ATC200605: Report of the Select Committee on Land Reform, Environment, Mineral & Energy on the Budget Vote and Annual Performance Plan 2020/21 of the Department of Mineral Resources and Energy – Budget Vote No 34, dated 22 May 2020.
Report of the Select Committee on Land Reform, Environment, Mineral & Energy on the Budget Vote and Annual Performance Plan 2020/21 of the Department of Mineral Resources and Energy – Budget Vote No 34, dated 22 May 2020.
The Select Committee on Land Reform, Environment, Mineral & Energy having considered Budget Vote: 34 and Annual Performance Plan 2020/2021 of the DMRE, reports that the committee met with the department on 22 May 2020, where the department briefed the committee on the matter of its Strategic Plan, APP and Budget.
The briefing session was focused on the interests of the Select Committee. Most of the Department’s mandate, including its entities, are national mandates and therefore of limited overlap with the committee’s priorities. The Department did not present any details of the entities, but provided a brief overview of its budget allocations to programmes, followed by a question session where members were able to focus on aspects of the Department’s mandate of greatest interest to the committee. These included:
• Economic development of mining-affected communities, including communal land through the integration of Social and Labour Plans with local government IDP and LED;
• Addressing challenges with consultation – especially with mining-affected communities;
• Energy supply, the provision of support to municipal infrastructure programmes and aspects of the IRP 2019;
• Mine safety and occupational health of people employed in the mining sector, including the impact of Covid-19 in the mining sector;
The Minister, in his opening remarks, introduced his new streamlined department consisting of the former DMR and Energy portfolios. The Minister further stated that both the department and the mining industry was dealing with challenging situations caused by Covid-19. Localised cases of mineworkers testing positive for the virus was attributed to asymptomatic individuals returning to work or mine operations where the correct safety protocols were not followed. The minister emphasized the importance of the minerals and energy sector in catalysing the economic recovery of the country, reaching the NDP targets and fighting social inequity. He warned that the downgrading to junk status that happened recently would negatively affect the attractiveness and investment in the sector. All planning post Covid-19 has taken place based on the existing budget allocation, but the Minister acknowledged that the department and is awaiting a potential the revised budget revision from National Treasury. The Minister finally also highlighted that the department has improved the management of all of its entities through the appointment of the required Boards and C.O’s at each entities. The management of the entities, which was criticised for weak leadership in the past, is now considered to be normalised.
The department clarified that it is in the process of identifying programmes and projects that have implementation dates that can be delayed into the next financial year in order to redirect funds for the Covid-19 response. If any funding is redirected, the department will amend its targets to be re-aligned with modified expenditure plans.
Discussions around the implementation of the IRP 2019 clarified that government is still focused on investing in nuclear energy, but not on the same scale as before. The current call for proposals is for a 2500MW unit that is modular in design to allow for replication or upscaling, and which will fall within the cost parameters that the country can afford at present. The department, through the minister, confirmed that it would still take a significant amount of time before many rural communities could be linked to the national grid, and that off-grid options will be implemented under such situations first. The department further acknowledged that one of the options considered for these areas are small or micro-grids, and that the development of such grids could provide opportunities for local entrepreneurs to be supported to become Independent Power Producers supplying renewable energy solutions until such a point in time that a connection to the national grid is possible.
Remaining on energy supply matters, the department responded to questions related to the commitment of government to allow municipalities in good standing to procure their own electricity. The amended regulations were submitted for public comment two weeks ago. After submissions are reviewed, the Department plans to publish final amended regulations by the end of July. This will enable municipalities to procure electricity in line with IRP 2019 guidelines and requirements.
The department’s presentation highlighted an uneven distribution of support given through municipal infrastructure grants to municipalities providing solar geysers to residents. When questioned about this, the department explained that municipalities are required to motivate for support. The department does no earmark areas for investment and therefore the distribution of grant expenditure is a function of municipal applications only.
The committee will still be briefed in detail on the phased re-opening of mines in the country, but the committee received a brief update on the topic. Opening will be phased, with deep mining being the last type to be re-opened. Department regulations, together with those issued by the Department of Health, were communicated to all mines and will guide the process. Where spikes in Covid-19 positive tests have occurred at mines, it was attributed to breaches in operating conditions, or as a result of asymptomatic miners returning to work. Where mines were found to be operating without adhering to the safety regulations, the mine was shut and all workers screened. Under other circumstances, mine workers that tested positive were quarantined. The Department also performs unannounced visits to mines to determine whether regulations are followed. In conclusion, the Department conceded that adequate testing capacity remains a problem.
When asked why the department did not approach the eradication of fraud and corruption within the department with a 100% target, the committee was informed that the target has to take into account the investigative phase of more complex cases, which includes outside department that cannot be held to account by departmental targets. These cases needed to investigated thoroughly and therefore the department assigned a 95% target to the outcome – expecting that 5% of cases will take more than one year to resolve.
The committee raised its concerns over safety for women in mining after the department’s brief highlighted the challenge. The department outlined its plans to improve safety for women, which includes as an important component, the organisation of regional forums where women can form a central part of planning for improved safety standards.
The challenge of illegal mining and the development of small-scale mining opportunities were briefly discussed. The illegal trade in many of the minerals that are focused on in illegal mining operations is being investigated. The department considered the creation of a special investigating unit to look into illegal mining and mineral trade as the best way to contain illegal mining.
In a related matter, the issue of mine safety in terms of rehabilitation and derelict and ownerless mines were also discussed. The department highlighted that mines earmarked for rehabilitation was selected using set criteria for ranking these mines, and that public safety was also taken into account when mines are identified for rehabilitation. The committee was assured that health and safety risks associated with these mines was a high priority for the Department.
Concerning the alignment of Social and Labour Plans (SLPs) with municipal IDP and LED, the department stated that it operated under the assumption that municipalities have adequately consulted with communities before finalising these plans. The department supplies mining companies with municipal plans, but does not prescribe the detail of each plan. It does assist with the consolidation of SLP projects into larger, integrated projects rather than a larger number of fragmented plans with little impact. It further expects that where mining communities reside on communal land, liaison between the municipalities, mining companies and traditional leaders would result in suitable SLP projects implemented on communal land. The department expressed a concern that it considered the ownership of projects on communal land a greater problem than their initiation. The committee was also reminded of the fact that those communities residing on communal land affected by mining benefits from royalty agreements with mining companies.
The Select Committee on Land Reform, Environment, Minerals & Energy having considered Budget Vote: 34 and Annual Performance Plan 2020/2021 of the Department of Minerals Resources and Energy, reports that the Committee has concluded its deliberations thereon.
Report to be considered.
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