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DMR: Mosebenzi Zwane: Address by Minister of Mineral Resources, on the occasion of the budget vote, National Assembly, Cape Town (16/05/2017)

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DMR: Mosebenzi Zwane: Address by Minister of Mineral Resources, on the occasion of the budget vote, National Assembly, Cape Town (16/05/2017)

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Mineral Resources Minister Mosebenzi Zwane

18th May 2017

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Honourable Chairperson of the House
Deputy Minister of Mineral Resources, Cde Godfrey Oliphant
Chairperson and Members of the Portfolio Committee on Mineral Resources
The Whip of the ANC Study Group on Mineral Resources, iNkosi Mandela
Honourable Members
Distinguished guests
Members of the media
Ladies and gentlemen

It is indeed an honour for me to table the 2017/18 Budget for Vote 29: Mineral Resources.

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This year we honour one of the greatest stalwarts of our movement, Comrade Oliver Reginald Tambo. It is befitting therefore that we dedicate our collective efforts even more to realising Comrade O.R’s vision of a South Africa “in which black and white shall live and work together as equals in conditions of peace and prosperity."

Comrade O.R’s vision of peace and prosperity can only be defined within the agenda of radical socio-economic transformation.

It is my belief that sustainable and radical socio-economic transformation of the South African economy will be achieved once all South Africans share in the wealth beneath our soil.

This wealth translates to 96% of known global reserves of PGMs, 74% of chrome, 80% manganese, 25% of vanadium and 11% of gold reserves, to cite a few.

We have been allocated a budget of R1.779 billion in the 2017/18 financial year. I wish to assure the House that this allocation will be well-spent, as corroborated by the unqualified audit reports of the Department and all its entities.

A sizeable amount of the total budget, being R 914 million, is transferred to entities reporting to the Department. They are undertaking critical work in areas including Research & Development, skills development, beneficiation and rehabilitation.

I am pleased to inform Honourable Members that the Department and its entities have continued to efficiently and effectively manage the funds allocated in such a manner that accomplishes the objectives of government. The Department continues to pay its suppliers within 10 to 20 days, which is below the Government-wide standard of 30 days, and is critical to the development of small and medium enterprises. The Department will continue to implement government initiatives which support small business development and transformation.

Mining remains at the centre of our country’s economy. Not only does it account for 7,9% of GDP and employ almost 460 000 people, but it is the basis upon which other industries such as finance and manufacturing, have been built. We are of the firm view that mining will continue to play a key role in our economy over the next 100 years and beyond. We therefore need to work together with all stakeholders to ensure that we grow this economy and benefit all South Africans. After several years of stagnant and volatile commodity prices, we are looking forward to new and sustained demand and profitability in the sector. The mining sector has long been a pillar of economic growth and development in South Africa, and is set to cushion the broader economy from a slowdown this year. South Africa’s mining production increased by 15% year-on-year in March, and is set to continue growing as the global mining sector emerges from its winter.

We will continue to use the regulatory tools at our disposal – the Mineral and Petroleum Resources Development Act (MPRDA) and Mining Charter, to drive growth and transformation in the sector.

The review of the Mining Charter, which was gazetted in April 2016 for public comment, is almost complete. Although we had initially intended to have the process finalised in March 2017, further consultations have been undertaken and we are confident that the Charter that will be gazetted will be reflective of the careful consideration given, substantive inputs received and meaningful engagement with stakeholders.

We have aligned our budget, priorities and plans to the priorities of the nation, as expressed through the State of the Nation Address by His Excellency the President of the Republic, Jacob Zuma, as well as our long-term socio-economic vision - the National Development Plan.

We are making decisive interventions to ensure increased black ownership and participation in the sector. In order to substantially boost the community development impact from mining through better implementation of Social and Labour Plans (SLPs), more emphasis is being placed on alignment of SLPs with the Integrated Development Plans of local municipalities.

Furthermore the Department has already had engagements on aligning and consultation of SLP projects which must be implemented. Our aim is to work together with the communities, municipalities and companies to ensure SLPs bring greater benefit to communities.

