Budget Vote debate in the National Council of Provinces
30 May 2006
Chairperson
Colleagues
Members of Parliament
Ladies and Gentlemen
Introduction
I stand before you today on my last day as the Minister of Minerals and
Energy; I am also informed that this is first time the Department of Minderals
and Energy (DME) budget vote has come to the National Council of Provinces.
Honourable Members it has been an exciting and interesting few months in this
sector, and I believe that we have accomplished a great deal over this
period.
Highlights and Challenges from 2005/6
Some of the highlights during the past year include:
1. At a macro level we have seen a global commodity boom which has dramatically
increased the prices of minerals mined in South Africa, in particular platinum
group metals and gold. These high prices have favourably impacted on the South
African mining sector and our economy.
2. The passing of the Diamond Amendment Acts and the Precious Metals Act, that
are set to contribute positively towards greater levels of beneficiation in our
country herald a new dawn to beneficiation in our country. We have also been
working very closely with industry in running commodity workshops in order to
develop strategies with industry players for the effective use and
beneficiation of our minerals.
3. The launch of the Small Scale Mining Chamber in July 2005; an organisation
that aims to support small-scale mining in the country. This launch took place
with the support of the DME, and our department continues to offer support to
small-scale miners.
4. The announcement of a number of broad-based black economic empowerment
deals, which were effected largely as a requirement of our legislation. Our
department has had to be vigilant to ensure that these deals are indeed broad
based and they involve women.
5. The hosting by South Africa of the annual African Mining Partnership forum,
which involves a number of my colleagues from other African mining countries
coming together to interact and collaborate on projects for the growth of this
sector in Africa. The hosting of the African Hydropower Conference to look at
improved regional collaboration on the use of water for energy purposes. There
have also been a number of other bilateral and multilateral interactions
between DME and our African colleagues in order to promote economic development
in line with our New Partnership for Africaâs Development (NEPAD) programme.
The co-hosting of the World Petroleum Congress, which held in Johannesburg and
for the first time on African soil; this congress brought together major
international players in the oil and gas sector.
6. This past year saw the fatality rate on mines drop by 16%, from 0.25
fatalities per million hours worked in 2004, to 0.21 in 2005. We have seen,
likewise, the injury rate dropping by 8%.
7. DME has over the past year increased the speed at which mining license
applications are dealt with, and we are overcoming the backlog we experienced
by improving the administrative structures dealing with applications. Last year
we received 6785 applications, of which 957 were rejected mainly for being
incomplete; 191 were withdrawn; 861 refused for noncompliance with the Act;
with 912 issued. The balances of the applications are still in the
system.
8. There has also been a great deal of progress over the past year with the
electrification programme, with over 150 thousand houses having been connected.
I was fortunate enough to have officiated at âSwitch-Onsâ in the Taung District
of the North-West Province.
9. The Department of Minerals and Energy has also made a number of gains during
the past year in improving the environment. This saw us introducing cleaner
fuels, which have been remarkably well received by consumers; and it saw us
participating in CSD 14, a United Nations Conference on Sustainable
Development.
Honourable Members, there were also a number of challenges that we
experienced over the past year in particular electricity outages in the Western
Cape, and the fuel shortages. Umnyango wami uzithathela phezulu lezinselelo
zokushoda kukagesi eNtshonalanga Kapa kanye nokushoda kuka petrol. Lenselelo
izosisiza ekuqhubekeleni phambili ukwenza ngcono isimo sokutholakala kwamandla
kagesi.
DME Budget
The budget of R2,548 billion I table today in the NCOP will go towards
continuing the good work that has been done over the past year, as well as
addressing some of the challenges that face this department. I would like to
outline some of the key issues for the DME during the 2006/07 financial
year.
Regional offices
The Department of Minerals and Energy has offices in each of the nine
provinces. In addition to receiving and processing mining rights applications
for their region, the function of these offices include assisting with small
scale mining operations, mine health and safety inspections, as well as
providing support on provincial energy issues.
