaboration with Mining Universities (UJ, UP& Wits). Other universities (in particular HDEIs) will be the focus as programmes develop.


With regards to R&D and Industrialisation, it was indicated the R&D program should not be viewed as distinct from the industrialisation program. Presently a focus on localising and customising existing technologies through engaging with local Original Equipment Manufacturers (OEMs) to innovate in an iterative manner (especially in the modernisation program). As “mechanisation” technologies mature, they will be commercialising through partnerships with SA OEMs.


Mr Yusuf Timol from the DTI and Dr Paul Jourdan from Mining Equipment Manufacturers to South Africa (MEMSA) gave presentation on the progress on advancing the cluster. He explained that mechanisation of narrow reef hard rock mines allows for South African Mining Equipment Manufacturers to establish global leadership in narrow-reef, hard rock mining systems.


The aim is to:

  • Increase local content in current procurement.
  • Partnering with Global OEMs.
  • Incentivise local manufacturing to strengthen SA manufacturing capability.
  • Develop Tier 2 and Tier 3 suppliers.
  • Local OEMs exporting narrow reef hard rock mining systems.


Dr Edwin Ritchken presented sustainability and Industrialisation Initiatives. On the issue of procurement Leverage, it was indicated that mining companies needs to achieve four objectives which are to:


  • Provide support to grow small enterprises to a medium scale.
  • Create economic opportunities for entrepreneurs from communities surrounding the mine.
  • Drive transformation across all suppliers.
  • Develop and localise new technologies in South Africa.


With regards to mining supply chain capability, the challenge is that supply chain planning capability is extremely immature in the mining industry. There are no product naming, numbering and classification standards within the supply chain meaning that it is difficult to aggregate expenditure on products and services. No digitalised communication between operations, inventory, procurement and suppliers Given limited business integration, the total cost of ownership performance monitoring is largely absent. Strategic and tactical demand planning is non-existent, and there are many ad-hoc-procurements systems.


There is an urgent need to intervene in developing standards and provide training. However, firm by firm process re-engineering is required. Ultimately the Precinct has to build the capability to drive supply chain development in the industry.


In conclusion, Mr Singh said the Phakisa provided a platform for stakeholders to have a structured dialogue around challenges facing the mining cluster. The Mandela Mining Precinct & MEMSA,  Public- Private Partnership demonstrates the commitment of stakeholders to advancing the Cluster. The technology interventions should not be viewed in isolation, the Mandela Mining Precinct at Carlow Road is driving integrated programmes to ensure that the welfare of all stakeholders is advanced.  


9.         Visit to Mining Research facilities at Wits University


The Parliamentary delegation was welcomed by the head of the School of Mining Prof Cuthbert Masungwini and Prof F Cawood (Director Wits Mining Institute).  Prof Masungwini expressed the faculty’s appreciation for the visit as it was the first time for the school to host a delegation from the legislature.


A profile of the University was presented where it was stated that Wits is one of the top three universities in South Africa (Wits and UCT are consistently rated among the top 200 universities in the world. It was explained that the school of Mining also has collaborative programmes with previously disadvantaged Universities e.g. Uni Ven, which allows students to complete their budget studies at Wits.


Wits Mining faculty has an enrolment of 850 students (600 undergraduates and 250 post graduates. The School has a mandate to focus on the future mining, which is supported by the Digi-mine project, the project promote intelligent and safer mining through the use of digital technology in mining.


Sibanye Stillwater mining laboratory is one of the flagship project underpinning digi-mine research agenda, it is based on the philosophy that anything digital can reduce mining risk and enhance safety.


Research agenda for the Centre for Sustainability in Mining and Industry was also introduced, the agenda is based on the following:


  • People in Mining.
  • Artisanal and Small Scale Mining.
  • Reconceptualising Mine closure.
  • Policy and Regulation.
  • Health, Safety and Environment.


Centre for Mechanised Mining was also presented to the delegation, it was explained that its agenda is underpinned by:


  • Mine modernization.
  • Mining methods.
  • Geo Metallurgy.
  • Systems and regulation.
  • Health, safety and Environment.


It was explained that the skills agenda forms the bedrock of the envisages 21st century mining, which covers Professional, Technician and Artisanal skills that will be required in order to successfully transition from current mining methods to the digital mining era.


10.        Visit to SA Diamonds and Precious Metals Regulator


The Acting Chief Executive Officer, Mr Xolile Mbonambi welcomed the delegation.


10.1      Visit to the Diamond Factory


The Committee visited one of the diamond factories in Johannesburg. The delegation was welcomed by and taken through a process of converting unpolished diamonds through cutting, fabrication and polishing into a finished product.


10.2      Overview of Core Regulatory Compliance Business Units


General Manager: Regulatory Compliance gave presentation on the Licencing and Compliance requirements which are: police clearance certificate, tax clearance certificate, technical knowledge, financial ability, proof of business address, business plan inclusive of Broad Based Socio Economic Empowerment (Pillars of the Mining Charter), SA registered company and NEMA Requirement especially for precious metals.  Diamond and Precious Metals Value Chain was presented.


10.3      Precious Metals and Beneficiation


The Precious Metals and Beneficiation Division has two main functions:

  • Ensuring Compliance with the Precious Metals Act, 2005 through inspection and register monitoring and analysis;
  • Promoting beneficiation of precious metals through adjudication of export approval, import permits and minted bar manufacturing applications.


10.4      Premises Inspections


10.4.1   New Premises Inspection

  • New premises inspection is conducted when a new applicant has applied for either one of the licenses issued by the SADPMR.
  • On a new premises’ inspection, the precious metals inspector will verify if the proposed business address is the same as the one indicated in the application.
  • The inspector will verify if the new applicant possesses the necessary equipment to conduct the business as stated in the license.
  • The inspector will also check if the new business premises is equipped with safe storage for precious metals (e.g. safe).
  • The Inspector will finally fill a template from for premises inspection indicating the suitability or lack thereof of the applicant to conduct precious metals business.