In the North West for instance, we became aware that the contribution of small diamond and slate producers towards their SLPs had a sub-optimal impact towards communities where these companies operate. To this end, we have engaged these companies and municipalities to identify meaningful projects which can be implemented, and these companies have made financial commitments in the Maquassi Hills, Mmamusa and Lekwa Teemane municipalities, in line with the Premier of the North West Province’s Villages, Townships and Small Dorpies (VTSD) Economies and Entrepreneurship Outreach Programme.

We also encourage closer collaboration between mining companies operating in the same area in the development and implementation of SLPs, to ensure higher-impact projects.

Mining is not just the prerogative of the few. This year we are taking more of our services to the people – we will be going to all nine of our provinces, and engaging with South Africans, particularly women and youth, on their involvement in the mining sector, not only as owners and managers in mining operations, but as suppliers, service providers and beneficiators. We have some of these new entrants, young and black, with us here today, we commend you. You are job creators, and growth drivers and we will continue to support you as government.

In the North West province, where we are part of efforts to bring more upcoming entrepreneurs into the mainstream economy, we are facilitating the unlocking of opportunities between companies that are not utilising their dumps and SMMEs. These SMMEs will enter into commercial agreements with the mining companies and re-work the dumps to realise economic benefits.

We continue to experience stability in the sector, with the peaceful conclusion of the October 2016 platinum wage agreements with the three major producers as an example. This represents a significant step in the continuation and strengthening of relationships built between the labour unions and mining companies since the signing of the Presidential Framework Agreement for a Sustainable Mining Industry in 2013. We encourage stakeholders to continue in this manner as they hold wage negotiations in the year ahead, and also work with communities, as stability is critical for the long-term sustainability of the mining sector.

Attracting investment and growing the sector remains one of our key focus areas. Since the announcement made at the Mining Indaba in February, of an integrated, multi-disciplinary geological mapping programme worth R20 billion over 10 years, the Council for Geoscience (CGS) has developed a plan of action to grow South Africa’s share of global exploration investment.

As part of assessing the potential of the shale gas resource, CGS and Petroleum Agency South Africa (PASA) are conducting a scientific programme that will include the plan for its sustainable development. This will attract new investment in shale gas and the broader upstream petroleum sector. Three vertical shallow boreholes up to one kilometre will be drilled in Beaufort West to assess the ground water levels and movement. The Petroleum Agency is also focusing on shale gas resource evaluation and new research initiatives, which include investigating near-surface hydrocarbon occurrence. As a responsible Government, we continue to engage with communities and stakeholders and will take them along as the process unfolds.

Health and safety continues to be important for the long-term sustainability of the sector. It is therefore in the interests of employers, organised labour and Government alike, to ensure this matter continues to receive the attention it deserves. We wish to congratulate those mining houses that have gone for more than one year without a fatality. We wish to encourage them to continue to mine responsible, and encourage others to achieve the same milestone.

This year marks 20 years since the establishment of the Mine Health and Safety Council, the tripartite structure which has worked tirelessly to reduce the numbers of fatalities, injuries and occupational diseases. We will continue to work with CEOs of mining companies and organised labour to improve performance of the sector in this regard.

The Council for Geoscience is collaborating with the Mine Health and Safety Council in a project which seeks to bridge the gap in the monitoring of mine seismicity within South Africa between the underground mining networks and the South African National Seismograph Network.

This project enables us to not only monitor seismic activities that involve rock falls in mines, but improve our predictive capacity in order to save the lives of mine workers. The growth of deep mining in the platinum sector calls for the extension of the programme from the gold sector to the platinum belt.

We are working to deal decisively with the issue of illegal mining, and are prioritising the rehabilitation of derelict and ownerless mines in this regard. The Deputy Minister will elaborate further.

