Minister Ngoako Ramatlhodi: Mineral Resources Dept Budget Vote 2015/16

Madam Speaker
Chairperson and Members of the Portfolio Committee on Mineral Resources
Honourable Members
Distinguished guests
Ladies and gentlemen

Introduction

I have the honour of presenting the Mineral Resources Budget Vote for consideration by this House. This Vote is a continuation of the task we set ourselves at the beginning of the fifth Administration in 2014, and an opportunity to deliberate on the department’s plans in the 2015/16 financial year.  

A budget of R1.618 billion has been allocated to the Department of Mineral Resources for the current financial year.

The Mining Industry and MIGDETT

Madam Speaker, this year’s Budget is presented at a time when prices of the majority of commodities have remained somewhat depressed and, in certain cases, declining below to levels that may threaten the sustainability of some operations. The Mining Gross value added declined marginally year on year, in respect of 2013-2014, by 1.5% to R227 billion, while total industry employment dropped to 493 000 from 508 000 in the same period. I remain confident that the resilience of the mining industry will ensure that we emerge out of the current climate with minimal damage to the long-term sustainability of the industry.

In order to proactively tackle issues facing the industry, we strengthened the Mining Growth, Development and Employment Task Team (MIGDETT) and streamlined its technical working streams to optimise functionality and enhance efficiencies. The MIGDETT Principals meeting, chaired by myself, provides strategic guidance on the work of MIGDETT. Stakeholders have accordingly established three work streams focusing on industry stability; transformation, growth and competitiveness, and sustainable development.

Framework Agreement on Sustainable Mining Industry

In addition, the department will continue to provide support to the implementation of the framework agreement for a sustainable mining industry. We continue to call on stakeholders to respect and implement the framework agreement. Last year we had to deal with the aftermath of the protracted platinum strike, arising from wage disputes. I am aware that wage negotiations are currently underway within the gold sector and urge stakeholders to draw lessons from experience and avoid a repeat scenario.

Notwithstanding current challenges, the DMR approved over 36 new mining right projects in the past 12 months, with a potential to create in about 6 000 jobs.

Commemoration of ex-mineworkers

Honourable Members, it is significant that I present this Budget Vote following the commemoration of our Freedom Day and during the month of workers. It also follows the commemoration of the World Day for Safety and Health at Work on 28 April 2015, a day on which the world’s trade union movement holds its International Commemoration Day for Dead and Injured Workers to honour the memory of victims of occupational incidents and diseases.

We will continue to honour the memory of those who have lost their lives in mining-related incidents, and acknowledging the important role that mineworkers have played in shaping the economy of this country. In this regard, the National Union of Mineworkers has brought to our attention a gravesite in the Evander area in the Mpumalanga province, where about a thousand mineworkers were buried during the apartheid era, and whose names and origins are unknown. Accordingly, the department will collaborate with other stakeholders to ensure that decent monuments are erected for them. 

Mine Health and safety

Honourable members, we will continue working tirelessly to ensure that the goal of zero harm on mineworkers is ultimately achieved through intensifying monitoring and enforcement measures. This has resulted in improved health and safety of the workers at the mines. In this regard, there has been a reduction of about 86% in fatalities reported by the mines since the dawn of democracy from 615 in 1993 to 84 in 2014.  

In fact 2014 was the safest year ever for the mining sector with the lowest fatalities of 84 recorded. This year up to the 31 March, figures show that there has been a 41% reduction in fatalities when compared to the similar period during 2014.

Having said that, I remain concerned about the number of deaths in the mining sector as a result of occupational diseases which include Pulmonary TB, silicosis and Noise-Induced Hearing Loss. I call upon the industry to place greater emphasis on these matters. In this regard, the Mine Health and Safety Council will continue to monitor the situation to ensure that the November 2014 Mine Health and Safety Tripartite Summit commitments and action plan are implemented.