These provincial offices are critical to the effective outreach of the DME
and the work that they are doing in communities is to be commended.
SMME Development
As a department we have committed ourselves to paying special attention to
supporting Small, Medium and Micro Enterprise (SMME) through sustainable
interventions. The department is in the process of finalising our strategy on
the support of SMMEs. In the past, our approach to SMME support has been
decentralised within the branches in the department. We believe that
consolidating the strategy at departmental level will enable us to monitor and
improve on our performance.
The regulatory framework that is being developed will form the basis of
interventions that we will be making in our quest to support SMMEs. Internally
this will cover basic issues such as improving our turnaround time for the
processing of payments submitted by these SMMEs, ensuring that our support
initiatives are sustainable, as well as creating the synergies with other
government institutions and facilities. Our programmes will focus on
rehabilitation, small-scale mining, jewellery fabrication, other forms of
beneficiation and mineral value addition, electricity and liquid fuels, and
general procurement. Our beneficiation programme will be closely aligned to our
small business support initiatives.
Mine Health and Safety
Chairperson, a very important function of the Department of Minerals and
Energy is the Mine Health and Safety inspectorate. They have been working
closely with industry and worker unions to reduce the incidence of mine
accidents; and there have been major improvements over the years and
stakeholders have committed themselves to continuously reduce fatalities by at
least 20 percent per annum. The Mine Health and Safety Inspectorate has also
embarked on a national strategy to eliminate silicosis and noise induced
hearing loss or occupational deafness by 2013. These efforts will help reduce
the social costs of diseases and injuries particularly to vulnerable
communities.
Environment
Honourable Members, our long history of mining has left a legacy of
environmental degradation; and we have a situation where a number of mines were
abandoned. These ownerless and derelict mines need to be rehabilitated, and the
DME is to spend R71 million towards this activity. Members would recall that
the new mining legislation requires existing mines to make plans and provisions
for the rehabilitation of their mines so that we do not perpetuate the mistakes
of the past, and are therefore able to protect our environment for future
generations.
There are also ongoing problems of mine water, particularly in the
Witwatersrand mines; these problems have necessitated the intervention of the
Department of Minerals and Energy and R32 million has been allocated to the
water pumping subsidies in this financial year.
Electricity
Chairperson, Honourable Members, the issue of the outages in the Western
Cape has thrown the electricity capacity of the country into the limelight.
Where in the past few people knew how many mega watts we need in the country,
or what our reserve capacity is; we now have many people debating these
important issues. However, there is a concern from our side that there is a
great deal of misinformation and inaccuracies being put forward as fact. I
recently met with the Chairpersons and CEOs of energy companies, the energy
regulator, other government departments, research institutions and associated
institutions to discuss these issues; and we agreed that there is sufficient
capacity in the country and there is no need for panic, however we are fully
aware that the reserve margins are tight. And going forward new infrastructure
and plants will need to be built.
The need to ensure we have sufficient energy for our present requirements as
well as to meet our AsgiSA targets is foremost on our agenda; and as the
Department responsible for energy policy we are taking steps to ensure that we
have sufficient capacity, and our forecasts are accurate. New peaking power
plants are being planed for KwaZulu Natal and Eastern Cape. These will be built
by Independent Power Producers, and are in addition to the demothballing and
new power plants being built by Eskom.
Ukongiwa kogesi
Ukongiwa kogesi kungenye yezinto ezimqoka ikakhulukazi emva kwezigigaba zase
â Koeberg, lapho kuphehlwa khona ugesi kusetshenziswa inuzi. Njengoba sikhuluma
nje, miningi imizamo yokonga ugesi eseyenziwe khona lapha eNtshonalanga Kapa.
Okusemqoka ukuthi kudingeka sizifundise ukuthi ukonga ugesi, kube yingxenye
yezimpilo zethu yansukuzonke.
