Officials admit to worry over rights transfer backlog
• Mining industry clamours for urgency as about half of all approvals and renewals remain unprocessed
The department of mineral resources & energy’s backlog of 5,326 unprocessed prospecting and mining rights is an indication of the deep problems within the department, officials say. The concession from senior departmental officials during a parliamentary portfolio committee hearing will come as no surprise to those trying to secure access to minerals or deal with the Samrad system to lodge and track their applications.
The department of mineral resources & energy’s backlog of 5,326 unprocessed prospecting and mining rights is an indication of the deep problems within the department, officials say
The highest percentage of backlogs lies with ministerial approvals for the transfer of mineral rights and renewal of rights, with 59% and 47%, respectively, of these applications lodged since 2004 yet to be finalised.
The concession from senior departmental officials during a parliamentary portfolio committee hearing into mineral rights backlog difficulties deepened by Covid-19 will come as no surprise to those trying to secure access to minerals or deal with the Samrad system to lodge and track their applications.
Minerals Council SA CEO Roger Baxter said earlier in February that R20bn worth of mining projects were mired in red tape and slow bureaucratic processes.
Since 2004, when the Mineral and Petroleum Resources Development Act was promulgated, there have been 400 applications for ministerial approval to transfer mineral rights, which is the very essence of mining deals; of those 238 are yet to be concluded. Without timeous approvals, mining deals flounder or are cancelled.
Of 1,535 renewal applications, 724 remain undecided.
Undecided prospecting rights number 2,485 out of the 36,005 submitted in the past 17 years. There is no data on how many of the approved rights are active or how much has been spent on exploration since 2004.
EXPEDITE
Mineral resources & energy minister Gwede Mantashe has made clear that there is an urgent need to kick-start exploration in SA and has instructed his officials to expedite processes to make it happen. There are six avenues the department and council are developing.
Without mineral exploration there will be no new mines to replace ageing ones when they close. There will be no affordable entry points for aspirant mining companies to broaden the racial ownership of the industry by creating new opportunities. There will be no new jobs or benefits for the fiscus.
SA accounts for just 1% of global exploration expenditure, despite its enormous mineral potential. The reasons for the moribund domestic exploration sector include an unfavourable regulatory environment over the past 20 years, a counterproductive tax regime, lack of transparency about ownership of prospecting and mining rights, a bureaucratic morass in processing applications, and a lack of public information on SA’s geological potential.
For years, SA was the top
African destination for exploration spending, attracting about 35% of money spent on the continent, but about 20 years ago it started to plunge down the ranks and now accounts for just 8%, said Paul Miller, CEO of AmaranthCX.
The department outlined a litany of problems it has been trying to resolve since Mantashe took over as minister in 2018 after the tenure of Mosebenzi Zwane from 2015, which saw a marked deterioration in relationships with the industry.
These include stamping out corruption; trying to fix dysfunctional regional offices, such as the one in Mpumalanga, which was closed and its duties assumed by the department; staff operating in a lax consequence-management environment; a lack of digital equipment; and tardy data-capture coupled with a dearth of skilled management, officials said.
The director-general of the department, Thabo Mokoena, said up to 60 vacant senior management positions should be filled from March.
MPs from all parties expressed unhappiness with the poor data, vague answers and lack of action, resulting in committee chair Zet Luzipo ordering the department to return next week with comprehensive answers.
CLUNKY
The main, unanswered question, raised by DA shadow mineral resources & energy minister James Lorimer, was about the dysfunctional Samrad system. Many other African countries have a cadastre system that allows anyone to see who owns what rights and where in their countries and what is available, but the Samrad system is clunky, outdated and has nowhere near the same level of transparency, which lends itself to corruption.
Errol Smart, who heads the Mineral Council’s junior mining section, has said mining companies are willing to crowdfund a new cadastre system because “that’s how important it is for SA’s mining industry”.