Mineral Resources Minister Gwede Mantashe. Picture: SOWETAN
Mineral Resources Minister Gwede Mantashe. Picture: SOWETAN

Mineral Resources Minister Gwede Mantashe has pledged to hold a summit once consultations on the contentious mining charter have been completed this month.

The minister, who earlier said the “use it or lose it principle” needed to be discussed with the industry because of the large number of mines and shafts under care and maintenance, told a media briefing after his budget vote speech in Parliament that the intention of the summit would be to test the contents of the charter with those who had commented on it, including business, labour and communities.

Speaking to media after his budget vote speech, Mantashe would not commit himself as to whether the Department of Mineral Resources would contemplate changes to the charter as a result of the deliberations at the summit, saying that to do so would cast doubt on whether the charter had captured the concerns of stakeholders.

He said the department would compile a document on all the issues raised about the charter.

In his speech, Mantashe said government aimed to finalise and gazette the revised charter in June, after having taken on board inputs and concerns from stakeholders across the country.

“Thus far we have held consultations in five provinces where mining and labour-sending areas are situated. We have also established a task team, comprising all social partners, to develop a coherent vision for a competitive and sustainable industry.”

On the “use it or lose it” issue, the minister said in his budget vote speech that the practice of putting mines on care and maintenance had contributed heavily to the massive decline in both production and employment.

“In this regard, we will meet with companies that are culprits of these practices. We intend to discuss honestly and robustly on the use it or lose it principle, found in our law.

“Our mineral wealth must be exploited, not left unused, if we are to generate economic growth and impact on the development of society,” je said.

“The mining sector must increase its contribution to the GDP [gross domestic product] of the country.”

His comments were made in the context of the 8.4% year-on-year plunge in mining production in March.

The minister referred to findings of the international ratings agency the Fraser Institute that rates 91 mining economies and found that SA had the potential to be rated at 21 overall.

Currently, on investor attractiveness, it is rated 47, and was placed 80 in policy and regulatory framework.

“It is evident that the conflict in the industry around the Mining Charter and, therefore, failure to have the sector coalesce, contributed to uncertainty and fear among investors.

“This has further been exacerbated by delays in finalising the Mineral and Petroleum Resources Development Act (MPRDA),” Mantashe said.

The MPRDA Amendment Bill is before the National Council of Provinces. Mantashe urged Parliament to proceed faster towards finalisation of the bill because it is key to entrenching the regulatory and policy certainty necessary for investment.

He said the department was in the process of reviewing the housing and living conditions standards under Section 100 of the MPRDA.

“The review seeks to address the historic and systematic policies of discrimination and marginalisation of mine workers in terms of their working, housing and living conditions, and to provide for the progressive realisation and protection of their basic constitutional right to human dignity through provision of adequate access to housing, better living conditions and related amenities.”

The minister conceded that the issuing of mining rights and the proper processing of applications for mining licences was fraught with great challenges and “laced with corruption”. The challenges were evident in the decline in prospecting rights, unprocessed applications and unexplained red tape.

Backlogs

“The preliminary investigation has found that the backlog in new mineral right applications stretches as far back as 2012 in some regional offices. It has further been found that the applications for renewal of prospecting right applications go as far back as 2010. The implication of unprocessed renewal applications is that it blocks any other party from applying for mineral rights in that area. No satisfactory reasons were advanced as to why we have these backlogs.

“The word in the corridors is that applications from ‘known’ or ‘paying’ applicants are prioritised. Internal systems to detect delays in the processing of mineral rights application is non-existent. Renewal applications are normally dealt with on applicant’s request otherwise it is hardly attended to,” Mantashe said.

“To unleash our economy, we must overcome this hurdle to ensure prospectors can prospect and those with the legal permits and the means to mine can mine. Among various considerations before us is an audit of all applications, permits and mining rights. In addition, [there are] various measures to deal heavily with corruption.”