Honourable Chairperson, Mr Freddy Adams
Honourable Members of the NCOP and the Select Committee on Economic Development
Officials of the Department of Mineral Resources
Ladies and gentlemen
It gives me great pleasure to introduce to the National Council of Provinces the debate on the budget vote of the Department of Mineral Resources for the 2010/11 financial year.
On 10 May 2009, President Jacob Zuma announced the re-organisation of his cabinet and government departments. Amongst others the Department of Minerals and Energy was split into two, namely the Departments of Mineral Resources (DMR) and Energy (DOE) respectively.
Although the split was announced in May, it could only take effect administratively from 1 April 2010 since the two departments’ shared one budget. During the transitional period, my department entered into a shared support services agreement with the Department of Energy in terms of which the DMR provided support services to the DOE until the end of March this year.
I am happy to report that the transitional arrangements have now come to an end. We have restructured in line with our new mandate but, due to limited financial resources, the DMR will be implementing the approved organisational structure in phases. We intend to address our human resource challenges through a review of our integrated human resources plan.
The process of splitting the DME budget was successfully finalised in January 2010. This process culminated in final allocations of R1.030 billion for the Department of Mineral Resources.
In response to shrinking financial resources, the department introduced a number of cost containment measures and stringent controls for achievement of more with less. These included: scaling down the number of delegates on overseas trips; the suspension of international conferences and seminars; the hosting of meetings in close proximity to the department or in free venues; using public service circulars or free advertising for positions below director, and so on. We will continue on this path.
My department remains committed to sound financial management and discipline. We will continue the legacy of obtaining an unqualified audit opinion as we did in the last five years under the erstwhile DME.
During 2009/10, my department managed to channel 45 percent of procurement towards Historically Disadvantaged South Africans (HDSAs). We also conducted supplier information sessions in all nine provinces. In future we will be developing a supplier development strategy in consultation with the Department of Trade and Industry.
The mining industry continues to form the backbone of the South African economy, accounting for more than half of exports. The challenge, however, is that most minerals are exported as ores rather than high value intermediate or finished products.
In order to assist the country to leverage long-term benefits from its substantial mineral endowment, we have developed a mineral beneficiation strategy which seeks to facilitate further economic diversification, expedite progress towards a knowledge-based economy and create decent and sustainable jobs. We are now finalising our consultations on the strategy which will soon be submitted to Cabinet for approval.
Prior to 1991, mining houses in this country were not legally required to rehabilitate the environment after mining had taken place. This has resulted in a legacy of un-rehabilitated derelict and ownerless mines, which now pose significant health and safety risks to nearby communities as well as cumulative environmental impacts on the surrounding environment.
My department has prioritised the rehabilitation of derelict and ownerless mines in Limpopo, Mpumalanga, Gauteng, North West and Northern Cape. In prioritising our rehabilitation, we have been guided by the proximity of derelict and ownerless mines to communities, the health and safety risks to communities, as well as the environmental impact.
In the past, infrastructure development occurred with minimal consideration for potential geo-hazards such as sinkholes in dolomitic topography. Examples of this include Khutsong Township in Merafong and Katlehong on the East Rand, where both houses and a hospital are at risk of collapsing due to these sinkholes.
To address these challenges, we will be introducing the Geosciences Amendment Bill to Parliament shortly. The main focus of the bill is to effectively manage infrastructure development in dolomitic terrains as well as to empower the Council for Geoscience to be an advisory authority in respect of geo-hazards and to enable the Council to become the custodian of all geotechnical data and technical information relating to exploration and mining.
In response to the harsh economic downturn that adversely affected the mining industry, my department established the Mining, Growth, Development and Employment Task Team (MIGDETT), a tripartite initiative consisting of various government departments, business and organised labour. The mandate of MIGDETT was to recommend short-term interventions to mitigate the effects of the global economic crisis on the mining industry and to develop interventions that will position South Africa’s mining industry for sustainable growth.
The task team has completed phase-one of its mandate, which has enabled the industry to contain job losses to less than fifty-thousand (50 000), representing half of the initial estimates. At the beginning of this year, the task team began working on the second part of its mandate. This has culminated in a Mining Summit that was organised on 30 to 31 March under the auspices of MIGDETT with the explicit aim of developing a “strategy for the sustainable growth and meaningful transformation of South Africa’s mining houses”.
We have made great strides in identifying issues that need to be addressed to enhance the growth, global competitiveness and transformation of South Africa’s mining houses in a manner that meets the expectations of all the industry’s stakeholders. Equally, it is encouraging that industry stakeholders are prepared to rise to the challenge of the ‘greenification of the mining sector’. The issues of the ‘green economy’ offer a new vision for mining activities of the future as they require us to ensure that mining does not leave behind a mix of negative social, environmental and human legacies and we are determined to ensure that mining does not leave a negative legacy on the landscape of our country.
My department has embarked on an integrated intervention approach in respect of conflicts between mining companies and communities and such interventions are indeed yielding positive results. We have started this process in Motlhotlo, Sekhukhune and Mokopane in Limpopo. We have embarked on the same process in Taung (North West) and will proceed to other affected areas.
My department will work closely with municipalities to improve Integrated Development Plans and this will lead to a significant alignment in companies’ Social And Labour Plans (SLPs). The biggest service delivery hurdle related to this area of our work is the time taken at municipal or community level to finalise agreements on SLPs.