Honourable members, the department also continues to be greatly concerned about the health and safety of women workers including the inhumane treatment by fellow workers in some of the mines. As a department, we will continue to take appropriate measures to ensure that women have a safe and dignified working environment.   

The department has through the Mine Health and Safety Council conducted research on security matters involving women in mining and based on the outcomes, a guideline and awareness materials will be developed to assist the industry on how this matter should be handled.

Also, the regulations on refuge bays which require all underground mines to have life sustaining chambers have recently been gazetted. The use of these bays has also assisted in the rescue of about 486 mineworkers during a recent fire accident at one of the gold mines. 

Legislative framework and transformation

Madam Speaker, we introduced the Mining Charter in 2004, a trailblazer sector charter, in our pursuit to deal decisively with our segregated past, and to normalise society.

The interim assessment report on the implementation of the Charter was recently released. We have augmented capacity to collect data to gauge progress on implementation of transformation levers. For the first time, we deployed a web-based system of individual right-holders to submit statistical returns online. The final report has been completed, barring the ownership element, and will be released following engagements with respective stakeholders. 

I have observed concerns raised by some stakeholders who harbour reservations on the matter of declaratory order, regarding ownership. These concerns relate to the broader transformation agenda of the sector. Consequently, I am engaging with the stakeholders to find a way forward regarding this matter, appreciating the need to have regulatory certainty.

The finalisation of the Mineral and Petroleum Resources Development Amendment Bill which was referred back to Parliament last year remain a priority and the department will be available to provide any support during its processing in Parliament.

Furthermore, the Mine Health and Safety Amendment Bill which is currently being processed through National Economic Development and Labour Council (NEDLAC), will upon approval by Cabinet, be referred to this House for consideration.

I have also re-prioritised the Bill on State-Owned Mining company SOMCO for referral to Cabinet and Parliament during the current financial year. 

To ensure policy clarity on coal, I have directed that urgent work commence on the development of a coal policy framework. A task team under the auspices of MIGDETT has already commenced its work. The key objective of this process is to develop a framework for ensuring security of coal supply for local consumption, and promotion of sustainable employment, amongst others.

Madam Speaker, in his State of the Nation Address this year, President Zuma announced that a “Mining Phakisa” would be convened to deliver fast and implementable results to the country’s development priorities. It is our intention to focus the Phakisa on, inter alia, mineral beneficiation to achieve a win-win situation, the development of a programme of action to mitigate binding constraints including infrastructure as well as research and development, and to channel the output of this stakeholder process as the basis to review the Mining Strategy.

Upstream oil and gas

In respect of shale gas development, the petroleum industry experienced an unprecedented drop in prices recently. We are optimistic that the situation will over time improve and will not necessarily impact negatively on South Africa’s exploration prospects. In this regard, I am confident that our augmented regulatory framework, which draws from the global experience, will enables us to proceed swiftly. We will continue to use various platforms to engage stakeholders in dialogue on shale gas issues, as part of our consultative processes.

Incidentally, in July 2014, oil producer Total and their partners CNR, started a ground breaking ultra-deep off-shore exploration programme, targeting an oil field about 2000m below the sea floor. Drilling progressed until major technical challenges were experienced at about 500m below the sea floor. Despite current suspension of drilling as a result of mechanical challenges, valuable on-site experience was gained and in future exploration activities in ultra-deep waters.

Strengthening the department

The process of reorganising the department has started in earnest. This is intended to ensure, an efficient, and development oriented department. Further, we launched an upgrade version of the online licencing system, SAMRAD, in February. This enhancement has achieved, amomg other things the elimination of the human factor in the processing of licences.

Last year I also informed Honourable members about the streamlined integrated process for issuing licenses within a maximum of 300 days. I am pleased to confirm that from the 8th of December 2014, all applications are lodged in line with the new system. In this regard, an Enforcement and Compliance Unit has been established in the department to ensure successful implementation of the integrated licensing system. 