Mphathi Sihlalo, ngizocela ukuthi qaphu qaphu nje ngokwenziwa izakhamuzi
zakuleli ekubambeni iqhaza ekongeni ugesi:
1. Abaphathi besifunda sase Ntshonalanga Kapa, behlangene nomkhandlu
wedolobha lase Kapa, u Eskom kanye nezakhamuzi zakuleli, basibonisile
ukubaluleka kokubambisana. Umkhankaso wokushintsha ama globe asebenzisa ugesi
omningi usuqalile ukubonakalisa izithelo. Izigidi ezinhlanu zama globe adla
ugesi omncane ziye zafakelwa emizini engaphezu kwezinkulungwane ezingamakhulu
amathathu mahhala. Lomsebenzi ongaka uye waveza amathuba omsebenzi kubantu
abangamakhulu amathathu. Uma sihluleka kulokhu, cha sesizoyibika ke njengoba
kusho isiZulu.
2. Olunye uhlelo olusha lubizwa ngokuthi i-Power Alert, mina ke ngizolubiza
ngokuthi amarobothi, ngoba lukhombisa imibala ecishe ifane namarobothi.
Loluhlelo lusebenza kanje. Umabonakude ukhombisa isimo sikagesi ngokubonisa
umbala oluhlaza njengotshani, ophuzi, obomvu kanye nontsundu. Lemibala
ikhombisa ababukeli lokhu:
* oluhlaza, usho ukuthi konke kumi ngomumo;
* ophuzi, uthi qaphela, lungela ukucima ezinye izinto ezisebenzisa ugesi;
* onsundu, wona usho ukuthi izinto ezidla ugesi omningi, njengama geyser,
izitofu, amaheater kanye namaketelo asebenza ngogesi mazicinywe;
* uma usubomvu, usho ukuthi lindela ukucinywa kukagesi noma yinini.
Olunye uhlelo olubaluleke kakhulu kimi elokukhuthaza abantu ukuthi
basebenzise i gas. Mphathi Sihlalo, kungabe angiwenzanga umsebenzi wami uma
nginganitsheli ukuthi umsebenzi wokwaluleka umphakathi ngokusebenzisa igas
ngendlela ephephile usemningi. Bakithi, asingakhohlisani, igas iyabiza kungakho
enye yezinto ezimqoka ebengizimisele ukuziqondisa, ukulungisa inani lentengo
yayo. Inani legas lingenye yezinto esesivumelane ngayo sino dadewethu U Buyelwa
ukuthi uzoqhubeka ayibukisiseUkufakelwa kogesi
Engizokukhumbula kakhulu ngesikhathi sami njengo Ngqongoshe wezokumbiwa phansi
namandla ukulethela abantu bakuleli ukukhanya emizini yabo. Ukungabikho
kukagesi emizini eminingi kungenye yezinto ebeyingilethela izinyembezi.
Injabulo ebengiye ngiyibone emehlweni alabo abaqalayo ukuthola ugesi ibingenza
ngibe namahloni ngoba kimi ugesi ungenye yalezozinto ebengingazihluphi
nokuzihlupha ngayo empilweni yami ngoba kgakhula ngawo.
Nizokhumbula ukuthi uPresident Mbeki uthe â Ngonyaka ka 2012, bonke abantu
base Ningizimu Afrika bazobe benogesi, igas kanye nezinye izinhlobo
zokufudumeza ikhaya ngokwesimanje.â Mphathi Sihlalo, ukuze sikwazi ukufeza
lesethembiso, kudingeka sibe nemali. Njengamanje, sithola u R1.4 billion sibe
sidinga u R2,5 billion ukuze sikwazi ukufeza lesethembiso. Mphathi Sihlalo,
ugesi awulethi ukukhanya nje kuphela, kodwa, usiza osomabhizinisi abafufusayo,
usiza abantwana besikole ukuthi bafunde isikhathi eside ukuze imiphumela
ibengcono, kodwa okubaluleke kunako konke, usiza ekuletheni imitholampilo
eduzane nalapho sihlala khona. Ngakho â ke, ngiyacela, bakwethu, sizani,
masenze izimpilo zibengcono.