10.4.2   Follow up Inspection

  • Follow up inspections are conducted at premises of already existing licences to see if they still comply with the conditions stipulated in their licences by the regulator.
  • A standard template is also filled by an inspector for follow up inspections.


10.5      Diamond Inspectorate


It was indicated that Section 80 (1) of the Diamond Act (Act 56 of 1986) made provision for the appointment of inspectors to ensure compliance of the diamond licences. Functions of the inspectors are as follows:


  • Approval of New Business Premises.
  • Follow up inspections.
  • Field (Mine) inspections.
  • Inspection on Diamond Trading Houses.
  • Airport Inspections.
  • Attendance of Workshops.
  • 80/20 Rule in terms of the 26 (h) compliance for Beneficiators.

10.6      Status of Precious Metals Industry


It was reported that despite the weaker rand, there was an improvement in Gold fabrication in 2016/17 compared to previous 3 financial years. The increase is attributed to higher demand for investment products such as minting coins and minted bars. PGM fabrication remained flat for the past 2 financial years compared to prior years due to a weaker global auto catalyst market.


10.6.1   Diamond Industry Challenges

The following challenges were outlined:


  • Decline in local beneficiation of Diamonds: the cutting and polishing industry has been dwindling in the past few years and jobs have been lost.
  • Access to start-up capital or funding for HDSA: Mainstream financial institutions consider mining and minerals beneficiation sectors (particularly diamonds) to be too risky to finance and there are many sources of funding available to the mineral sector.
  • Access to international markets for polished diamonds by small beneficiators: The diamonds industry value chain is restricted to small grouping (çartels”0 hence market structures.
  • Shortage of relevant skills: SA needs to grow and enhance the existing skill base to include cutting and polishing of small diamonds (melle).


10.7      The Diamond Exchange and Export Centre (DECC)


It was established by the South African Diamond and Precious Metals Regulator in term of section 59 (b) of the Diamond Second Amendment Act, Act 30 of 2005. Its function is to facilitate the buying, selling, exporting and importing of diamonds in the Republic. Diamond Producers, Dealers, Beneficiators and Permit holders can trade at the DECC on rough diamonds tenders, exports and imports. For polished diamond tenders, export and imports, the trading is open to all. Requirements for rough diamond exports and imports were outlined.


10.8      Finances


The CFO presented the overview budget summary. The approved budget for 2017/18 financial year is R112 million. The adjustment allocation is R65.9 million transfer payment and R46 million for the sale of services. In augmenting a shortfall, SADPMR has obtained the National Treasury’s approval to retain and utilise accumulated surplus for capital projects and other contractual obligations.


The total Revenue recognised as at 31 December 2017 was R79.7 million with the transfer payment o R41.8 million and sale of services amounting to R37.9 million. In delivering the planned objectives, the entity has spent R75.2 million: R55.1 million to compensation of employees, R18.1 million to other operating expenditure and R2 million to non -cash expenditure


11.        Visit to the State Diamond Trader (SDT)


The Acting CEO, Mr K Menoe welcomed the delegation. The visit was mainly to come and see the operation of the SDT. The Committee met with the learners at the premises and they shared their experience on the internship programme being undertaken. The Committee also met with the clients who have managed to establish their own independent diamond businesses through working with the State Diamond Trader. They indicated that they are struggling with  funding for capital and the SDT is doing all in their power to assist.


12.        Findings


The Committee made the following observations:


  • There is a high rate of unemployed mining engineering graduates (about 300 from the University of Pretoria alone).
  • HDSA applicants are unable to fully comply with authorisation requirements of the SAMRAD system within stipulated times because computers are scarce in rural areas and because the system is not friendly to those who want to apply for rights.
  • Educational incentives of the Mining Qualification Authority have unintended consequences of creating an oversupply of undergraduate mining graduates at the expense of post graduates (who are critical for research).
  • There is a glaring contradiction between the strategic goals of the DMR to promote mining, to those of the Environmental Affairs Department of protecting the environment (e.g. declaring 50% of a province a protected area).
  • Creation of a strong domestic capture market is a major stumbling block in the establishment of a viable precious metals beneficiation industry in the country.
  • There is a significant number of previously disadvantaged niche jewellery manufactures, who are doing a sterling work and are not getting the appropriate exposure locally.


13.        Recommendations by the Committee


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


  • Mining Phakisa programs should be tailored in a manner that allows for the absorption of unemployed engineering graduates.
  • DMR should adopt special measures to deal with obstacles faced by Historically Disadvantaged South Africans (HDSA) when using SAMRAD system in respect of accessibility and the lack of “user-friendliness”, in order to improve compliance levels.
  • Mining Qualification Authority bursary schemes should strike a balance in facilitating the production of both post as well as undergraduates and attend to the need of recipients for stipends during their studies.
  • The DMR should work more closely with the Department of Environmental Affairs to ensure a closer alignment of strategic goals and avoid unnecessary contradictions, when the DEA makes regulations and proposes laws that directly impact on mining.
  • The SADPMR should introduce more programs that will deal with the creation of a strong domestic market for polished diamonds; this must be done in conjunction with the private sector.
  • In crafting its marketing strategy, the State Diamond trader should accommodate plans to promote products in both the domestic and export markets.


14.        Conclusion


The Committee extends its thanks and appreciation to the DMR, the entities and stakeholders who attended and hosted the meetings during the oversight visit. Oversight visits are extremely important elements of the Committee activities and inform its assessment of how effectively the Executive is implementing its strategic and annual performance plans.


Report to be considered.



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