Skills Development

Honourable members, skills development remains a key priority for the department. Accordingly, we have prioritised the training of senior and middle managers through various programmes, with reputable institutions such as Wits Business School and the University of Pretoria.        

Furthermore, the department is collaborating with the Department of Higher Education and Training (DHET) and other stakeholders through the Mining Qualification Authority (MQA) to ensure that the skills programmes continuously respond to the changing mining landscape by improving on the skills of mining communities and labour sending areas.

The MQA regional offices are now operational in rural Technical Vocational Education and Training (TVET) colleges in the Northern Cape, Free State, Mpumalanga, North West, Limpopo and Eastern Cape. The MQA skills development programmes include Adult Education and Training (AET), maths and science, bursaries in engineering subjects, artisan training and jewellery making.

Furthermore, 1 477 unemployed youth around mining and labour sending areas are currently being trained on portable and entrepreneurial skills

Research and Development

Honourable Members, last year I reported on government’s initiatives to modernise South Africa’s geological infrastructure and ensure that the country remains competitive with regard to exploration and attracting investment. The process of upgrading the geoscientific infrastructure is ongoing and work is at an advanced stage in respect of KwaZulu-Natal, Northern Cape, Mpumalanga and Limpopo provinces. Furthermore, preparations for the hosting of the 2016 International Geological conference are progressing very well.

Over the medium term period, Mintek will focus on research and development in efficient mineral processing technologies, research and development. In this regard i am happy to report that the Mintek e-waste (recycling) project is underway. This project has potential to make South Africa a hub and a leader in recycling for Africa. Research is underway to explore the utilisation of the recovered metals in Jewellery making.

Diamonds and semi-precious stones

With regards to the diamond industry, we will continue to drive the local beneficiation of South Africa’s diamonds. As part of this, we will through the State Diamond Trader host a Diamond Indaba aimed at addressing pertinent issues relating to the industry. The South Africa Diamond and Precious Metals Regulator has developed a concept document which is currently being considered by the Board. I look forward to engaging them once their deliberations are concluded. 

Mintek’s Small Scale Mining and Beneficiation programmes continue provide training and incubation towards the development of small businesses in the fields of ceramic and jewellery manufacturing and sales. As an example, Mintek will continue training of youth, to process semi-precious stones, and assist them in developing sustainable businesses for semi-precious jewellery.

Small scale mining

Recently I undertook a series of Izimbizo in the Northern Cape, North West, and Gauteng during which I interacted with key players within the mining industry. A prominent feature of these interactions was concerns raised by small-scale miners and communities and the extent to which current interventions were inadequate. As a starting point, we will in collaboration with the Department of Small Business Development host a workshop with small-scale miners in the Northern Cape to align government interventions to their challenges.

International programme

Ladies and gentlemen, South Africa remains an integral part of regional growth. As a result, the government of South Africa is not only a founding signatory of the African Mining Vision, but is fully engaged in implementing this blueprint document through structures established to ensure its coordination.

The African Ministers Responsible for Mineral Resources Development has endorsed the African Minerals Development Centre to assist African mining jurisdictions with domestication of the Vision.

South Africa is also a member of the African Diamond Producers Association (ADPA) and has the privilege of serving as the Deputy Executive Secretariat in Angola. This structure has secured an observer status within the Kimberley Process Certification Scheme and assists with coordination of an African development agenda in multi-lateral platforms, such as the KPCS.

Honourable members, in conclusion, I am confident that South Africa remains an attractive investment destination for mining. As the Regulator of this important industry we recommit to discharging our responsibility in a manner that is beneficial to the South African economy and its people, and that as we begin this 21st year of democracy, we redouble our efforts to move South Africa’s mining industry forward.

I hereby thank the Portfolio Committee, Deputy Minister Hon. Godfrey Oliphant, the management and staff of the department led by the Director General, Thibedi Ramontja including the State Owned Enterprises for their commitment and support.

Madam Speaker, I hereby table this Budget before the House for support.

I thank you.

Share this page

Similar categories to explore