Shameful state of mining rights
Any mining executive, lawyer or investor in SA’s resources industry listening to last week’s presentation by the department of mineral resources & energy about its handling of rights would be only too aware of its shortcomings.
The problems of timeously granting prospecting and mining rights have been spoken of for years, with high levels of frustration among executives and lawyers working in the sector.
There was a true jaw-dropper in the department’s statistics of applications made since 2004, when the Mineral and Petroleum Resources Development Act was promulgated. Nearly 60% of 400 applications to have mineral rights transferred in the past 17 years have yet to be granted. These transfers are the very essence of deal flow in the resources sector. That the department is sitting on 238 that need ministerial approval is incomprehensible.
All the talk from minister Gwede Mantashe about revitalising the industry and its glorious future must be weighed against this one statistic. Nearly two-thirds of mineral right transfer applications are sitting on his desk.
Those attending the department’s presentation on its lacklustre performance were not given any insight into this particularly worrying backlog by officials, who had a host of excuses for the department’s problems.
From the outset, let it be said there are many hardworking, dedicated officials in the department and regional offices who are trying to do what they can to make the processes work, but they are facing incredible obstacles.
The overarching excuse provided to MPs was that there were appeals and objections holding up the process, and this difficulty was exacerbated by Covid-19 lockdowns. Fair enough. But no weight was given to this excuse by officials citing how many of the 2,485 prospecting, 235 mining and 1,644 permit applications were held up because of these constraints.
Then it came down to management. An item called “tools of trade” was blamed for bringing regional offices handling these applications to a “complete halt”. Presumably these would be items such as computers, printers, internet access and paper.
The excuse of the day was that the department had little to no consequence management, meaning staff could do whatever they liked and there was no sanction. Departmental officials were also tardy in loading data into the Samrad digital mineral rights system, effectively gumming up the works.
Imagine a listed mining company behaving like this. Shareholders would revolt, throw out those responsible for the disarray and bring in fresh leadership. The department’s shareholders are the mining companies paying billions of rand in taxes and the general public who pay salaries for staff in the department.
For all those in the mining industry who have dealt with Samrad, a system so bad it has been a joke for years, there is further bad news. It “should be developed further” rather than be thrown away, the officials told MPs. Other African countries used a digital mineral rights management system, or cadastre, that allows unfettered access for anyone from anywhere in the world to look at all mineral tenements and see immediately the status of these properties and who has rights and then make applications.
Samrad has none of this transparency or user friendliness, and the feeling is that it enables corruption. The industry has offered to pay whatever it takes to get a new cadastre system and hire hundreds of people to populate it with data. Has the department jumped at the offer? No chance. The commonly held view is that industry involvement in this process and the shining of a light into the dark recesses of the department’s mineral rights management will expose incompetence and malfeasance.
It simply cannot be this difficult to manage the country’s mineral resources. That the department lurches from excuse to excuse and crisis to crisis is pitiful. It squanders SA’s inherent wealth and those involved should hang their heads in shame.
IMAGINE A LISTED MINING COMPANY BEHAVING LIKE THIS. SHAREHOLDERS WOULD REVOLT