Abantu baseNingizimu Africa basithumile ngakhoke kumele sikwenze abasithume
kona.Mgcinisihlalo, izinselelo ezisibhekile ngamandla kagesi angeke ziphazamise
izinhlelo zethu zokufaka ugesi. Eminyakeni emithathu ezayo sizokwenza
okulandelayo: Kumasipala wase Buffalo City ongaphansi komkhandlu wase King
Sabata Dalindyebo sizosebenzisa imali eyizigidi ezingu 33 ukufaka ugesi emizini
engu 12000.E Gert Sibande District Municipality ese Mpumalanga Province
sizosebenzisa izigidi ezingu 17,5 kwi Redhill Substation ukwandisa amandla
kagesi.Ngokunjalo e North West sizosebenzisa izigidi ezingu 15
E Nkandla, KwaZulu-Natal, khona sizosebenzisa izigidi ezingu 25.
Nuclear
I am aware that there is a great deal of concern in this house about nuclear
energy. The Department and the National Nuclear Regulator oversee the continued
safe use of nuclear energy, and we look forward to continued constructive
engagement on this issue, particularly as a decision will need to be taken in
the coming months on the need for a new nuclear power station for the Western
Cape.
Honourable members will recall that last year we reported on the extensive
workshops we were conducting on the radioactive waste management policy. I am
glad to report that the Radioactive Waste Management Policy has now been
approved by Cabinet, and subsequently published. The policy has created
certainty and confidence to the South African public that there is a plan and
strategy on nuclear waste management. The implementation of this policy has
started and the main activities for this financial year will be the
establishment of the National Committee on Radioactive Waste Management. As
part of our public awareness programme, the Department has published a booklet
entitled âUnderstanding radioactivity and radiation in everyday lifeâ and also
participated in various public awareness and educational activities on the
benefits of nuclear technology.
Petroleum
Chairperson, this year will see us release the findings of the Moerane task
team that I established to identify the problems that caused the fuel shortage
in December 2005. I have also appointed a task team that is looking at the
short, medium and long-term constraints in the fuel supply industry. This task
team includes members of the industry and the Department and will incorporate
the findings of the Moerane investigation.
The primary output of this task team will be an analysis of the current
downstream liquid fuels supply to the South African âmarketâ. This analysis
will show how and when bottlenecks will occur in the supply chain and what
range of remedial measures should be put in place to overcome such
bottlenecks.
It will therefore become necessary for us to consider changes to the entire
petroleum and gas value chains, which includes refineries, pipelines,
wholesaling, distribution, and retailing. Our policy review will contribute
towards a realignment of our strategy, and preventing the recurrence of
shortages whilst improving security of supply.
An important issue that we are looking at for the future is the production
of fuel from agricultural products such as sugar cane, maize or soya. These
Biofuels will help create substantial jobs in our rural areas and will
contribute to bridging the gap between the second and the first economy. The
development of the Biofuels industry is a project of, Accelerated Shred Growth
Initiative of South Africa AsgiSA and the Department of Minerals of Energy and
is co-ordinating a task team that is developing a Biofuels strategy.
BEE and Women Empowerment
Before concluding I would like to address the issue of Black Economic
Empowerment(BEE) and Women Empowerment. Through our legislative mechanisms we
have seen substantial progress taking place in increasing the levels of BEE in
mining companies. Importantly many of these deals are now broad based and new
people are starting to gain entrance into the mining and petrochemicalsâ
industry. There are still many challenges we are faced with in respect of women
gaining access to these sectors and we look forward to improvements in the
involvement of women as well as the quality of the deals, especially in how
they are structured and the financing arrangements. I am hoping that we will
see targets being set in the future for women to be included into the deals
both in equity and procurement.
Conclusion
To conclude, chairperson, honourable members I request the House to support
my departmentâs budget of R2,548 billion.
Finally, I would like to thank the Deputy Minister, Director General of the
Department of Minerals and Energy, Advocate Sandile Nogxina for their support,
and to the staff in the department for their hard work and commitment.
I thank you.
Issued by: Department of Minerals and Energy
30 May 2006