In line with South Africa’s foreign policy, the African continent remains a key area of focus. We collaborate with other States within the framework of the African Mining Vision and the SADC Protocol on Mining, among others. We are intensifying our work with Zimbabwe, Zambia, Angola, the Central African Republic, Nigeria and other African countries in terms of technical cooperation in mining. We also wish to learn from their experiences in the area of upstream oil and gas development as we seek to conquer new frontiers of petroleum development. Work is already underway in Nigeria and CAR.

Mintek has also spread its skills development initiatives beyond our borders. It has continued in assisting several countries on programmes to develop technical competency and laboratory facilities. Most of these engagements occur within government-to-government bilateral agreements. Recently the Department of Mines in Malawi sent delegates to Mintek for a period of one month to be trained on an introductory course in the cutting and polishing of semi-precious gemstones and jewellery manufacturing. By the end of the training the learners were able to manufacture marketable products. A similar programme was done for the Women in Mining Sector of Mali. Mintek has also had active engagements with the Central African Republic, Mauritius, Nigeria, Sudan, Tanzania and Zambia.

In the past year, we have also strengthened our collaboration with BRICS countries and other economies.

Our aim is to create mutually beneficial relationships, with a focus on mineral value chain integration, investment promotion, geoscience, skills development and innovation.

The Kimberley Process Certification Scheme (KPCS) which was established in 2003 to stem the flow of conflict diamonds, now has members accounting for approximately 99.8% of the global production of rough diamonds. South Africa continues to be an active member committed to ensuring that diamonds as a resource are used to empower and benefit the people rather than fund exploitation and wars. We are proud to announce to you that South Africa has been appointed as Chair of the KPCS’ most strategic working group, that of Monitoring, over the next three years. This will be the first time in the history of the Kimberley Process, born and conceived in Africa, that an African country will be holding such a strategic position. We wish Dr Sipho Manase all the best as he represents the country and the African continent more broadly in this role. We will further strengthen regional collaboration in the space of diamond mining through the Association of African Diamond Producing Countries.

As outlined by the President of the Republic, His Excellency Jacob Zuma, beneficiation of our minerals remains one of our top priorities as Government, in line with the Nine Point Plan to grow the economy.

Mintek will continue to provide technical and marketing support to the two Beneficiation Centres recently set-up in Upington and Prieska in the Northern Cape.  In total, Mintek supports a total of 46 project sites in pottery, glass beads, jewellery, gemstones, cultured granite, sand & stone in provinces including the North West, Limpopo, Eastern Cape, Free State and KZN. These supported projects have created 460 employment opportunities which are mostly in the remote parts of our country.

The Mintek Technology Demonstration site at Randfontein provides a platform for the intelligent integration of various Mintek technologies to remediate highly polluted sites such as Robinson Lake. The various Mintek technologies target the treatment of acid mine drainage and the removal of toxic and radioactive elements such as uranium and heavy metals from the Robinson Lake sediments.  This technology integration platform will provide applicable technologies for the remediation and potential restoration of any highly polluted sources such as dumps, lakes and rivers.

For sustainable and radical socio-economic transformation of the mining industry to be achieved, we have to continuously invest in the relevant skills.

Mintek is involved in a number of skills development initiatives in partnership with other institutions in order to increase the skills base of ordinary South Africans who have been negatively affected by mining. Through a Memorandum of Agreement with the MQA, Mintek is training 300 learners in Mpumalanga in Surface Mining over a period of six months. The training consists of both theoretical and practical components, and includes learners from Chief Albert Luthuli, Thaba Chweu, Umjindi, Emakhazeni, Thembisile Hani and Mkhondo municipalities. This programme will greatly assist in uplifting these communities.

One of the success stories of our entities’ bursary programmes is Ms Tshiamo Legoale, a geologist employed in Mintek’s Small Scale Mining and Beneficiation Division. She is my guest here today, as she won the right to represent South Africa in FameLab, an international competition for young scientists. Ms Legoale, please rise, you have done us proud.

Conclusion

It is not only the task of Government to transform the economy, but the work of all of us, black and white. Let us therefore join hands and move the mining industry forward. As we leave this place, we are confident that we have your support as we together go and change the lives of all our people for the better.

I hereby table this Budget before the House.

I thank you.

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