From the regulatory perspective we will rigorously review SLPs before approval and increase the frequency of monitoring.
Improvement of cooperative governance is an issue that my department will henceforth focus on. It is of paramount importance that other departments with whom we consult, e.g. Water Affairs, Rural Development and Traditional Affairs, interact with the department in such a manner that synergy and common goals are achieved. Improved mine water management (through environmental management programmes and plans) is an issue that will receive more attention, specifically with regard to water issues in, e.g. Mpumalanga, Limpopo and the Witwatersrand Gold Basin.
Honourable Members, the mining industry has suffered 45 fatalities in the year to date compared to 57 deaths for the corresponding period last year. Although this represents a 21 percent decline in mining fatalities year on year since the beginning of 2010, I am deeply concerned about the latest spate of fatalities in which six employees died due to falls of ground and a blasting accident within the first week of May. These fatalities occurred at Simmer and Jack in North West, Samancor Eastern Chrome Mines in Limpopo and Harmony’s Joel Mine in the Free State Province. The mining companies that had the most fatalities since the beginning of the year are Anglogold Ashanti, Harmony Gold Mines, Simmer and Jack, Anglo Platinum, and Goldfields.
The major causes of fatalities are falls-of-ground, transportation and machinery accidents. In dealing with these pressing occupational safety challenges, my department will continue with the following interventions:
* The sustained issuing of instructions for stopping either sections of a mine or even the entire mine where necessary, in terms of the provisions of Section 54 of the Mine Health and Safety Act
* Improved enforcement and prosecutions in line with the recent amendments to the Mine Health and Safety Act
* Continuing engagement with the CEOs of mining companies to highlight our concerns regarding the current fatality trends and demand tangible commitments to improve on health and safety.
Work is also being done to integrate seismic networks and systems to improve transparency and access to seismic information. This will ensure that appropriate actions are proactively taken by mines in dealing with high risk areas which are prone to seismic events. A pilot project will be carried out in Gauteng and North West as these are areas prone to seismicity. This project will later be extended to cover other regions.
Occupational health impacts are not immediate and hence difficult to quantify. Silicosis remains a major cause of premature retirement and death at South African mines due to excessive silica dust exposure. On the other hand, Tuberculosis continues to be a serious challenge for the mining industry and this is exacerbated by HIV and AIDS. Lastly, noise induced hearing loss is also a significant health hazard due to exposures to high levels of noise in working places.
In dealing with health related challenges, a new chief directorate for occupational health has been established and additional occupational health inspectors will be appointed in our regional offices. On TB, HIV and AIDS there are ongoing projects to evaluate the policies and programmes of mines and to ensure alignment with the National Strategic Programmes of the Department of Health.
The current legislation on compensation matters in the mining industry needs an urgent overhaul that will address issues relating to access to services and information, turn-around time on payments and compensation amounts. There are collaborative efforts between my Department and the Departments of Labour and Health respectively to review the compensation legislation and to develop an integrated compensation system.
The health and safety problem goes beyond the mine boundaries. We have been receiving a series of complaints from communities located around mines relating to blasting operations which cause damage to houses, nuisance dust and noise. The major problem areas are in Limpopo, Mpumalanga and North West. These issues were also raised sharply during the NCOP’s public hearings in Sekhukhune earlier this year.
We are continuously engaging the affected mines to ensure compliance and, where necessary, issue stoppage notices until such time that appropriate measures are put in place to eliminate the impact of mining activities on neighbouring communities. We are also developing a comprehensive strategy to deal with problems related to blasting, ground vibration, noise and dust control.
In ensuring further improvements on health and safety, the Mine Health and Safety Council has budgeted R30 million to support the achievement of zero harm to mine workers through a comprehensive research programme. The key research themes for the 2010/11 financial year include the prevention of rockfalls and rockbursts; eradication of tuberculosis and noise induced hearing loss in the mining industry.
The impact of illegal mining continues to be a concern in the mining industry. My department has referred this issue to the Inter-Ministerial Security Cluster (IMSC) as this is a criminal matter.
The Mining Qualifications Authority (MQA) has allocated R280 million to support the Mining and Minerals Industry with Skills Development. In support of artisan development, the Mining Qualifications Authority has increased the grants for artisan development with effect from 1 April 2010. My department will also discuss issues relating to training of artisans with the Minister of Higher Education, Honourable Nzimande. We may, for example, consider bringing back retired artisans to train and transfer skills to young, aspiring artisans. I would further encourage mining companies to play a proactive role in the broader skills development in the sector.
The MQA has further forged partnerships with public Further Education and Training (FET) colleges for various learning interventions required in the mining and minerals sector. At least 23 Public FET Colleges were identified in all provinces as a support learning base for the training of artisans. There is a great need to partner with FET colleges in areas where there is significant growth in mining.
In conclusion, Honourable Members, I want to emphasise the important oversight role that the National Council of Provinces can potentially play with regard to the implementation of Social and Labour Plans as it relates to integrated development plans at provincial and local government level. Related to this, I must also caution against the increasing tendency of communities to vent their frustrations with service delivery on mining companies who operate close by. I raise these issues here, Honourable Members, in the hope that you will assist us with your oversight duties to ensure that service delivery takes place as it should. For our part, the Department of Mineral Resources will ensure that the mining industry contributes to the socio-economic development of South Africa and mines in a responsible and sustainable manner.
I thank you all.
Issued by: Department of Mineral Resources
21 May 2010
