[miningmx.com] – SOUTH Africa’s mineral resources department (DMR) delivered mixed news in parliament today saying it had set in motion plans to beef up its administrative capacity, but added that its annual financial statements had been deemed incomplete by its auditor.
Delivery his annual budget statement for the DMR, director-general Thibedi Ramontja said his department had “… initiated a process to align the capacity of the department to match the significant growth of the industry”.
A monitoring and inspection team had been appointed that would “… assist the department in its drive to increase its monitoring of compliance and enforce legal provisions,” Ramontja said.
The DMR’s acknowledgement that it didn’t have the capacity to cope with the regulatory pressure required of it is positive news as mining companies have long complained about waiting times for items such as mining and prospecting licence applications. “Yes, it’s things like that with which the department wants to tackle,” said Ayanda Shezi, a spokesperson for the DMR.
Shezi added, however, that the qualified audit opinion issued by the DMR’s auditor related to incomplete collections on revenue due related to prospecting and mining licences as well as royalties.
Commenting on the 2012/13 financial year, however, Ramontja said the department’s auditors had issued a qualified audit opinion. “[I]t is with regret that in relation to the annual financial statements, the department experienced challenges relating to revenue receivable,” said Ramontja. “This has resulted in a qualified audit opinion on the annual financial statements.”
In terms of expenditure, the department has spent R1.17bn or 99.4% of the allocated budget of R1.18bn for the 2012/2013 financial year.
Despite the infamous logjams at the DMR, Ramontja said there had been important advances in the sector during the past year. About 100 social and labour plans were approved annually while the number of mines in South Africa had increased to 1,579 in 2012 from 1,515 in 2009 and 993 in 2004, growth of 59% in eight years, but only 4% in the last three years.
Mining’s contribution to the South African economic growth increased to 9.3% of gross domestic production in 2012 at some R262.7bn from 9% in 2009 while employment in the sector surprisingly increased to 524,632 from 492,219 in 2009, growth of 6.6%.
The platinum group metal sector remained the largest employer in the mining industry contributing 38% to the total mining industry’s labour force, followed by the gold and coal sectors at 28% and 15% respectively.
Ramontja gave an upbeat forecast for the South African mining sector saying that the country’s platinum sector was well positioned to benefit from an improvement in business conditions.
“Given the inherent cyclical nature of the industry, we anticipate that a better economic environment is imminent,” said Ramontja.
“These signals provide us with a positive outlook for the South African mining industry, especially in respect of the platinum sector which has been experiencing depressed prices,” he added.
