ATC220505: Report of the Select Committee on Land Reform, Environment, and Mineral Resources and Energy on the Budget Vote and Annual Performance Plan 2022/23 of the DMRE – Budget Vote No 34, dated 5 May 2022
NCOP Land Reform, Environment, Mineral Resources and Energy
Report of the Select Committee on Land Reform, Environment, and Mineral Resources and Energy on the Budget Vote and Annual Performance Plan 2022/23 of the Department of Mineral Resources and Energy (DMRE) – Budget Vote No 34, dated 5 May 2022
The Select Committee on Land Reform, Environment, and Mineral Resources and Energy having considered Budget Vote: 34 and Annual Performance Plan 2022/2023 of the Department of Mineral Resources and Energy, reports that the that the committee met with the department on 26 April 2022, where the department briefed the committee on the matter of its APP and Budget.
The committee engaged senior departmental officials on topics of concern, including the rationalisation of State owned Entities, the re-evaluation of their mandates, progress on the establishment of the Strategic Fuel Fund, the position of the Mining Charter towards BEE in the exploration field, how SMME’s are involved / included in the Minerals and Energy policy development, backlogs in the processing of mining licenses, and the rehabilitation of mines, especially asbestos Mines. Further enquiries focused on progress in investigating corruption cases reported to the committee the year before, the impact of the merger of the two departments on staff morale, updates on the proposed nuclear procurement plan, mine inspections and monitoring of social and labour plans.
In response to questions regarding investigations into the sale of Strategic Fuel Reserves, the department informed the committee that the all the oil has been recovered and that the case is in the final stages of being closed.
The committee expressed concern over the fact that the Department targets 100% elimination of fruitless, wasteful and irregular expenditure only by 2024. The Committee felt that this target is a critical financial management requirement rather than a medium-term target. The committee wanted the Department to clarify how it will approach the implementation of a framework for a just transition to a low carbon economy by 2022. The Department has to match country commitments to greenhouse gas reductions with the potential impact on the coal, oil and gas industry. The department was requested to provide the Committee with details on the framework, especially how the Department plans to balance a transition to a low carbon economy with a continued focus on opportunities in coal, oil and gas exploitation. The committee further questioned whether just transition targets are attainable as the 2019 IRP increased coal and oil use further. The Department’s targets for proposed renewable energy proposals is 4200MW over two years, but the target for coal and oil is 4500MW.
In terms of Social and Labour Plan development projects, the Committee wished to know what the impact of these projects were and what the lasting benefits have been ensured through these projects. The Department clarified that S&LP plans benefits local communities, as the construction of clinics, sports facilities, water reticulation projects and ablution facilities are typical S&LP developments.
Returning to the topic of potential oil and gas exploitation, the Department was requested to provide a timeline for the completion of the report on the viability of a shale gas industry, and when it will be released for scrutiny. The Department does not appear to be reducing its dependence on fossil fuels in this programme.
A fair amount of debate surrounded the country’s nuclear programme with the DMRE assuring the committee that the procurement of 2500 MW nuclear energy is listed in the 2019 IRP, but that the plan requires the affordability of the project to dictate the pace of procurement. The department also stated that they were evaluating the use of small modular reactors, which offers affordable, modular development of nuclear capacity.
The department highlighted the challenges it faced regarding mine inspections and the rehabilitation of Derelict and Ownerless mines. With only 120 mine health and safety inspectors currently employed, the department cannot effectively cover all the mines in all 9 provinces. The Department estimated that R3 billion is required to successfully rehabilitate the 6000 sites in need of remedial action. Currently the department’s budget for rehabilitation stands at R122 million per year, which allows the department to rehabilitate only 3 mines per annum, resulting in asbestos mines being given priority.
The Select Committee on Land Reform, Environment, Mineral Resources & Energy having considered Budget Vote: 34 and Annual Performance Plan 2022/2023 of the Department of Mineral Resources and Energy (DMRE), reports that the Committee has concluded its initial deliberation but aims to continue discussions on the matter with the Executive of the Department.
Report to be considered.