In charge: New Mineral Resources Minister Gwede Mantashe will have to decide what to do with troubled Gupta-owned mines. Picture: ZINGISA MVUMVU
In charge: New Mineral Resources Minister Gwede Mantashe will have to decide what to do with troubled Gupta-owned mines. Picture: ZINGISA MVUMVU

Mineral Resources Minister Gwede Mantashe conceded on Tuesday the application process for mining rights and licences was "fraught with corruption".

These and other challenges were inhibiting the development of the sector. The problems contributed to a decline in prospecting rights, unprocessed applications and unexplained red tape, Mantashe said in his budget vote speech in Parliament. He undertook to tackle the problems "aggressively" and to restore the reputation of the mineral resources department.

"The preliminary investigation has found that the backlog on 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 to 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 right application is non-existent.

"Renewal applications are normally dealt with on the applicant’s request, otherwise it is hardly attended to. "To unleash our economy, we must overcome this hurdle to ensure that 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, various measures to deal heavily with corruption," he said.

The fact that there was a large a number of mines and shafts that were not operational and were being kept on a care and maintenance basis had contributed to the massive decline in mining production.

These mines were sidelined in favour of high-grade mines.

He would be discussing the "use it or lose it principle" with companies to encourage them either to use their assets or allow others to do so.

Mantashe said he was reluctant to enforce this law, which has not been used before. His comments were made in the context of the 8.4% plunge in year-on-year mining production in March.

On the Mining Charter, he said the government aimed to finalise and gazette the revised charter in June.

ensorl@businesslive.co.za